Venture Capital I
This course introduces the operation of the venture capital industry from both a theoretical and practical perspective. The course follows the start-up process from initial formation of a new High-Tech venture through its private capitalization, the navigation of typical operational or strategic hurdles/milestones, and potential exit through merger or initial public offering. It analyzes each step in the process from perspective of the entity, of the founder-employees, and of the venture backers. It also considers the incentive mechanisms and control structures used at each step of the transaction (and alternatives to these structures), with a focus on both the underlying economic and financial theory, as well as on pragmatic considerations in structuring the transactions. Students are required to complete a term sheet negotiation exercise, offer a written analysis (in short pieces) related to speaker perspectives concerning the venture capital process, and sit for an examination. Speakers include visitors from practice with extensive experience in the VC, M&A, and the business formation process. QM: Finance (Law 467) (or a modest background in financial analysis) is a prerequisite for this class.