What is “entrepreneurial finance”? In short, it is a course designed to learn how to evaluate, finance, and capitalize on new business opportunities. More generally, we know that finance studies valuation and the allocation of resources under uncertainty. Indeed, fundamental topics in finance (e.g., valuing cash flows, assessing the cost of capital, choosing among suppliers of funds, and aligning incentives for value maximization) are as important for entrepreneurial firms as for more established firms. However, the capital market for financing entrepreneurial activities, and private equity investing more generally, differs fundamentally from capital markets considered in standard corporate finance. New and growing firms likely to have less information about their future prospects. Investments in private companies are also often illiquid and under-diversified, hence difficult decisions about financial contracting have to be made.
The primary objective of the course is to provide an understanding of the concepts and institutions involved in entrepreneurial finance and private equity markets. Since entrepreneurial finance and private equity investing are intrinsically linked, the course is purposefully designed to be broad and comprehensive. As an entrepreneur, you cannot negotiate effectively without understanding investors’ motivations. As an investor, you cannot evaluate a potential investment opportunity without appreciating entrepreneur’s perspective and incentives. Therefore, the course is designed for students who are interested in either pursuing entrepreneurial activity or financing entrepreneurial ventures.
Adjunct Associate Professor
Dean Emeritus; Russell L. Carson Professor of Finance and Economics
Professor Hubbard is a specialist in public economics, managerial information and incentive problems in corporate finance, and financial markets and institutions. He has written more than 100 articles and books on corporate finance, investment decisions, banking, energy economics and public policy, including two textbooks, and has authored The Wall and the Bridge and coauthored Balance, The Aid Trap, and Healthy, Wealthy, and...