COURSE NUMBER: MBA236V.1

COURSE TITLE: New Venture Finance

UNITS OF CREDIT: 3 Units

INSTRUCTOR: Adair Morse

E-MAIL ADDRESS: morse@haas.berkeley.edu

PREREQUISITE(S): None.

CLASS FORMAT: Mixture of cases, lectures, and in-class practice

REQUIRED READINGS: The main focus of class preparation will be the case or cases to be covered in class. Additional required and suggested reading will be included in the course materials.

BASIS FOR FINAL GRADE: Class participation accounts for thirty percent of the grade. Case memos account for ten percent. An in-class midterm is twenty percent of the grade. The final exam (an out-of-class case) counts for the residual.

CAREER FIELD: This course is very useful for those wanting to be an entrepreneur (for-profit or social) either now or in the future or for those wanting to work in startup financing or transactions as an angel, VC, impact investor, investment banker, etc. The course will likewise be helpful for those in asset management, SRI, or crowdfunding/platform investing. Finally, many students envision a career with ongoing ventures in the startup community; this course will help those position themselves for leadership in ongoing ventures by understanding the financial transitions of private ventures (managing through angel and VC rounds, preparing for M&A, and the IPO process).

ABSTRACT OF COURSE'S CONTENT AND OBJECTIVES: How do entrepreneurs successfully raise finance?  In New Venture Finance, we take the perspective of the entrepreneur. Our first step is to figure out the rules of the game: What type of financier might be interested in our new venture and why? How will the venture capitalist or angel value our ideas, and what will the financing package look like? How will funding evolve as the startup grows, and how will investors exit the deal? As we put the pieces of our knowledge into practice in cases, the course evolves to the second step, of positioning our new venture ideas for success, not just in raising finance but in using finance strategically. The course focuses on raising equity finance, covering angel finance, incubators, accelerators and VC finance. Pools of capital are changing, and thus, we also take a serious look at alternatives: crowdfunding, micro-alternatives, credit, social and impact funds, public partnerships, and corporate VC. Many of the cases are local, as California is indeed a special place, but we also take the world as large and study successful startup finance in new markets globally. NVF is a structured, case-based, practical class with the goal of ensuring that class members leave the course knowing the venture landscape and have the knowledge and skill to be strategic and wise in raising finance, particularly, early-stage finance. We will do a lot of in-class exercises for financial contracts to ensure that we as entrepreneurs are not disadvantaged in negotiating financing notes and rounds.

BIOGRAPHICAL SKETCH: Adair Morse is Assistant Professor of Finance at the Haas School of Business at the University of California at Berkeley. Morse holds a Ph.D. in finance from the Ross School of Business at the University of Michigan and masters degrees in statistics and agricultural economics from Purdue University. She began her career as an entrepreneur in transition Poland. Morse has taught Global Entrepreneurial Finance, and Entrepreneurial Finance and Private Equity at the University of Chicago's Booth School of Business. Her research covers the areas of household finance, entrepreneurship, corruption and governance, and asset management. Recent works include manuscripts on social impact funds and crowdfunding, as well as asset management funds and the Federal Reserve.  Her work on fraud helped to shape the bounty provisions in the Dodd Frank law of financial reform. A number of papers on household finance and corruption appear in the Journal of Finance and Journal of Financial Economics, where she has won, respectively, the Brattle Prize and the Jensen Prize (second prize) for the best paper in Corporate Finance.