UCL School of Management

Module Fact Sheet

MSING007: Entrepreneurial Finance

Level
Masters
Prerequisites
None
Eligibility
MSc Technology Entrepreneurship students only
Terms
Term 1
Delivery method
1 x 3-hour lecture (x 10 weeks)
Assessment
50% unseen 2-hour examination; 50% coursework

Course overview

This module provides the necessary knowledge and skills to enable a student to understand the nature and characteristics of financial planning in the context of entrepreneurship. This involves the understanding of the key financial statements (Income, Balance Sheet and Cash Flow); the financial planning process; the financial risks/rewards of entrepreneurship and innovation; new venture financial models and strategies; typical funding sources; the development of business presentations to attract outside funding; the due diligence process; and the strategies for negotiations for funding.

The module is divided into two parts. The finance part (taught by Simon Hulme) will enable students to understand all the key financial statements and concepts. The objective is to make students confident when talking to accounting professionals, bankers or venture capitalists about financial data. Classes are highly inter-active and short case studies and practical exercises are used to support the learning process. The financial assignment involves building a financial model in Excel, which can be used as a practical tool for a real-life start-up business, should the student wish. Students should be reasonably confident in using Excel if taking this module.

The accounting side of the course is designed for students with a limited understanding of subject. Hence any students who have previously studied accounting and finance may find some parts of the course simplistic.

The fundraising part of the module (taught by Itxaso del Palacio) is focused on understanding the process of raising external capital. This covers areas such as valuations of startups, due diligence processes, term sheets and negotiations with investors. Several professional investors and entrepreneurs will be sharing their experience and knowledge with students. Students will be able to meet them and learn from their experiences.

Learning outcomes

By the end of this module, a successful student will have gained an appropriate knowledge and understanding of:

  • Nature, purpose and characteristics of Income statements, Cash Flow statements, and Balance Sheets as financial reporting mechanisms

  • The use of financial ratios in measuring and interpreting financial performance

  • The use of break-even analysis

  • The use of capital investment appraisal

  • The practical construction of new venture financial models in Excel

  • The evaluation of alternative financing strategies

  • The development of a strategy to approach the right investors

  • The development of a deck and pitch to attract outside funding

  • An effective due diligence process

  • The design and negotiation of ‘deals’ and term sheets

Topics covered

  • Financial statements

  • Financial ratios

  • Financial modelling

  • Sensitivity & break-even analysis

  • Cash flow management

  • Sources of capital

  • Valuations of start-ups

  • Pitching to investors

  • Due diligence process

  • Term Sheets

Assessment summary

50% unseen 2-hour examination; 50% coursework comprising:

  • An individual assigment, carrying 50% of coursework marks based on the creation of a simple financial model in Excel;
  • An individual assignment, carrying 50% of coursework marks based on a case study and on the analysis of a real fundraising process.

Essential reading

BERMAN, K. and KNIGHT, J. (WITH JOHN CASE) (2008): Financial Intelligence for Entrepreneurs, Harvard Business Review Press, 1st Edition, 284 pages. ISBN: 978-1-4221-1915-0.

FELD, B. and MENDELSON, J. (2012): Venture Deals: Be Smarter than your Lawyer, John Wiley and Sons, Inc. 2nd Edition, 272 pages: ISBN: 978-1-118-44361-3.

Past versions of this module

MSING007 16/17

Last updated Wednesday, 26 July 2017