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.
Assistant Professor of Business
Professor Tania Babina joined the Columbia Business School in 2016. She received a Ph.D. from the Kenan-Flagler Business School at the University of North Carolina. Her research is at the juncture of corporate finance, labor economics, and entrepreneurship. More broadly, she studies inter-relationship between human capital and firm investment, financing, and organizational choices. Her current research explores drivers of entrepreneurship and factors predicting entrepreneurial...