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Companies famous for receiving venture capital or business angel funding, early in their development include Apple, Microsoft, Google and Amazon. From an entrepreneurial perspective, venture capital is a significant source of investment for innovative entrepreneurs with attractive growth prospects, including start-ups in the information technology, life sciences and advanced engineering sectors.

Therefore, it is essential that entrepreneurs and business managers understand strategies, tools and techniques in securing venture capital finance. One topic of the module explores globalisation of the venture capital industry (e.g. China, the Middle East, India).

This module is intended for those interested in how funding is obtained from venture capital firms by entrepreneurs, and also how those working within the industry make and manage investments. It sits alongside the Entrepreneurial Finance and Private Equity module which takes a broad look at the production and analysis of company financial information for entrepreneurs, and the range of debt and equity financing methods available.

Topics covered

• The Venture Capital Circle
• Investment Strategy & Deal Sourcing
• Evaluation & Decision Making Process
• The Entrepreneur’s Journey
• Company Valuations
• Deal Structuring
• Post-Investment and Exit
• Return Measurements & Performance Drivers
• The Globalisation of the VC industry
• The Impact of VC on Society

Learning outcomes

If you complete the module successfully, you should be able to:

• understand the history of private equity and venture capital and describe the current regulatory and ethical challenges the venture capital industry faces.
• recognise how venture capital varies across different parts of the world.
• understand the role of venture capital in supporting the entrepreneurial process and company growth.
• explain the venture capital cycle and the structure of a venture capital fund and how the structure varies for businesses in different stages.
• explain how company valuations are set and how the investment deal is negotiated and structured.
• demonstrate the screening and the due diligence processes and the factors that govern venture capitalist investment decisions.
• critically discuss and evaluate how venture capital firms measure the performance and optimize returns from their investments.
• demonstrate how an entrepreneur with a start-up business plan would seek to obtain venture capital investment.
• critically appraise opportunities from a venture capitalist perspective, and demonstrate how suitable investments are identified.
• determine how venture capitalists evaluate, monitor and enhance business opportunities.
• construct arguments based on the interpretation of quantitative data.
• demonstrate effective written communication skills for formulating business plans, strategies and outcomes.
• demonstrate time management skills (including working under time pressure).
• apply analytical, problem-solving and decision making skills (including determining how venture capital firms would decide an investment deal).
• synthesise and use company valuation information and knowledge about venture capital effectively in the entrepreneurial sector.
• gain research, digital and information literacy skills.

Assessment

This module is assessed by:

Coursework (50% weighting):

• There is one item of coursework for this module which contributes to the final assessment mark for this module.
• Coursework: a written essay of a maximum of 2,000 or 2,500 words (deadline – weeks 9-12) The coursework is designed to check student progress, extend and reinforce concepts covered and also test individual performance.

Examination (50% weighting):

• The final piece of assessment will be an unseen written examination of 2 hours’ duration.

Essential reading

The following is provided as part of the module materials after you register:

• Lerner, J. Leamon A. and Hardymon, F., Venture Capital, Private Equity, and the Financing of Entrepreneurship, Wiley, 2012