L T P C Hrs

P20MSEE04 ENTREPRENEURIAL FINANCE

3 1 - 4 60
Course Objectives
 To familiarize the students with the different types of financing for their Entrepreneurship.
 To give idea about the different types of debt and equity financing opportunities.
 To know about the methods of financing new organization.
 To familiarize with the methods of financing the growing organization.
 To understand the venture capital valuation methods.

Course Outcomes
CO1 - Explain the Venture Life cycle and the type of financing needed for different stages.
CO2 - Determine the Capital needs for his Venture.
CO3 - Choose the correct financing for his new venture.
CO4 - Plan the financing for the growing venture.
CO5 - Utilize the venture capital valuation methods.

UNIT I INTRODUCTION TO ENTREPRENEURIAL FINANCE (12 Hrs)

Venture Life cycle: Development stage, Start-up stage, Survival stage, Rapid growth stage, Maturity stage.
Financing through the venture life cycle; Seed financing, Start up financing, First round financing, Second
round, Mezzanine, and Liquidity stage. Financial Planning throughout the Venture’s Life cycle, Short term
Cash Planning, Forecasting Sales, Projected Balance Sheet, Projected Income Statement-Projected Cash
Flow Statement.

UNIT II DETERMINING CAPITAL NEEDS (12 Hrs)

Debt and Equity Funding alternatives: Types of Debt, Private Placement vs. Public Placement, Raising capital,
Funding Capital Equipment or New Projects, Lease vs. Buy, Debt Financing and Equity Financing.

UNIT III NEW VENTURE FINANCING (12

Hrs)
Venture Capital: Types of Venture Financing, Costs and Securities Laws Considerations, Legal structure of
a venture capital financing, Creating and Recognizing Venture Value, Professional Venture Capital,
VC vs The Entrepreneur , Angel Financing, Bootstrap Financing, Seed Investing, Intellectual Property and
Strategic Alliances

UNIT IV FINANCING FOR THE GROWING VENTURE (12 Hrs)

Venture Investing Cycle, Determining the fund objectives and policies, Organizing the new fund, Soliciting
Investments in the New Fund, Capital Call, Conducting Due Diligence and Actively Investing, Arranging
Harvest or Liquidation. Other Financing Alternatives: Facilitators, Consultants and Intermediaries, Banking
and Financial Institutions, Foreign Investors, State and Central Government Financing Programmes,
Receivables Lending and Factoring, Mortgage Lending, Venture Leasing.

UNIT V VENTURE VALUATION (12

Hrs)
Venture Capital Valuation Methods– Key factors influencing Valuation –Valuation of Revenue Generating
firms – Multiples – Asset Valuations – Valuing Technology Companies - Mergers and Acquisitions - Exit and
Turn around - IPO

Text Books
1. Steven Rogers. “Entrepreneurial Finance: Finance and Business Strategies for the Serious
Entrepreneur, 3rd Edn. The McGraw Hil Education; 2014.
2. Leach,J. Chris and Ronald W Melicher. “Finance for Entrepreneurs”. 7 th Edn. Cengage Learning; 2020

Reference Books
 1. Douglas Cumming. “Venture Capital: Investment strategies, Structures and Policies”. John wiley &
Sons; 2010.
2. Steven Rogers, Roza Makonnen. “Entrepreneurial Finance”. 3rd Edn. McGraw-Hill Education; 2014.
3. M J Alhabeeb. “Entrepreneurial Finance: Fundamentals of Financial Planning and Management for
Small Business”. Wiley-Blackwell; 2015.
4. Mahendra Ramsinghani. “The Business of Venture Capital”. 2 nd Edn. John Wiley & Sons; 2014.
5. K.R. Subramanyam. “Financial Statement Analysis”. 10th Edn. McGraw Hill Education; 2014.

Web Resources
1. https://hbr.org/
2. https://www.entrepreneur.com/
3. https://www.tandfonline.com/doi/abs/10.1080/13691066.2010.526864
4. https://publons.com/journal/489133/the-journal-of-entrepreneurial-finance
5. https://nptel.ac.in/courses/110/105/110105067/