Postgraduate Course: Entrepreneurial Finance (CMSE11304)
||College||College of Arts, Humanities and Social Sciences
|Credit level (Normal year taken)||SCQF Level 11 (Postgraduate)
||Availability||Not available to visiting students
|Summary||This is a compulsory course for the MSc in Entrepreneurship and Innovation. It is intended to provide students with a deep understanding of issues associated with the financing of entrepreneurial activities, and the financial assessment of the performance of new ventures. First, we will analyse principles of corporate finance, valuation, and negotiation, with an eye toward developing the tools and concepts of entrepreneurial financial management. Second, we will use examples on firms at different stages of development to illustrate how these tools and concepts may be applied in practice
Aims, Nature, Context
The capital market for financing such entrepreneurs and private equity investing more generally differs fundamentally from capital markets considered in standard corporate finance: First, start-ups are young, mostly unprofitable companies, with short operating histories and little capital. Young firms face exceptionally high degrees of uncertainty, constraining financing and creating difficult decisions about financial contracting, keeping in mind that today's financial decisions may have implications for future opportunities and choices. Second, available capital markets for privately held companies are predominantly deal markets where terms and valuations are negotiated on a case-by-case basis, where investors can add value or are actively involved with the companies they finance.
Throughout the course, we emphasis financial opportunities and decisions of entrepreneurs and private equity investors investing in these entrepreneurs. The programme is broadly structured into five parts. The first modules covered the basic ideas, tools and techniques which, once mastered, will greatly facilitate work throughout the remaining modules and group project. We then go on to consider financial forecasting and assessment of ongoing operation, distinct sources of finance, valuation of entrepreneurial companies and finally possible exit routes.
Entry Requirements (not applicable to Visiting Students)
||Other requirements|| This course is only open to students of the MSc in Entrepreneurship and Innovation and the Optima PhD.
Optima PhD students must attend the Introduction to Finance for Entrepreneurs Course.
Course Delivery Information
|Academic year 2020/21, Not available to visiting students (SS1)
|Learning and Teaching activities (Further Info)
Lecture Hours 20,
Seminar/Tutorial Hours 10,
Summative Assessment Hours 67,
Other Study Hours 50,
Programme Level Learning and Teaching Hours 3,
Directed Learning and Independent Learning Hours
|Additional Information (Learning and Teaching)
Independent preparatory reading for lectures
|Assessment (Further Info)
|Additional Information (Assessment)
-Group Case Study Analysis 50% - assesses Learning Outcomes 1 and 5
-Individual Report 50% - assesses Learning Outcomes 2, 3 and 4
||Group project: assessment will be based on demonstrating the depth, relevance and clarity of the research and how well the findings are analysed in terms of concepts and theories of entrepreneurship. The group project should be presented in consultancy report format, with an executive summary, a clear introduction, a statement of objectives, methods used, analyses, conclusions and recommendations. A first class project would demonstrate clear understanding of the theoretical and practical issues, and an ability to cogently analyse and communicate the results of that analysis, within an overall professional standard of report presentation. References should be in Harvard format.
Individual Report: the grading of the individual essay is based on a well-constructed and organised piece of work that presents relevant evidence from credible sources and draws upon relevant entrepreneurial theory and course content. A first class assignment would identify appropriate and topical material for discussion, refer to a wider range of literature, show evidence of original thinking going beyond mere recitation or paraphrase of the material referenced, and overall demonstrate a clear and strong line of argument throughout.
|No Exam Information
On completion of this course, the student will be able to:
- Analyse critically an organisation's financial status as a value creation process
- Understand the nature and characteristics of financial planning in the context of entrepreneurship
- Understand the key financial statements (Profit & Loss, Balance Sheet and Cash Flow); the financial planning process; the financial risks/rewards of entrepreneurship and innovation.
- Understand typical funding sources; the development of business presentations to attract outside funding; the due diligence process; and the strategies for negotiations for funding
- Prepare a financial forecast
|Vega, Gina, and Miranda S. Lam. Entrepreneurial finance: Concepts and cases. Routledge, 2015. |
Simon Hulme, Chris Drew, Entrepreneurial Finance, MacMillan International - Red Globe Pres, 2020
Klonowski D (2015), Strategic Entrepreneurial Finance: From Value Creation to Realization, Routledge Oxon UK.
Alhabeeb M. J. (2015) Entrepreneurial Finance: Fundamentals of Financial Planning and Management for Small Business Hoboken NJ
|Graduate Attributes and Skills
||Knowledge and Understanding:
- Analyse critically an organisation's financial status as a value creation process;
- Analyse and discuss critically how value creation is not a one-off activity, but rather a continuous cycle of incremental improvements across a wide range of business activities;
- Understand key financial statements (Profit and Loss, Balance Sheet and Cash Flow); the financial planning process; the financial risks/rewards of entrepreneurship and innovation; typical funding sources; the development of business presentations to attract outside funding; the due diligence process; and the strategies for negotiations for funding.
- Critically assess how strategic management, financial management, and entrepreneurship combine to simultaneously examine business topics from different perspectives to better encapsulate actual entrepreneurial practices.
- The accounting side of the course is designed for students with a limited understanding of the subject. Thus, any student who has previously trained in accounting and finance can find some parts of the course basic
Cognitive and Subject Specific Skills:
- Relate entrepreneurial finance to broader concepts of entrepreneurship and innovation covered in other courses;
- Establish how strategic deliberations maximise the entrepreneurial firm's chances of making the right business decisions for the future, enable the firm to manage its available financial and non-financial resources in the most optimal manner, and ensure that the necessary capital is secured to progress the development of the firm to its desired development level;
- Integrate the concepts discussed in the course and relate them to real-world organisational scenarios.
- Successfully undertake independent reading and enquiry;
- Articulate convincing arguments in writing;
- Engage in active debate about key topics and issues in case analysis;
- Analyse and interpret company financial histories
|Course organiser||Dr Alessandro Rosiello
Tel: (0131 6)50 8246
|Course secretary||Miss Lauren Millson
Tel: (0131 6)51 3013