Entrepreneurial Financial Management C, 5 poäng (See also http://www.usbe.umu.se/~ai/ef/) Syllabus : Entrepreneurial Financial Management C Course code : FEUC25 Responsibility : Umeå School of Business Subject : Business Administration Level : C (advanced) Course credit : 7.5 ECTS / 5 points Field of education: Social Sciences This is a course at the C level in a BSc degree or an MSc degree at Umeå University. The course can also be included in study programmes in Business Administration and Economics at Umeå School of Business. 1. Resolution to offer the course The course is established by the Faculty of Social Sciences at the University of Umeå and the syllabus was confirmed by the Board of Umeå School of Business on May 29 2006. The syllabus is valid from October 30, 2006. 2. Objectives The course Entrepreneurial Financial Management will be focused on financial management within entrepreneurial firms (EF). An entrepreneurial firm is a young, high growth business, usually with a new technology focus. Entrepreneurial firms differentiate themselves from other forms of organizations through being more innovative, flexible, and adaptable. In this course, these firms will be examined at all phases of their life cycles, from initial idea generation to the ultimate harvesting of the venture. The main objective for offering the course is to provide students with an integrated set of concepts and applications drawn from entrepreneurship, finance, and accounting, that will provide a higher understanding of the financial environment in which these firms exist. Taking this course will develop students’ skills in building useful financial management spreadsheet models (e.g. financial forecasts and valuation models) in Excel. The student will also be introduced to current research in the field of entrepreneurial financial management. The course is divided into five parts: 1) Introduction to the field of entrepreneurial finance. Concepts of entrepreneurship and finance will be discussed. Particular emphasis will be laid on the difference between entrepreneurial finance and corporate finance. An overview of the subject of entrepreneurial finance also will be presented. 2) Determining financing needs and building financial forecasts. This second part of the course will start by exploring the financial goals and the financial statements of an entrepreneurial firm. After that the focus will be on building integrated financial forecasting models (forecasting cash flows, revenues, expenses etc). 3) Managing financial resources. This third part of the course will focus on managing and monitoring the different financial resources of an entrepreneurial firm. Both the managing and monitoring of internal (e.g. bootstrapping techniques) and external (debt and equity) sources will be covered. Attention will also be paid to day-to-day cash flow management. Students will also be presented with information on aspects of private equity markets surrounding entrepreneurial ventures (e.g. business angles, venture capital firms). 4) Valuation Value is one of the fundamental concepts of finance. In the fourth part of the course, students’ previous knowledge of valuation procedures will be expanded to include the problems attached to valuing firms in early stages of their life cycle. 5) Harvesting All entrepreneurs need to consider harvesting their investment (exiting the venture) at some point. This final part of the course investigates various forms of harvesting, for example, initial public offerings (IPOs) or acquisitions. The emphasis is on assessing whether the entrepreneurial firm is "ready" for harvesting. In addition, we will also discuss at the structural, legal, and dynamic issues of various forms of harvest. Expected learning outcomes After passing this course the students should: • Be able to explain the concepts of entrepreneurial finance and its difference to traditional corporate finance. • Be able to determine the financing needs of an entrepreneurial firm. • Possess basic skills in building financial forecasts for an entrepreneurial firm. • Be able to explain how different financial resources of an entrepreneurial firm are managed and monitored. • Possess understanding and skills in issues related to the sale of an entrepreneurial firm. • Be able to discuss current research issues in entrepreneurial finance. 4. Prerequisites Students must have completed courses in Business Administration worth at least 60 ECTS credit. Students are required to have a minimum of 40 credit points from A-and B-level courses in Business Administration. This corresponds to 60 ECTS credits in basic courses in Business Administration (Management, Accounting, Financial Investments, Cost Accounting and Marketing). 5. Teaching methods This course takes the form of lectures, discussions, exercises and cases. The core topics of the course will be covered by lectures, seminars and case studies. The students might also meet guest lecturers whose presentations will be examinable. On several occasions, students will be asked to make oral and written presentations of assignments, case studies and term papers. They will be expected to take an active part in classroom discussions, seminars and case studies. Students must be prepared to do a significant amount of work outside the class room in order to fulfil course requirements. 6. Examination Examination will be based upon a written examinations, individual and group assignments and oral presentations will be graded according to the following system: Pass with distinction (Väl godkänd, Vg, 75% or more), Pass (Godkänd, G, 50% or more) Fail (Underkänd, U, less than 50%). Students who do not pass at the time of the normal written examination will have an opportunity to sit a further examination within 2 to 3 weeks after the completion of the course. Additional examination opportunities arise every academic year one-week prior to the start of the autumn term. When a student has failed an examination on two occasions, the student has a right to have another grading teacher. A written request should be handed to the Director of Studies no later than two weeks before the next examination opportunity. The course grades are awarded when students have passed all examinations and all other requirements for the course. At the completion of the course, the instructor in the course may provide the European Credit Transfer System (ECTS) grade for exchange students who may request it, but only if all the course requirements have been completed. 7. Utilization etcetera The course will be taught entirely in English when there are students from abroad participating. Where this is not the case, the language of instruction may be in both Swedish and English. Information on whether the course will be taught in English can be obtained from the student counsellor. 8. Readings and other material Entrepreneurial Financial Management C, 5p Jeffrey Cornwall, David Vang, Jean Hartman, (2003) Entrepreneurial Financial Management. Pearson. Entrepreneurial Financial Management Readings Packet, available from the student affairs office (studentexpeditionen). Recommended Supplemental Readings: Kiholm Smith & Smith., Entrepreneurial Finance. London: Pearson Education 2003. Ross, S.A., Westerfield, R.W., and Jaffe, J.F., Corporate Finance, Boston: McGraw-Hill Irwin. Dollinger M.J., Entrepreneurship: strategies and resources. Upper Saddle River: Prentice Hall, 2003. ----------- UMEÅ UNIVERSITY Umeå School of Business SE-901 87 Umeå, Sweden www.usbe.umu.se