Startup Financing, Valuation, and Venture Capital

ESMT Berlin Germany

The aim of this course is to provide students with little or no finance background with solid basic knowledge of valuation techniques and capital raising process in startup companies. Students will

  1. gain an understanding of the process which entrepreneurs go through to raise different types of financing from investors;
  2. learn about possible financing issues from a variety of entrepreneurial companies in Berlin;
  3. and develop the competences to value these companies from an investor perspective.

The first part of the course will emphasize the understanding of motivations of the different actors (investors and entrepreneurs), and how to reconcile their interests through contracting. Students will learn how deals are structured between investors and entrepreneurs to mitigate potential conflicts and agency issues inherent to young companies. Students will especially learn about the particulars of venture capital financing. The course will then discuss valuation methods and their applicability for innovative startups.

Students will have the opportunity to “get their hands dirty”, thus, we place focus on the practical implementation of financial modeling and valuations for startup companies. The valuation tools and techniques include preparation of a full financial model, estimation and forecasting of free cash flows and other valuation attributes, as well as application of valuation techniques particular to young firms.

At the end of this course students will be able to

- know more about different forms of entrepreneurial finance;

- evaluate financing alternatives for new ventures;

- understand venture capital investments; and

- value startup firms using various financial models and valuation approaches

The course is beneficial for future entrepreneurs looking to attract investors, as well as those planning careers in investment banking, portfolio management, corporate finance and financial consulting.