DOCSLIB.ORG

Financial Evaluation of Entrepreneurial Strategic Choice Yasuharu Imai

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Financial Evaluation of Entrepreneurial Strategic Choice Yasuharu Imai Financial evaluation of entrepreneurial strategic choice Yasuharu Imai To cite this version: Yasuharu Imai. Financial evaluation of entrepreneurial strategic choice. Business administration. Normandie Université, 2019. English. NNT : 2019NORMC022. tel-02400106 HAL Id: tel-02400106 https://tel.archives-ouvertes.fr/tel-02400106 Submitted on 9 Dec 2019 HAL is a multi-disciplinary open access L’archive ouverte pluridisciplinaire HAL, est archive for the deposit and dissemination of sci- destinée au dépôt et à la diffusion de documents entific research documents, whether they are pub- scientifiques de niveau recherche, publiés ou non, lished or not. The documents may come from émanant des établissements d’enseignement et de teaching and research institutions in France or recherche français ou étrangers, des laboratoires abroad, or from public or private research centers. publics ou privés. THÈSE Pour obtenir le diplôme de doctorat Spécialité SCIENCES DE GESTION Préparée au sein de l'Université de Caen Normandie Financial evaluatiοn οf entrepreneurial strategic chοice Présentée et soutenue par Yasuharu IMAI Thèse soutenue publiquement le 15/10/2019 devant le jury composé de M. CATHERINE CRAPSKY Professeur, Université d'Angers Rapporteur du jury M. JEAN LAURENT VIVIANI Professeur, Université Rennes 1 Rapporteur du jury M. RIVO RANDRIANARIVONY Professeur, Université Rouen Normandie Président du jury Mme FANNY SIMON-LEE Professeur, Université Rouen Normandie Directeur de thèse Mme ANNE-LAURE LE NADANT Professeur, Université Rennes 2 Co-directeur de thèse Thèse dirigée par FANNY SIMON-LEE et ANNE-LAURE LE NADANT, Normandie Innovation, Marché, Entreprise, Consommation Doctoral Dissertation The financial evaluation of entrepreneurial strategic choices Yasuharu IMAI NIMEC, IAE Caen (Université de Caen Normandie) 15th October, 2019 Membres du jury: Madame Catherine CRAPSKY, professeur, Université d'Angers, rapporteur Monsieur Jean-Laurent VIVIANI, professeur, Université de Rennes 1, rapporteur Monsieur Rivo RANDRIANARIVONY, professeur, Université de Rouen Normandie, suffragant Madame Fanny SIMON-LEE, professeur, Université de Rouen Normandie, directrice de thèse Madame Anne-Laure LE NADANT, professeur, Université de Rennes 2, co-directrice de thèse 1 Index Acknowledgements p.8 Part One: Introduction and perspectives of this dissertation . Outline p.9 1. Motivation and objective p.9 2. Structure of this dissertation p.13 . The perspectives of this dissertation p.14 1. What is entrepreneurial finance? p.14 1. Entrepreneurship and entrepreneurial finance p.15 2. Entrepreneurial finance as a subset of corporate finance p.16 3. What is entrepreneurial finance? p.17 4. What are the main contributions of research in entrepreneurial finance? p.17 2. Characteristics of entrepreneurial finance: Stages p.22 1. What is the venture life cycle? p.22 2. Stages derived from the venture life cycle p.25 3. How should entrepreneurial firms be characterised? p.27 3. Characteristics of entrepreneurial finance: Risk p.28 1. “Unsuccessful” trajectories in the venture life cycle p.28 2. The concept of risk versus uncertainty p.30 3. Risk in the context of entrepreneurial finance p.33 4. Characteristics of entrepreneurial finance: Information asymmetry p.34 1. Origin of the information asymmetry problem in market finance p.35 2. The problem of information asymmetry in entrepreneurial finance p.35 5. Contract negotiation: A Central issue in this dissertation p.37 1. Closing up the negotiation aspect p.38 2. Contract negotiation in entrepreneurial finance p.39 2 3. Principal-agent problem in contract negotiation p.40 . Main research question of this dissertation p.43 1. Interlinkage between the four key fundamental concepts p.43 2. Setting the grand research question (central problem) of this dissertation p.46 . The main method of this dissertation: Real Options Analysis p.49 1. What is the Real Options Analysis (ROA)? p.49 2. The styles and extension of the real options p.53 3. Why is the ROA useful for entrepreneurial finance? p.56 4. Expansion of the ROA: Incorporation of game theory p.58 1. What is game theory? p.59 2. Application of game theory into contractual negotiation p.61 3. Incorporation of game theory into the ROA p.62 . References p.65 Part Two: Applications . Real Option Valuation in Licensing Contract with Bio-Pharma venture 1. Introduction p.70 2. Literature overview and Model Construction p.72 1. The basic model of Lo Nigro et al. p.72 2. Extension of the basic model p.76 1. Background situation p.76 2. Theoretical assumption: Financial structure of licensing p.78 3. Theoretical assumption: Compensation depending on risk p.79 4. Dynamic assumption with risk perception p.80 3. Numerical simulations p.82 1. Outline of simulations p.82 2. Parameters setting p.83 3. Results p.86 4. Conclusion p.92 3 5. References p.94 . Equity investment decision-making cost under the existence of convertible note holder in the second financing round 1. Introduction p.98 2. Usage of convertible note as a financing method p.101 1. What is convertible note? p.101 2. Why is convertible note used for start-up financing? p.102 3. Basic scheme of procurement with equity and convertible note p.103 4. Dilution problem for equity investors in the presence of convertible note p.106 5. Conversion into equity: real option structure p.109 3. New equity investors’ concern: Adverse selection p.111 1. New equity investors’ concern p.111 2. Adverse selection problem in equity financing contract p.114 4. Modelling the cost for equity investment decision making p.116 1. Modelling of adverse selection effect: Two-type model p.116 2. Incorporation of real option structure into modelling of the index of p.121 entrepreneur type 5. Numerical simulations p.124 1. Simulation result of the effect of discount rate for convertible note p.125 holder 2. Simulation result of the cost of equity investment decision-making p.127 6. Conclusion p.130 7. References p.131 . The IPO valuation premium "Puzzle" for an entrepreneur’s exit choice 1. Introduction p.134 2. Review of the exit strategy choice model by Bayar and Chemmanur p.137 4 3. Explaining the “private benefits of control”: A game-theoretic real options p.140 approach 1. How should the “private benefits of control” be interpreted? p.140 2. Real options analysis (ROA) p.143 3. Incorporating game theory: A game-theoretic real options approach p.144 4. Two-period binomial tree model: Preparation of a game-theoretic real p.144 options model 5. The “private benefits of control” as two Nash Equilibria: A game- p.146 theoretic real options model 6. The condition that forms the “private benefits of control” p.150 7. Choice of exit option: IPO or acquisition p.151 4. Explaining the “IPO valuation premium puzzle” p.153 1. The minimum value of the private benefits of control p.153 2. Is the “IPO valuation premium puzzle” really a “puzzle”? p.154 5. Numerical simulations p.156 I A 1. Simulation of the equation (3) with changing α Ent - α Ent p.156 2. Simulation of the equation (3) with changing I1/I0 p.158 6. Conclusion p.160 7. References p.162 Part Three: Concluding remarks 1. Concluding summary of Part One p.165 2. Three articles in Part Two p.169 3. Contributions and discussions p.173 1. Academic contributions p.174 2. Managerial contributions p.176 4. Target users of the models in this dissertation p.178 5. Other several avenues for future research p.181 6. References p.183 5 Part Four: Le résumé en français Première partie : Introduction et contexte de la recherche . Le contexte de la thèse p.186 1. Objectif et motivations p.186 2. La structuration de la thèse p.187 . Les concepts fondamentaux de la thèse p.188 1. Qu’est-ce que la finance entrepreneuriale ? p.188 2. Les caractéristiques de la finance entrepreneuriale : les étapes p.189 3. Les caractéristiques de la finance entrepreneuriale : le risque p.190 4. Une facette de la finance entrepreneuriale : l'asymétrie d'information p.190 5. La négociation du contrat p.190 . La problématique de la recherche p.191 . L’approche par les options réelles (AOR) p.193 1. Définition p.193 2. L’extension de l’AOR : l’incorporation de la théorie des jeux p.194 Deuxième partie : L’applications L’application . L’évaluation d'une option réelle dans un contrat de licence avec une entreprise biopharmaceutique 1. La modélisation du contrat de licence p.195 2. Les simulations numériques p.197 L’application . Le coût de la décision d'investissement en fonds propres en présence d’un détenteur d’obligations convertibles lors du deuxième tour de financement 1. Le financement par obligations convertibles p.198 6 2. La préoccupation pour les nouveaux investisseurs en capitaux propres : la p.200 sélection adverse 3. La modélisation du coût de la prise de décision en matière d'investissement en p.200 capitaux propres 1. La modélisation de l'effet de sélection adverse p.200 2. L’intégration de la structure d’option réelle à la modélisation de l'indice p.201 de type d’entrepreneur 4. Les simulations numériques p.202 L’application . Le « puzzle » de la prime d’évaluation de l’introduction en bourse pour le choix de sortie de l’entrepreneur 1. L’analyse et la modélisation du choix de stratégie de sortie p.204 1. Le modèle de choix proposé par Bayar and Chemmanur p.204 2. L’analyse par l’AOR p.204 3. L’approche conjointe de la théorie des jeux et de la théorie des options p.205 réelles 2. L’explication du « puzzle » de la prime d’évaluation de l’introduction en bourse p.206 3. Les simulations numériques p.206 Troisième partie : Conclusion Conclusion p.207 Academic presentations Academic presentations p.209 7 Acknowledgements Firstly, I would like to express my sincere gratitude to my supervisors, Professor Fanny SIMON-LEE and Professor Anne-Laure LE NADANT, for the continuous support of my Ph.D.
Load more

Recommended publications
  • Entrepreneurial Finance Finc-Gb.3361.00
    ENTREPRENEURIAL FINANCE FINC-GB.3361.00 Professor Glenn A. Okun E-mail [email protected] [email protected] Home page: www.stern.nyu.edu/~gokun Phone: 212 998 0780 COURSE DESCRIPTION This course seeks to provide an understanding of the financial and transactional skills that are required to fund new businesses and mature firms. The course will integrate both an academic and practitioner view of the challenges facing entrepreneurs and investors involved in business start-up, venture capital, and private equity investment activities. The course presents frameworks and techniques that are needed to evaluate high-risk opportunities and structure appropriate investment transactions. It should be of interest to those who wish to work as entrepreneurs or as members of a venture capital or private equity investment company. Course Methods Each class will include discussion of readings, case analysis and group activities. Students will analyze cases with an action orientation, for example, what steps should we take to further the development of the venture? What are the venture’s risks and how should they be managed? How should the company be financed? How should the deal be priced and structured? What tactics might be utilized in order to secure a more favorable deal? We will adopt the perspective of different roles in all case discussions (for example, the issuer versus the financier, corporate investors versus fund operators and angels). Classroom Contributions. The learning experience in a course like this one depends heavily on each student being prepared to actively participate in every class session. We all have expectations that will enrich the topic and direction of discussion in the course.
    [Show full text]
  • Entrepreneurial Finance in the Era of Intelligent Tools and Digital Platforms: Implications and Consequences for Work
    BERKELEY ROUNDTABLE ON THE INTERNATIONAL ECONOMY BRIE Working Paper 2018- 8 Entrepreneurial Finance in the Era of Intelligent Tools and Digital Platforms: Implications and Consequences for Work Martin Kenney and John Zysman Entrepreneurial Finance in the Era of Intelligent Tools and Digital Platforms: Implications and Consequences for Work Martin Kenney Co-director, BRIE Distinguished Professor Community and Regional Development University of California, Davis John Zysman Co-Director, BRIE Professor Emeritus Department of Political Science University of California, Berkeley In M. Neufeind, J. O'Reilly and F. Ranft (eds.) Work and Welfare in the Digital Age: Facing the 4th Industrial Revolution. Rowman & Littlefield, London/New York. Pp. 47-62. 1 Venture financing, a form of entrepreneurial finance, has played a central part in the story of the digital revolution. Indeed, Silicon Valley, the global center of the venture capital industry, draws its name from the substrate of the contemporary semiconductor, which is the computational engine for all digital products. The continuing performance improvements characteristic of Moore’s Law provided ever new potentialities for new generations of startups. While improvement in processing power was the core engine for this venture capital-financed entrepreneurship, the new firms were not only in semiconductors, but also in layers in stack above the processor itself. There were semiconductor firms of various generations including Intel and AMD, Cirrus Logic, and even later NVidia. There were computer firms ranging from Tandem Computers to SUN Microsystems and Silicon Graphics on to Apple and Osbourne. As there were more computers, users wanted to network them together and with this came 3Com, Cisco, and many other firms; all of which used semiconductor chips.
    [Show full text]
  • Five Essays on Entrepreneurial Finance: Exploring New Ventures’ Financing Sources
    Five Essays on Entrepreneurial Finance: Exploring New Ventures’ Financing Sources Inaugural-Dissertation to obtain the degree of Doctor of Business Administration (doctor rerum politicarum – Dr. rer. pol.) submitted to the Faculty of Business Administration and Economics Heinrich Heine University Düsseldorf presented by Elmar Lins Research Assistant at Riesner Endowed Professorship in Entrepreneurship / Entrepreneurial Finance Heinrich Heine University Düsseldorf Düsseldorf 2016 Dedicated to my family. Acknowledgements First and foremost, I would like to express my deep gratitude to Prof. Dr. Eva Lutz for her guidance throughout the entire process of completing this dissertation. I have marveled at and learnt from the lucidity of her feedback, and her relentless push for improvement and simplicity. I hope she can find traces of her teaching in this manuscript. Furthermore, I would like to thank Prof. Dr. Christoph Börner who kindly agreed to join the dissertation committee. His work on entrepreneurship served to be an immense inspiration for my research. I own earnest thankfulness to Prof. Dr. Hanna Hottenrott, whose foresightedness and generosity have constantly left me speechless. While she provided me the freedom to develop my own ideas, her support and advice over the last few years were invaluable to completing this dissertation. I am indebted to the Center for European Economic Research and KfW Bankengruppe for offering me the opportunity to work with the KfW/ZEW-Startup Panel. In particular, I am tremendously thankful to Dr. Sandra Gottschalk for providing me with a great research infrastructure and her helpful advice on the framing the project. I also would like to thank my colleagues from the Heinrich-Heine-University of Düsseldorf.
    [Show full text]
  • ESADE Entrepreneurship Institute
    ESADE Entrepreneurship Institute Activity Report 2016/17 ESADE Activity Report 2016-2017 3 3 Contents 1. ESADE Entrepreneurship Institute..............................................................-4- 1.1. What happened in the 2016-17 academic year..................................................-4- 1.2. Awards & recognition.............................................................................................-6- 2. Activities in the 2016-17 academic year.................................................-8- 2.1. Teaching....................................................................................................-8- 2.1.1. Undergraduate BBA...........................................................................................-8- 2.1.2. Masters of Science..........................................................................................-10- 2.1.3. MBA.........................................................................................................................-16- 2.1.4. Executive Education........................................................................................-18- 2.1.5. Tutors.......................................................................................................................-23- 2.2. Research....................................................................................................-25- 2.2.1. Highlights..................................................................................................-25- 2.2.2. ESADE Entrepreneurship Research Seminars...........................................-26-
    [Show full text]
  • Decision Making in Entrepreneurial Finance: a Behavioral Perspective
    The Journal of Entrepreneurial Finance Volume 13 Issue 2 Fall 2009 (Issue 1/2) Article 3 December 2009 Decision Making in Entrepreneurial Finance: A Behavioral Perspective Rassoul Yazdipour California State University, Fresno Follow this and additional works at: https://digitalcommons.pepperdine.edu/jef Recommended Citation Yazdipour, Rassoul (2009) "Decision Making in Entrepreneurial Finance: A Behavioral Perspective," The Journal of Entrepreneurial Finance: Vol. 13: Iss. 2, pp. 56-75. Available at: https://digitalcommons.pepperdine.edu/jef/vol13/iss2/3 This Article is brought to you for free and open access by the Graziadio School of Business and Management at Pepperdine Digital Commons. It has been accepted for inclusion in The Journal of Entrepreneurial Finance by an authorized editor of Pepperdine Digital Commons. For more information, please contact [email protected], [email protected], [email protected]. The Journal of Entrepreneurial Finance Volume 13, Issue 2, Fall 2009 56-75 Decision Making in Entrepreneurial Finance: A Behavioral Perspective Decision Making in Entrepreneurial Finance: A Behavioral Perspective 1 Rassoul Yazdipour, Ph.D. California State University, Fresno Abstract Central questions in entrepreneurship and entrepreneurial finance are briefly discussed and case is made for the need for applying the behavioral finance theories and models to better understand the decision making dynamics that is involved at each stage of the entrepreneurial process. By dissecting a venture’s total risk into a “Resident Risk” component and a “Behavioral Risk” component, attempt is made in this writing to introduce a preliminary risk model for evaluating key entrepreneurial decisions like the decision to launch and fund a new venture .
    [Show full text]
  • Entrepreneurial Finance Edited by Luisa Alemany , Job Andreoli Frontmatter More Information
    Cambridge University Press 978-1-108-42135-5 — Entrepreneurial Finance Edited by Luisa Alemany , Job Andreoli Frontmatter More Information ENTREPRENEURIAL FINANCE The Art and Science of Growing Ventures Academics and practitioners from a range of institutions across Europe pro- vide a cutting-edge, practical, and comprehensive review on the financing of entrepreneurial ventures. From sourcing and obtaining funds, to financial tools for growing and managing the financial challenges and opportunities of the startup, Entrepreneurial Finance: The Art and Science of Growing Ventures is an engaging text that equips entrepreneurs, students and early-stage inves- tors to make sound financial decisions at every stage of a business’ life. Largely reflecting European businesses and with a European perspective, the text is grounded in sound theoretical foundations. Case studies and success stories as well as perspectives from the media and from experts provide real- world applications, while a wealth of activities give students abundant oppor- tunities to apply what they have learned. A must-have text for both graduate and undergraduate students in entrepreneurship, finance and management programs, as well as aspiring entrepreneurs in any field. Luisa Alemany is an associate professor in entrepreneurial finance at ESADE Business School and holds an M.B.A. from Stanford University, California, and a PhD from the Universidad Complutense, Madrid. Her research focuses on business angels, venture capital, impact investing, and entrepreneurship education for children. From 2009 to 2017, Dr Alemany was the director of the ESADE Entrepreneurship Institute. She is currently the academic spon- sor of ESADE Business Angels Network (BAN) and is active at the European level, where she has been a director of the board of the European Business Angels Network (EBAN).
    [Show full text]
  • Entrepreneurial Finance
    Review Session: Entrepreneurial Finance Antoinette Schoar MIT Sloan School of Management 15.431 Spring 2011 Four major parts to the course: • New venture valuation • Deal structure • Private equity partnership structure and incentives • Exiting from private equity investments 2 Evaluating a business plan/opportunity: • Very difficult in entrepreneurial situations • Does not mean you shouldn’t do it • Valuation is as good as its assumptions • We looked at three methods: → Discounted cash flow (APV) method → VC method → Real options 3 Discounted cash flow method (APV) • Economics of business →Where does positive NPV come from? →Most important •Cash flows →Free cash flow to all equity investment = EBIT * ( 1 - t ) + DEPR - CAPX - Δ NWC • Discount rate →Economics + Cash Flows + Rate = VALUE 4 APV Approach for New Ventures • The Standard APV Calculations • Step 1: Calculate Free Cash Flows (FCFs) to an “all-equity” firm for a period of years until company has reached a “steady-state.” Step 2: Discount these FCFs at the discount rate of an all-equity firm (k). • Step 3: Calculate a Terminal Value as the present value of a growing perpetuity of FCFs assuming some growth rate in FCFs and discounting by k. • Step 4: Value tax shields of debt financing separately (trD) and discount by a rate that reflects the riskiness of those cash flows. • Step 5: Steps 1- 4 give you the Enterprise Value. To determine the Equity Value subtract the market value of debt. 5 Generate cash flows: • Value after-tax cash flows to all-equity firm / investment: → Start with free cash flows to all-equity firm • For start-ups: → Generate different scenarios →Expect substantial non-linearity →Assign probabilities to the different scenarios → Value company as expected value of different scenarios 6 The Venture Capital Method • Step 1: Forecast sales/revenues to equity for a period of years.
    [Show full text]
  • New Venture Valuation
    New Venture Valuation Entrepreneurial Finance (15.431) - Spring 2002 - Antoinette Schoar What is Different About New Venture Valuation? • Higher risks and higher uncertainty? • Potential rewards higher? Option Values? • Exit and liquidity more important • Not just a go-no/go decision; the actual valuations matter 2 Entrepreneurial Finance (15.431) - Spring 2002 - Antoinette Schoar Valuation Approaches • Discounted Cash Flow/ Adjusted Present Value • The Venture Capital Method oComparables • Real Options These lecture notes draw from three sources: S. Kaplan, “A Note on Valuation in Entrepreneurial Settings,” University of Chicago; J. Lerner, “A Note on Valuation in Private Equity Settings,” Harvard Business School Note 9-297-050; and W. Sahlman, “A Method for Valuing High-Risk, Long-Term Investments,” Harvard Business School Note 9-288-006. 3 Entrepreneurial Finance (15.431) - Spring 2002 - Antoinette Schoar Discounted Cash Flow/Adjusted Present Value (APV) • Use APV not WACC o Capital structure involves hybrid securities not easily classified as debt or equity o Capital structure changes over time o Interest tax shields change over time as company’s tax status changes • APV is a more flexible method that can accommodate these features of new venture valuation. 4 Entrepreneurial Finance (15.431) - Spring 2002 - Antoinette Schoar APV Approach for New Ventures • The Standard APV Calculations • Step 1: Calculate Free Cash Flows (FCFs) to an “all-equity” firm for a period of years until company reached a “steady-state.” • Step 2: Discount these FCFs at the discount rate of an all- equity firm (k). • Step 3: Calculate a Terminal Value as the present value of a growing perpetuity of FCFs assuming some growth rate in FCFs and discounting by k.
    [Show full text]
  • Trademarks in Entrepreneurial Finance
    Trademarks in Entrepreneurial Finance Thomas J. Chemmanur ∗ Harshit Rajaiya y Xuan Tian z Qianqian Yu x This Draft: December 30, 2018 Abstract We analyze the role of trademarks in entrepreneurial finance, hypothesizing that trademarks play two important roles: a protective role, leading to better product market performance; and an informational role, signaling higher firm quality to investors. We develop testable hy- potheses relating the trademarks held by private firms to characteristics of venture capital (VC) investment in them, their probability of successful exit, IPO and secondary market valuations, institutional investor IPO participation, post-IPO operating performance, and post-IPO infor- mation asymmetry. We test these hypotheses using a large and unique dataset of trademarks held by VC-backed private firms and present causal evidence supporting them. Keywords: Trademarks; Initial Public Offerings (IPOs); Private Firm Exit; Innovation ∗Professor of Finance and Hillenbrand Distinguished Fellow, Finance Department, Fulton Hall 336, Carroll School of Management, Boston College, Chestnut Hill, MA 02467, Tel: (617) 552-3980, Fax: (617) 552-0431, Email: [email protected]. yPhD Candidate, Finance Department, Fulton Hall 337, Carroll School of Management, Boston College, Chestnut Hill, MA 02467, Tel: (857) 316-7064, Email: [email protected]. zJD Capital Chair Professor of Finance, PBC School of Finance, Tsinghua University, 43 Chengfu Road, Beijing, 100083, China, Tel: (+86) 10-62794103, Email: [email protected]. xAssistant Professor of Finance, Perella Department of Finance, Lehigh University, Bethlehem, PA 18015, Tel: (610) 758-2919, Email: [email protected]. For helpful comments and suggestions, we thank Karthik Krishnan, Jie He, Onur Bayar, Karen Simonyan, David Mauer, Yongqiang Chu, Ahmet C.
    [Show full text]
  • Entrepreneurial Finance
    Entrepreneurial Finance Entrepreneurial Finance Learn how to invest in new ventures and raise funds for startups Rated with 4.4/5 +31 (0)20 520 0160 | AIF.nl | [email protected] Investment in startups plays a key role in the current The Entrepreneurial Finance program is targeted at economy. New companies create most of the new individuals, with some financial knowledge, interested employment, generate innovations and disrupt in learning about the whole cycle of investing in existing markets. From the investors’ point of view, startups. Potential participants are entrepreneurs, with there is an opportunity to get high returns by investing good financial acumen, business angels, family offices, early in some of the most successful companies of the consultants, regional development organizations decade. Angel investment in new startups has been and advisors. Other professionals who interact with growing significantly, even during the crisis, with over startups in the process of raising funds, or who €6 billion invested across Europe in 2015, and with advise venture capital funds and need to understand a growth rate of 8.3% annually since 2012 (EBAN). how they work, will also benefit from attending this Venture capital investments accounted for €5.8 billion program. in 2015. This is a very active market and understanding its dynamics, and how to get involved - from an investor or an entrepreneur perspective - is key for being successful. How you will benefit Faculty Analyze and understand the process of startup Luisa Alemany is Associate Professor of Finance at financing ESADE Business School and director of the ESADE Entrepreneurship Institute. She holds an MBA from Learn how to get deal flow and analyze a business Stanford University and a PhD in Finance from U.
    [Show full text]
  • The Evolution of Entrepreneurial Finance: a New Typology
    University of Colorado Law School Colorado Law Scholarly Commons Articles Colorado Law Faculty Scholarship 2018 The Evolution of Entrepreneurial Finance: A New Typology J. Brad Bernthal University of Colorado Law School Follow this and additional works at: https://scholar.law.colorado.edu/articles Part of the Agency Commons, Banking and Finance Law Commons, Business Organizations Law Commons, Contracts Commons, Internet Law Commons, Law and Economics Commons, and the Securities Law Commons Citation Information J. Brad Bernthal, The Evolution of Entrepreneurial Finance: A New Typology, 2018 BYU L. Rev. 773, available at https://scholar.law.colorado.edu/articles/1215/. Copyright Statement Copyright protected. Use of materials from this collection beyond the exceptions provided for in the Fair Use and Educational Use clauses of the U.S. Copyright Law may violate federal law. Permission to publish or reproduce is required. This Article is brought to you for free and open access by the Colorado Law Faculty Scholarship at Colorado Law Scholarly Commons. It has been accepted for inclusion in Articles by an authorized administrator of Colorado Law Scholarly Commons. For more information, please contact [email protected]. 001.BERNTHAL_FIN2_NOHEADERS.DOCX (DO NOT DELETE) 2/17/19 8:20 PM The Evolution of Entrepreneurial Finance: A New Typology J. Brad Bernthal* There has been an explosion in new types of startup finance instruments. Whereas twenty years ago preferred stock dominated the field, startup companies and investors now use at least eight different instruments—six of which have only become widely used in the last decade. Legal scholars have yet to reflect upon the proliferation of instrument types in the aggregate.
    [Show full text]
  • Entrepreneurial Finance Strategy, Valuation, and Deal Structure
    Entrepreneurial Finance Strategy, Valuation, and Deal Structure CONTENTS List of Illustrations xvii Abbreviations xxiii Preface xxvii Why Study Entrepreneurial Finance? xxviii What Makes Entrepreneurial Finance Different from Corporate Finance? xxix Interdependence between Investment and Financing Decisions Diversifiable Risk and Investment Value Managerial Involvement of Investors Information Problems and Contract Design Incentive Alignment and Contract Design The Importance of Real Options Harvesting the Investment Value to the Entrepreneur What’s New about This Book? xxxiv Intended Audience xxxv A Note about the Website and Internet Resources xxxvi Simulation Spreadsheets and Templates Acknowledgments xxxix About the Authors xli PART 1 Getting Started Chapter 1 Introduction 3 1.1 Entrepreneurship and the Entrepreneur 3 Survival and Failure Rates of New Businesses Economic Downturns and Entrepreneurship Globalization of Entrepreneurship Types of Entrepreneurship Corporate Venturing Social Venturing 1.2 The Finance Paradigm 12 The Importance of Real Options Objective: Maximum Value for the Entrepreneur 1.3 The Rocket Analogy 14 1.4 The Stages of New Venture Development 15 1.5 Measuring Progress with Milestones 17 1.6 Financial Performance and Stages of New Venture Development 19 1.7 The Sequence of New Venture Financing 21 1.8 The New Venture Business Plan 24 Business Plans of New Ventures Are Different What Makes a Business Plan Convincing? 1.9 Organization of the Book 29 1.10 Summary 31 Review Questions 32 Notes 33 References and Additional
    [Show full text]