Venture Capital Course

Financing issues as they relate to entrepreneurial ventures. The financial needs and financing strategies of growth-oriented ventures are highlighted. Stages of entrepreneurial finance are investigated. The roles of valuation, deal structures and negotiation tactics are explored.

Video Transcript

Welcome to Venture Capital. This is an elective course that we’re glad that you signed up for. I think one of the things you’ll find is this is going to be kind of a nontraditional course. This is going to be a little bit of a different approach than you maybe experienced in the rest of your program. The reason for that is that we live in very, very exciting times, and particularly from a business point of view, that we have this opportunity really virtually open to anyone. But open to anyone who’s willing to take the risk of an entrepreneur to come up with an innovative idea, commercialize that idea. In other words, put that in the process so that it could actually support a business, and then raise capital for that idea, and then go out, and, particularly with the strength and the power of the internet, literally sell all over the world. And we’ve had success after success after success. There certainly has been the share of failures. But, by and large, this has been a tremendous run of these kind of companies. We have over 25 companies who are funded for over a billion dollars, and they have not even gone public yet. So this has been a significant buildup of capital and wealth and very, very productive companies, certainly some of our strongest, most influential companies—Microsoft, Google, Facebook, all of those companies and many, many, many more that we’ll talk about and we’ll look at have been so successful.

And the question that we ask ourselves in the business school is, how do we really teach this? What’s the best approach to this? And so, what you’re getting is an approach that we actually use in our full-time graduate courses, but we’ve got to modify it for our situation, which is that this is an internet-based course. And I think in a lot of ways it’s going to be more powerful doing it this way than it is even doing it live. I’ve had a tremendous experience doing this. I’ve seen some very, very innovative ideas. I’ve seen some very, very promising companies. We’ve had some companies go off and actually be in business and do very well. I expect that might be the case here. But from your perspective, this is going to be a different approach.

The approach is going to be that we’re going to go through a process each week where we look at a case, where we do a case. We’ll have a subject for that week. We’ll do the case. We’ll do a new company. So we’ll introduce a new company to the class. And in groups of two, you’re going to be the people that are actually presenting this. And then finally, we’ll do one of the Shark Tank episodes from TV. You can choose any one you want and present it. And I think you’ll really enjoy this. I think it’s an interesting way to approach this subject. There’s a lot to this, a lot to taking an innovative idea, commercializing it, raising capital for, and being successful. There’s a lot to it. There’s skills relative to—obviously tremendous management skills, skills relative to leadership. And we’ll talk about integrity and leadership, skills relative to financing. Financing’s very, very tricky with these companies because they’re high risk. They’re very, very high risk. Especially at a young stage, they’re extremely high risk. So, the financing of it, the valuation of it, which we’re going to do a couple of good—you’re going to learn two methods of valuation, both the discounted cash flow with terminal value and the venture capital valuation method.

And you’re going to do your own project. And I think one of the things you’re going to find is that it’s not just going to be one more project. This could be a project that really has a significant impact on your life if you decide to pursue this. So, this is going to be a little bit different. I want you to enjoy yourself and really enjoy the class. But most importantly, the onus is on you to really contribute to the success of the class. I’m really looking forward to working with you.