COURSE NUMBER: MBA295D.1
COURSE TITLE: New Venture Finance
UNITS OF CREDIT: 2 Units
INSTRUCTORS: Ronald Star and Robert Ackerman
E-MAIL ADDRESS: rstar@hrice.com
CLASS WEB PAGE LOCATION: http://bspace.berkeley.edu
MEETING DAY(S)/TIME: Mondays 4:00 – 6:00 PM
PREREQUISITE(S): None.
CLASS FORMAT: Primarily cases and class exercises,
coupled with frequent guest lecturers.
REQUIRED READINGS: Cases and selected
readings.
BASIS FOR FINAL GRADE: 60% class participation and
during term, case-related deliverables; 40% final exam which will involve group
projects during the last three weeks of the semester.
ABSTRACT OF COURSE'S CONTENT AND OBJECTIVES: Finance
issues for entrepreneurial businesses are different than finance issues faced
by established companies. Raising money is primarily a sales and marketing
exercise, not an exercise in obtaining an extra five basis points on idle cash.
Also, creating projections for a product that does not yet exist and living by
a budget in the face of great uncertainty are real challenges for the
entrepreneurial venture.
This course will focus on all of the matters that the
CFO (or the CEO if he or she is playing the role of CFO) will need to own:
raising equity capital at each stage, raising venture debt, the company’s cap
table (including ensuring that the founder shares and employee stock options
are properly structured), preparing projections and budgets, the exit process
(whether through IPO or sale), and the potentially unfortunate issues that
arise when an enterprise runs out of money. Note that this will NOT be a
course about financial theory, betas, Black-Scholes calculations and the like;
instead it will focus on real world issues that arise in the context of the
financial needs of an entrepreneurial venture, many of which are about market
and marketing/sales issues. Certain issues raised in the MBA295
Entrepreneurship class will be explored in greater detail in this course.
Through cases and guest lectures this course will:
*
Examine different stages of financing for the new venture, including
bootstrapping, angel financing, venture financing and strategic investment.
*
Delve into new venture finance issues from differing perspectives, including
the perspective of the investor.
*
Seek to fully acquaint students with relevant deal terms that arise in targeted
financing alternatives, including in “down-round” and strategic investment
deals.
*
Include modules that focus on projections, unit economics and sizing the total
addressable market.
*
Consider issues related to “exit,” even if that exit is a bankruptcy, in
addition to the happier IPO and upside sale scenarios.
The Instructor:
Ron Star, is a 30+ year
business lawyer who focuses on new venture creation, and has been teaching at
Haas for over 20 years.
MODIFICATIONS TO COURSE FROM ITS MOST RECENT OFFERING: The course will focus
more closely on deal terms and will attempt to reduce (but not completely
eliminate) overlap with MBA 295A Entrepreneurship.
BIOGRAPHICAL SKETCHES:
Ronald Star
Mr. Star has been with the Howard Rice law firm in San
Francisco for over 30 years. He is Co-Chair of the firm’s Emerging Companies
& Venture Capital Practice Group and serves on the firm’s Management
Committee. His practice focuses on securities law, financings, venture capital,
intellectual property, and mergers and acquisitions. He works closely with
start-up and private companies on issues related to equity and financings,
intellectual property matters, the structuring of executive compensation
(including stock arrangements), strategic ventures, acquisitions and management
buy-outs.
Mr. Star's engagements run the gamut from representing
start-up companies in formation to representing major multinational companies
in strategic transactions. His particular industry specialties include computer
software and hardware, semiconductors, information services businesses,
Internet and multimedia companies, medical technology, food related companies,
retail operations and financial services companies.
Mr. Star is a frequent lecturer on venture capital
transactions, acquisitions, strategic partnerships, employment matters and
closely held businesses. He received his J.D. at Harvard Law School (magna cum
laude; Editor, Harvard Law Review; Editor-At-Large, Harvard Environmental Law
Review) and his MBA from Harvard Business School (with distinction). His
undergraduate degree is from Harvard College. Mr. Star was recognized as a
Northern California Super Lawyer in 2004 through 2006 and in 2010 and in 2011.