Private Equity and Venture Capital
A.Y. 2019/2020
Learning objectives
The course aims at providing students with theoretical knowledge and analytical tools to evaluate financing opportunities for prospective entrepreneurs and more mature companies. Specifically, students will be provided with knowledge of the most current theories of corporate finance. The course will focus on how the financial needs and financial opportunities of companies evolve with their life-cycle, with a particular attention to the case of start ups. Moreover, the functioning of the most established financial alternatives, such as bank finance, venture capital, private equity, secondary markets will be covered, together with the most recent trends in the provision of entrepreneurial finance, due to the fintech revolution, the rationale of government intervention in entrepreneurial finance, and the opportunities emerging from such intervention.
Expected learning outcomes
By the end of the course the students will gain knowledge of:
The most current theories of corporate finance,
How the financial needs and financial opportunities of companies evolve with their life-cycle, with a particular attention to the case of start ups,
The functioning of the most established financial alternatives, such as bank finance, venture capital, private equity, secondary markets
The recent trends in the provision of entrepreneurial finance, due to the fintech revolution
The rationale of government intervention in entrepreneurial finance, and the opportunities emerging from such intervention.
In terms of practical tools and skills, the students will be able to:
Develop a valuation report for a start up
Read a venture capital or private equity term sheet and contract
Consider the advantages and disadvantages of different financing opportunities
The most current theories of corporate finance,
How the financial needs and financial opportunities of companies evolve with their life-cycle, with a particular attention to the case of start ups,
The functioning of the most established financial alternatives, such as bank finance, venture capital, private equity, secondary markets
The recent trends in the provision of entrepreneurial finance, due to the fintech revolution
The rationale of government intervention in entrepreneurial finance, and the opportunities emerging from such intervention.
In terms of practical tools and skills, the students will be able to:
Develop a valuation report for a start up
Read a venture capital or private equity term sheet and contract
Consider the advantages and disadvantages of different financing opportunities
Lesson period: Third trimester
Assessment methods: Esame
Assessment result: voto verbalizzato in trentesimi
Single course
This course cannot be attended as a single course. Please check our list of single courses to find the ones available for enrolment.
Course syllabus and organization
Single session
Responsible
Lesson period
Third trimester
Course syllabus
1. Introduction: course description (objectives, class organization) and introductory concepts
2. Theory of corporate finance and entrepreneurial finance: trade off theory, agency theory, pecking order theory, information asymmetries and financial constraints
3. Bootstrapping and debt finance: adverse selection and moral hazard in bank lending, credit rationing
4. An overview of Private Equity and Venture Capital: the role of PE and VC in the entrepreneurial finance ecosystem, history, legal and fiscal frameworks, market trends and figures, in Europe and in the USA
5. Venture Capital financing: the VC cycle, fundraising, investing, contracting, monitoring, exiting
6. Venture Capital valuation techniques
7. Later stage Private Equity: growth equity, buyouts, turnaround and distressed financing
8. Initial Public Offerings: characteristics, trends, unicorns
9. Government intervention: guaranteed loans, government venture capital funds, subsidies, main actors
10. Other equity investors: business angels, corporate venture capital investors, bank-affiliated venture capital investors, university-affiliated venture capital investors
11. Fintech revolution: crowdfunding, peer to peer lending and ICOs
12. Bonds, loans and securitization
2. Theory of corporate finance and entrepreneurial finance: trade off theory, agency theory, pecking order theory, information asymmetries and financial constraints
3. Bootstrapping and debt finance: adverse selection and moral hazard in bank lending, credit rationing
4. An overview of Private Equity and Venture Capital: the role of PE and VC in the entrepreneurial finance ecosystem, history, legal and fiscal frameworks, market trends and figures, in Europe and in the USA
5. Venture Capital financing: the VC cycle, fundraising, investing, contracting, monitoring, exiting
6. Venture Capital valuation techniques
7. Later stage Private Equity: growth equity, buyouts, turnaround and distressed financing
8. Initial Public Offerings: characteristics, trends, unicorns
9. Government intervention: guaranteed loans, government venture capital funds, subsidies, main actors
10. Other equity investors: business angels, corporate venture capital investors, bank-affiliated venture capital investors, university-affiliated venture capital investors
11. Fintech revolution: crowdfunding, peer to peer lending and ICOs
12. Bonds, loans and securitization
Prerequisites for admission
Corporate Finance course is highly recommended
Teaching methods
Lectures, valuation exercises, case-studies presentations, testimonials from practitioners
Teaching Resources
Metrick A., Yasuda A. Venture Capital and the Finance of Innovation, Wiley (2010)
Prahl M., White B., Zeisberger C. Transformation via Private Equity, Venture Capital, Minority investments and Buyout, Wiley (2017)
The course slides and supplementary readings will be uploaded in the Ariel platform.
Prahl M., White B., Zeisberger C. Transformation via Private Equity, Venture Capital, Minority investments and Buyout, Wiley (2017)
The course slides and supplementary readings will be uploaded in the Ariel platform.
Assessment methods and Criteria
Attending students are required to participate in at least 80% of classes.
Their final grade is based on two components:
- Final written exam (70%)
- Groupwork (30%)
Regarding the groupwork, students will need to conduct research on an assigned topic or case study and present it in front of the class. Evaluation is based on the following criteria: clarity of the presentation, exhaustiveness, critical thinking, added materials.
Non-attending students are those unable to participate in at least 80% of classes. The inability to attend class needs to be justified via email (e.g., Erasmus students, working students ). Class attendance is strongly encouraged for this course.
The final grade of non-attending students is based solely on the final written exam.
Their final grade is based on two components:
- Final written exam (70%)
- Groupwork (30%)
Regarding the groupwork, students will need to conduct research on an assigned topic or case study and present it in front of the class. Evaluation is based on the following criteria: clarity of the presentation, exhaustiveness, critical thinking, added materials.
Non-attending students are those unable to participate in at least 80% of classes. The inability to attend class needs to be justified via email (e.g., Erasmus students, working students ). Class attendance is strongly encouraged for this course.
The final grade of non-attending students is based solely on the final written exam.
SECS-P/11 - FINANCIAL MARKETS AND INSTITUTIONS - University credits: 9
Lessons: 60 hours
Professor:
Quas Anita
Shifts:
-
Professor:
Quas AnitaProfessor(s)