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.