Carnegie Mellon University

Venture Capital & the Finance of Innovation

Course Number: 45824

Venture capital plays an important role in the financing and development of high-growth entrepreneurial firms. This course presents the tools and quantitative methods used by venture capital funds to evaluate, value, and structure their investments. These are particularly critical to understand if you intend to work for or receive funds from venture capital funds. Key Topics: The key subject topics covered by this course are: venture capital markets, valuation, contracting in venture capitals, and exits. Prerequisite Knowledge: The prerequisite for this course is Finance I (45720). Course Relevance: Students will learn about venture capital funds and how they value, structure, and exit their investments in portfolio companies. Course Goals: Students will achieve the following course goals: Understand the unique institutional features of venture capital and its corresponding economic frictions that must always be addressed; analyze investment decisions using valuation techniques tailored for entrepreneurial finance, including DCF and comparables; evaluate negotiation of funding, structuring deals, and the managing of venture capital investments; and study the exit of investments typically through initial public offerings and acquisitions. Assessment Structure: Students will be assessed by group cases, quizzes, a group project, and class participation. Learning Resources: The resources for this course will be a textbook and case studies. Extra Time Commitments: There are no extra time commitments outside of the scheduled course meeting times.

Degree: MBA
Concentrations: Entrepreneurship, Finance
Academic Year: 2022-2023
Semester(s): Mini 3
Required/Elective: Elective
Units: 6

Format

Lecture: 100min/wk and Recitation: 50min/wk