Entrepreneurial Finance: Strategy, Valuation, and Deal Structure

Entrepreneurial Finance: Strategy, Valuation, and Deal Structure

Entrepreneurial Finance: Strategy, Valuation, and Deal Structure

Entrepreneurial Finance: Strategy, Valuation, and Deal Structure

Synopsis

Entrepreneurial Finance: Strategy, Valuation, and Deal Structure applies the theory and methods of finance and economics to the rapidly evolving field of entrepreneurial finance. This approach reveals how entrepreneurs, venture capitalists, and outside investors can rely on academic foundations as a framework to guide decision making.

Unlike other texts, this book prepares readers for a wide variety of situations and problems that stakeholders might confront in an entrepreneurial venture. Readers will find a unique and direct focus on value creation as the objective of each strategic and financial choice that an entrepreneur or investor makes. The authors specifically address the influences of risk and uncertainty on new venture success, devoting substantial attention to methods of financial modeling and contract design. Finally, the authors provide a comprehensive survey of approaches to new venture valuation, with an emphasis on applications.

The book appeals to a wide range of teaching and learning preferences. To help bring the book to life, simulation exercises appear throughout the text. For those who favor the case method, the authors provide a series of interactive cases that correspond with the book chapters, as well as suggestions for published cases. Finally, the book is organized to complement the development of a business plan for those who wish to create one as they read along.

Entrepreneurial Finance is most effectively used in conjunction with a companion website, http://www.sup.org/entrepreneurialfinance. On this site, Venture.Sim simulation software, spreadsheets, templates, simulation applications, interactive cases, and tutorials will be available for download. For those teaching from the book, the authors also provide an invaluable suite of instructor's resources.

Excerpt

History abounds with examples of extraordinary entrepreneurs whose new ideas and products have changed the world. Many people are enamored with the idea of creating new products and starting businesses. Accompanying the interest in venture creation, there is broad interest in venture capital, in investment banking, and in careers related to new venture financing, deal structuring, and harvesting.

Our primary motivation for writing this book is to empower students and practitioners to be more successful in developing and financing their ideas. Our overriding orientation is to apply the theory and methods of finance and economics to the rapidly evolving field of entrepreneurial finance.

This book is unique several ways. First, it builds on and significantly extends the tools and methods of corporate finance and financial economics to approach the difficult and important financial problems associated with starting and growing new ventures. Building on the foundations of financial economics makes the lessons more general and memorable and the applications easier to implement in varied settings. Mastery of the framework facilitates clearer and more defensible evaluation of different opportunities and choices than is possible on the basis of heuristics and intuition. With reliable and rigorous tools, you can be more confident that the decisions you make will be the right ones.

Second, while many books address aspects of entrepreneurship (writing business plans, leading and managing new ventures, etc.), this book has a unique and direct focus on the question of how new venture financing choices can add value and turn marginal opportunities into valuable ones. We emphasize value creation as the objective of . . .

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