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Fin 335: Entrepreneurial Finance — Spring Quarter 2020
Instructor: Raymond Liguori
Class Time (Eastern Daylight Time)
Zoom Classroom Link
Office Hours via Zoom: Tue & Thu; 1:00 – 2:30 pm
By appointment only
Tuesday and Thursday, 4:00 pm to 5:50 pm, EDT
This is a four (4) credit course that examines new venture financing and financial management. We will cover the
various development stages of a new company from idea inception all the way to exit (via an IPO or sale transaction).
You will learn how to apply entrepreneurial finance methods to maximize the probablility of a successful venture
outcome and minimize risks.
Cash is the lifeblood of most young companies. We will discuss how to raise it, how to manage it and how to preserve
it. You will learn that many of the analystical techniques that work for established companies have to be modified, or
abandoned altogether, when analyzing start-ups. For instance, discounted cash flow valuation techniques used for
valuing established companies are not necessarily accurate when applied to valuing a company with no established
revenue, expense or cash flow streams.
The ideal audience for this course is students who are interested in starting their own firm or working at a start-up,
and those who are interested in careers in venture capital or private equity. The course will cover the following
Start-up idea generation
Evaluating new business ideas
Business organization and cash flow management
New venture valuation
Sources of new venture financing
Venture capital and private equity investing
Funding term sheets
Negotiation with venture capitalists
Strategies for exiting the firm
Course Policies: Attendance, Participation, and Etiquette
Students are expected to attend all classes, read assigned and suggested material, attempt practice problems, and ask
questions. We will frequently work through problems during class together so you wll need access to Excel or a
Correspondence: E-mail and Drexel Learn will be the primary source of communication outside of class. E-mail is an
official method of correspondence at Drexel University. As such, students are responsible for checking e-mail to
receive updates as well as reviewing updates to the schedule of materials (posted on class web site). For
confidentiality reasons, I can only correspond with official Drexel e-mail addresses and will not respond to non-Drexel
accounts. Please identify yourself (name) in all correspondences.
Classroom Conduct: Each lecture begins at 4:00 p.m. and ends around 5:50 p.m. Please get here on time. Students
are required to show respect to the professor and other classmates by exhibiting appropriate behavior.
Class Preparation and Practice Problems
Along with the material lectured in class, advanced preparation is probably the most important part of your learning
experience. Students should read through assigned reading before class and attempt all posted practice problems
before exams. Lecture slides will be available on BBLearn after class.
Students will be required to purchase the Entrepreneurial Finance course pack from Harvard Business Publishing. The
course pack is customized for this class and includes readings and cases. Instructions for purchasing this from HBS will
be sent via email. Be sure to read all Finance 335 lecture notes and assigned articles.
DREXEL LEARN. Except for the course pack, all course relevant material will be posted to Drexel Learn. The slides
provide a basic framework in the event that you miss class. However, remember, these notes are only outlines and
frequently do not contain all information presented in the lecture.
FIN 301 Minimum Grade: C
Class Participation and Homework
Thursday, April 30th
Week 2, 4, 6, 8
Please make every effort to attend class live. Class participation and homework is 10% of your grade and could well
impact your grade at the margin (e.g. the difference between a B and a B+ or A-). We will use various polls and popup exercises in each class which you can only access in the live class. All classes will be recorded to facilitate those
who live in different time zones and to facilitate review. If you can’t join live, please let me know before class.
All exams are open book and open note. Please do not make the mistake of assuming that “open book” equals “easy
exam.” You need to practice calculations several times before taking the exam. FYI, the final exam is cumulative.
There are four in-class exercises. Attendance and participation is mandatory for these assignments. We will use
break-out rooms in Zoom where you can work with other students on these assignments. I will pop into your room
from time to time to monitor your progress and answer any questions. Each student must submit his or her work
product via BBLearn within 24 hours of the in-class exercise. Please note that I may change the format and timing of
these exercises to better accommodate the online teaching format.
The final project will be a negotiation that will pit you against a classmate. One student will be assigned the role of
founder of a start-up company and the other student will represent a venture capital investor. You must negotiate a
term sheet for a Series A capital raise. Prior to negotiating and no later than Monday, June 1 at 12:00 noon, you
must submit to me a pre-negotiation worksheet. The negotiation will be completed in-class on June 2 and the final
deal terms, submitted to me prior to our final class on June 4th.
Grade Scale: A+ 97-100; A 93-96; A- 90-92.9; B+ 87-89.9; B 83-86.9; B- 80-82.9; C+ 77-79.9; C 73-76.9; C- 70-72.9;
D+ 65-69.9; D 60-64.9; F Below 60.
Please note that I do not round up. For instance, an 89.9 average is a B+ and will not be rounded to an A-.
Tuesday, April 7
Introduction and generating business ideas
Thursday, April 9
Evaluating ideas and organizing a business
Tuesday, April 14
Cash Flow Analysis and Management
Thursday, April 16
In-class exercise: Cash Build, Burn and Runway
Tuesday, April 21
Thursday, April 23
Tuesday, April 28
In-class exercise: New firm valuation
Thursday, April 30
Exam I (LN1 – LN6)
Tuesday, May 5
Sources of financing I: Early-stage funding
Thursday, May 7
Sources of financing II: Venture capital funding
Tuesday, May 12
In-class exercise: TBD
Thursday, May 14
Term sheets I
Tuesday, May 19
Term sheets II
Thursday, May 21
In-class exercise: TBD
Tuesday, May 26
Thursday, May 28
In-class negotiation exercise
Tuesday, June 2
In-class exercise debrief
Thursday, June 4
VIII. Academic Policies
Appropriate Use of Course Materials: It is important to recognize that some or all of the course materials provided to
you may be the intellectual property of Drexel University, the course instructor, or others. Use of this intellectual
property is governed by Drexel University policies, including the IT-1 policy found at:
Briefly, this policy states that all course materials including recordings provided by the course instructor may not be
copied, reproduced, distributed or re-posted. Doing so may be considered a breach of this policy and will be
investigated and addressed as possible academic dishonesty, among other potential violations. Improper use of such
materials may also constitute a violation of the University’s Code of Conduct found at:
https://drexel.edu/cpo/policies/cpo-1/ and will be investigated as such.
Makeup Policy: Note the date of all assignments. There are no make-up assignments, quizzes, or exams. Excused
absences will be granted in the following cases: official university business, illness certified by a physician, and/or
family emergencies. All instances require proper notification prior to the due date. If an absence is excused, the
student must complete a make-up assignment or exam. An unexcused absence will result in a zero. The final exam
(Exam 2) is mandatory for all students. Students who must miss the final exam for a university-excused absence will
take a make-up final during the second week of the following quarter only.
E-mail: E-mail is an official method of correspondence. You are responsible for checking e-mail to receive updates. For
confidentiality reasons, I can only correspond with official Drexel e-mail addresses and will not respond to non-Drexel
accounts. Please identify yourself by name in all correspondences. Due to the Family Educational Rights and Privacy
Act (FERPA), grades cannot be transmitted or discussed via e-mail in any circumstance. In addition, graded
assignments cannot be given to another student without advance written permission.
Code of Conduct: All students are expected to understand and abide by Drexel University’s Student Code of Conduct.
For details, see: https://drexel.edu/studentlife/community_standards/code-of-conduct/.
Academic Integrity: In order to protect and maintain a superior learning environment at LeBow College of Business,
this course adheres to the University's Academic Honesty Policy. All students are expected to review and abide by
these policies. For details, see: https://drexel.edu/provost/policies/academic-integrity/. Any issues will be addressed
in accordance with University procedures.
Academic Honesty for Remote Courses: Taking classes remotely does not provide the same level of supervision by
faculty for assessments and individual work that is present in the classroom. Students must understand that this does
not affect Drexel’s policies for academic honesty. Course work should be completed using only the materials,
resources, and collaboration options permitted by the instructor. Collaborating on individual assignments and tests is
strictly prohibited. Academic integrity incidents will still follow the normal processes and will be taken just as
seriously in this remote course facilitation model as they would in person. Students who know of academic
dishonesty incidents should inform faculty or college administration in a timely manner or else they may be subject to
similar disciplinary actions.
Students with Disabilities Statement: Students with disabilities requesting accommodations and services at Drexel
University need to present a current Accommodation Verification Letter (AVL) to faculty before accommodations can
be made. AVL's are issued by the Office of Disability Resources (ODR). For additional information, contact ODR
at http://drexel.edu/oed/disabilityResources/students/, James E. Marks Intercultural Center, 3225 Arch Street,
Suite 011. Phone: 215.895.1401,TTY: 215.895.2299 Email: email@example.com
Course Add/Drop/Withdrawal Policies: Please refer to the following University policies regarding adding, dropping,
and withdrawing from courses:
Course Revisions: Changes to the course may occur at the discretion of the instructor. Barring unforeseen
circumstances, any changes will be communicated to students with at least one week’s notice. With a nod to the 9th
Amendment of the United States Constitution: “Things not explicitly forbidden in this syllabus are not necessarily
approved; Things not explicitly approved in this syllabus are not necessarily forbidden.” Anything not explicitly
mentioned herein will be covered on a case-by-case basis, with your humble professor as the semi-benevolent arbiter.
Zoom Participation and Support
The link for attending class is: https://drexel.zoom.us/j/429996246 . For security purposes, students must log into
Zoom using your Drexel account.
Please make every effort to attend class live. Class attendance and participation is factored into your grade. We will
use various polls and pop-up exercises in each class which you can only access in the live class. If you cannot attend
the live session, please let me know before class.
Zoom apps exist for Windows and Mac computers, as well as many mobile platforms (visit zoom.us/download).
Students can test compatibility prior to any class session by visiting zoom.us/test from their device. Students should
minimize distractions and multi-tasking during class time to fully engage with the class. Instructors will ask students
to join via audio and/or video to gauge attendance and class participation. Also pay attention to any special
instructions or a required password that your instructor may have posted along with the webinar link.
For security purposes, students will be asked to log into Zoom using their Drexel account. Students who do not log in
may not get connected to the class meeting. Follow these steps to log in the first time:
Visit drexel.zoom.us and click the option for Sign In Standard to ensure that your Zoom account is activated. Enter
your username and password into Drexel Connect to complete the login, but then you can close that browser
Download, install, and launch the Zoom client for your device (zoom.us/download)
Click the Sign In button in the Zoom app but then click the “Sign in with SSO” option, enter Drexel as the Company
Domain and click Continue. Enter your Drexel username and password into Drexel Connect and complete any multifactor authentication steps.
After you authenticate, you will be asked to open a link in the Zoom application to complete your login to the Zoom
Note: You should not have to repeat this process on that computer if you stay signed into the app. So for
subsequent meetings, you would just need the meeting ID or link and any meeting password.
Other Best Practices: When joining a zoom room, mute your microphone so that you don’t cause noise or feedback
in the session. If you have a question/comment, you can either type it into the chat or you can use the “Raise hand”
feature to signal to your instructor that you wish to speak, wait to be acknowledged, and then unmute your
microphone. Be sure to mute again when finished. It is also recommended that you use earphone/earbuds on a
webinar call to help reduce feedback and echo. Tip: the person causing echo in a call will usually not hear the echo
Bandwidth Issues: Students who experience connectivity issues related to internet bandwidth can try the following:
Check for bandwidth usage – chances are you’re not the only one using the internet at your location. Check to see if
anyone else is streaming videos and, if they are, ask if they could stop until your class is over.
Dial in from a phone – usually the most important piece of a remote class is what is being spoken. Lecture slides
don’t change that often. So if you aren’t getting consistent audio, try dialing in by telephone using the “Switch to
Phone Audio” option that is found under audio settings (the arrow to the right of the microphone icon on the
desktop client). Then be sure to mute your phone either from the handset or in the Zoom client.
Turn off your video – this saves a little bandwidth, but make sure you check with your instructor to see if video is
required for attendance. If you need to disable video, at least upload a profile picture so that your face is still visible
when your video is off.
Ask about the recording – some instructors will post links to class recordings in Blackboard while others may only
distribute those links to students with a valid reason for missing class (e.g. substantial shift in time zone). If you were
present but experienced internet issues, consider asking your instructor for the recording link so you can review the
Live Zoom support is available from within the Zoom app. Support is also available via Drexel’s 24/7 Student Support
at 215-895-1224 (or for business courses only by contacting LeBow Tech at firstname.lastname@example.org or 215-895-2113).