Entrepreneurial Finance: Opportunity Recognition, Evaluation & Resource Acquisition (4/25/2011 6/24/2011) Monday and Thursday, 1:30 3:20

20 Room C104 Instructor: Richard Chan, PhD Office Hour: Wednesday 9am -11pm (4/25 ~ 5/13) or 10am -12pm (05/16 ~ 06/24) Office: C313 Email: csrchan@szpku.edu.cn Office Number: 0755-2661-7001

Required Text Bruce R. Barringer and R. Duane Ireland (2010). Entrepreneurship: Successfully Launching New Ventures (Third Edition). Prentice Hall. Course Overview Entrepreneurship is the study of new venture creation and management and it occurs in a myriad of ways depending on the interactions of the entrepreneur and the opportunity. This course module, Entrepreneurial Finance, provides an overview of the finance related issues of creating a business, ranging from opportunity recognition and evaluation to resource acquisitions. The course is designed to appeal to individuals with strong desires to become entrepreneurs, to join startup companies, or to work in the venture capital industry. The course objectives are threefold: 1) to develop a scientific understanding of entrepreneurial finance, the theoretical framework for that understanding, and the empirical evidence in support of theory; 2) to transform this scientific understanding to practice; and 3) to provide firsthand experience with startup ventures and entrepreneurial uncertainty. Course Outcomes Knowledge to understand the entrepreneurial process: How to identify and pursue a business opportunity. Tools to analyze various challenges: How to define the fundamental issues of starting a business. How to assess a ventures risks, problems, and rewards. Skills to bridge the gap between theory and practice: How to transform ideas into action items. How to learn from your peers and role models. How to design and execute strategies.

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Course Structure and Requirements This is a highly participative course, and I strive to make the discussions, exercises, and projects both engaging and interesting. You, too, must come to class prepared and motivated to learn, if you want to have an optimal learning experience. You will be graded on the basis of individual and group performances, as follows: (1) Class Participation (2) Group Presentation (3) Research Idea (4) Exams (5) Team Project 10% 20% 20% 30% 30%

(1) Class Participation (10%): For you to benefit most from the lecture and discussion, it is important that you prepare for each class session. To participate in class means to attend class regularly, to complete the assigned readings prior to each class, and to actively participate in class discussion in a professional and value-adding manner. Note that professionalism, to me, means interacting with your peers in a constructive and respectful manner. It does not mean "do not speak until spoken to" or that you should not challenge my ideas or your peers ideas. As an effective manager or entrepreneur in the working world, part of your responsibility will be living up to the expectations of your peers, employers, and business partners, and I expect the same from you in class. At the end of the module, I might ask you to review your team members' professionalism and contribution, and reconcile these assessments with my own opinions to come up with a class participation grade. (2) Group Presentations (20%): Teamwork and presentations skills are essential for managers and entrepreneurs. In the group presentation exercises you will apply what you are learning by analyzing realistic issues and managing team processes. To make these exercises more realistic, teams are expected to self-manage, and all team members will receive the same grade. Case Study Presentation (10%). You will be randomly selected to form a team of four (4) members to present and discuss at least one case study to the class (15 minutes). Your task is to read the case, analyze it, and present your analyses to the class in a PowerPoint presentation. You are encouraged to use resources OUTSIDE of the textbook. ALL team members should be actively involved in all processes. The presentation should include but not be limited to the following items: 1) Introduction of the company and the business 2) The managerial issue and why its important 3) Analyses based on theories and models introduced in the chapter a. Focus your analysis on the questions raised in the case b. Use materials outside of the textbook to support and facilitate your analyses 4) Recommended solutions

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Academic Paper Presentation (10%). You will be randomly selected to form a different team of four (4) members to present to the class an assigned academic paper (15 min). Your task is to read the academic paper, analyze it, and present your analyses to the class in a PowerPoint presentation. ALL team members should be actively involved in all processes. Additional research about the topic is not required. The presentation should include but not be limited to the following items: 1) Key literature and theoretical background of the research question 2) Key argument and hypotheses made in the paper 3) Key research methodology used in the present study 4) Key findings 5) Differences from and/or consistency with the materials covered in the related textbook chapter. (3) Research Idea (10%): Complete and submit a brief research idea paper by the end of the class, to include identifying a focal question, providing a brief literature review, and developing logical hypotheses. The research idea page should not exceed one page (1-inch margins, doublespaced, 12 point Times New Roman font, Student Name in the Header). (4) Mid-term & Final Exams (30%). The mid-term and final exams consist of a set of objective questions (multiple-choice and true/false questions) and short-answer questions. Questions are based on the assigned textbook chapter and the supplementary material presented in the class lectures. There will be no makeup exam without written permission from the instructor. (5) Team Project (30%): You will be randomly selected to form a team of upto four (4) members to prepare for the following tasks: Interviewing an Entrepreneur (5%): Interview an entrepreneur and assess the venture he or she has started. The person your team interviews must have started his or her own business, or been part of the founding team. Success or failure of the venture is not important. Get a comprehensive understanding of the venture creation process and the role played by personal agency. In this interview, highlight the entrepreneurs background, how he or she recognized an opportunity to pursue, the factors that enabled the entrepreneur to grow the venture, and the reasons for exit. This is a group assignment. I recommend that you record the interview then transcribe it. Limit your written interview report to two pages (double-spaced, 1-inch margins on all sides, and 12-point font size). Business Idea Page (5%): Each team will submit a memo (up to 2 pages) introducing an business idea and how each member will contribute to the group effort. The business idea page should not exceed two pages (1-inch margins, double-spaced, 12-point Times New Roman font, Student Names in the Header). Business Plan Final report (10%): Each team will submit a final report (up to 6 pages, double-spaced, 12-point Times New Roman font, Student Name in the Header). I will evaluate your final report based on effort/motivation, information, logic, and persuasiveness.

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Business Plan Team Presentation (10%): Each team will present and provide its analyses of the opportunity it has been investigating throughout the term and offer a decision regarding to the future viability of the opportunity (approx. 15 minutes for the presentation and 10 minutes for Q&A). Entrepreneurship is more than just having a great idea. It is ultimately about convincing others, especially holders of critical resources, that your venture is seeking a value-creating opportunity and that your product/service will add value to their lives. Seen this way, how entrepreneurs present themselves and their product/service is critical to their success. In this spirit, you are urged to think creatively and engagingly about your presentation.

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Class Schedule Date Day Topic Overview of course and syllabus; why study this course? Introduction to Entrepreneurship Assigned Readings To be read prior to the session Assignment Timeline

04/25 M 04/28 Th 05/04 *W

Chapter 1 (p.1 to p. 22);

Team Formation Online Survey;

05/05 Th 05/09 *M

05/12 M 05/16 Th 05/19 *Th

05/23 M 05/26 Th 05/30 M 06/02 Th 06/08 *M 06/09 Th

Who can be an entrepreneur: Nature Ireland, & Webb, 2007; versus Nurture Shane, & Venkataraman, 2000; Zhao & Seibert, 2006; Hsu, 2008 Writing a business Plan Chapter 4; Sahlman, 1997; Case I The Entrepreneurial Process: Chapter 1 (p.23 to p. 27) Planning & Execution versus Bhide, 1994; Brinckmann et al., Effectuation 2010; Sarasvathy, 2001 Feasibility analysis Chapter 3; Industry and Competitor Analysis Chapter 5; Agarwal and Tripsas, 2008; Case II Recognizing opportunities and Chapter 2; Drucker, P. 1985; generating ideas: Cognition; Khaneman, 2003; TBD. Emotion; Dual Process Developing an effective business Chapter 6; Porter, 1996 model/Midterm review Midterm No reading assigned Assessing a new ventures financial strength and visibility; Building a new venture team Teams Venture Financing; Firm Valuation Chapter 8; Bhide, 1992; Case III Chapter 9 TBA. Chapter 10; HBS Note # 9-805019; Roberts, & Barley, 2004; Case IV De Clercq, & Sapienza, 2006; Petty, Gruber, in press; Shepherd, 1999; TBA No reading assigned

Interviewing an Entrepreneur

Business Idea Page

Interview with an Entrepreneur

06/13 *M

Venture Finance: Venture Investment Decision Making Guest Speaker: (TBA)

06/16 Th

Business Plan Final Report Research Idea

06/20 M Business Plan Presentation 1 06/23 Th Business Plan Presentation 2 06/27 Final Exam: Location TBA Note: Schedule is subject to minor changes; *Academic Journals

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