IB395-15 Finance in New Ventures
Introductory description
This is an elective module available for WBS and non-WBS students.
During the module we will look at issues affecting finance markets (debt and equity) for new ventures and small firms. These 'entrepreneurial' firms are typically informationally opaque and therefore find it harder to obtain finance than large firms. We will look at issues affecting the supply of entrepreneurial finance e.g., credit rationing and equity gaps; and issues affecting demand e.g., control aversion and entrepreneurial over-optimism.
There are three key stakeholder groups in entrepreneurial finance: entrepreneurs who want money to fund their ideas; finance providers (banks, angels, and venture capitalists), who want to make money from funding entrepreneurs; and government, which wants good entrepreneurs to receive funding and create jobs. The module therefore views entrepreneurial finance issues from the perspectives of entrepreneurs, finance providers,
and government.
Module aims
Broaden students' understanding of new venture financial markets.
Equip students with skills necessary for both raising finance for and evaluating investment opportunities in new ventures.
Provide students with a deep analytical understanding of new venture finance theory and practice.
Outline syllabus
This is an indicative module outline only to give an indication of the sort of topics that may be covered. Actual sessions held may differ.
- Introduction providing an overview of key issues including: the principal causes of financial constraints for new ventures; the role of financial intermediaries; the role of government support (British Business Bank); sources of entrepreneurial finance; the pecking order of entrepreneurial finances.
- The entrepreneurial context for new venture finance: What is an entrepreneur? What makes an entrepreneur?
- Evaluating new ventures for finance: venture capitalist and banker perspectives.
- Theory and evidence of credit rationing in new venture debt markets: Are entrepreneurs financially constrained?
- Developments in lending technologies for new ventures: Has the introduction of credit scoring for small business loans improved access to finance among new ventures? The role of asset finance and asset-based lending (invoice finance) in helping overcome financial constraints.
- Government intervention in new venture financial markets: The rationale for intervention: market failure. Is there a systemic market failure or is it restricted to particular types of business or capital? Examples of public assistance in new venture debt and equity markets (e.g., the Enterprise Finance Guarantee).
- Is there ethnic and/or gender discrimination in entrepreneurial finance markets?
- Developments in crowdfunding and peer-to-peer lending. Have these developments helped democratise entrepreneurial finance?
- Equity finance: Why are venture capital backed start-ups so rare; what are the rare qualities of these start-ups? What do venture capitalists do and how do they add value to their portfolio companies? How do venture capitalists value their portfolio companies?
- Harvesting equity investments.
Learning outcomes
By the end of the module, students should be able to:
- Understand the role and impact of access to finance on the performance of new ventures.
- Appreciate the rise in the importance of entrepreneurial markets and the history of economic thought on entrepreneurship.
- Understanding core economics and financial economics relating to new venture performance.
- Identify the sources of finance available eg loans , the various equity markets and government funding for new enterprise andcritically evaluate these.
- Apply the analysis covered on the course to a number of genuine case studies.
- Ability to recall and select relevant information.
- Analytical and logical reasoning abilities.
- Ability to evaluate information and draw a valid conclusion.
- Ability to understand issues from different perspectives.
Indicative reading list
There is no core (required) text book for this module. References to academic books, case studies, journal articles, policy documents, and articles from the financial press will be provided through lecture notes and seminar reading lists. Links to the texts will also be provided. Examples of texts referred to include:
Amit, R., J. Brander, and C. Zott (1998). Why do venture capital firms exist? Theory and Canadian evidence. Journal of Business Venturing, vol. 13, issue 6, 441–466.
Bhide, A. (2000). The origin and evolution of new businesses. Oxford: Oxford University Press.
Barnes, S. (2004). The Renovo Story: Venture Capital at the Cutting Edge. International Journal of Entrepreneurship Education, vol. 2, issue 3, 379-404.
Burke and Montgomery (2002). You say you want a revolution? A case study of MP3.com. International Journal of
Entrepreneurship Education, vol 1, issue 1, 107-132.
Carter and Jones-Evans (2012). Enterprise and small business: Principles, practice and policy, FT Prentice Hall, 3rd ed (Chp 20: Finance and the Small Business by Jarvis and Schizas).
Fraser, S. (2019). Entrepreneurial Borrowing: Do Entrepreneurs Seek and Receive Enough Credit?, Foundations and Trends® inEntrepreneurship, vol. 15, No. 5-6, 431-663.
Fraser, S., Bhaumik, S.K. and Wright, M., (2015). What do we know about entrepreneurial finance and its relationship with growth? International Small Business Journal, vol. 33, issue 1, 70-88.
Sahlman, W.A., (1997). How to write a great business plan. Harvard Business Review, vol. 75, issue 4, 98-109.
Subject specific skills
Analyse and evaluate the theory , evidence and practice relating to new venture financial markets.
Demonstrate a deep analytical understanding of how new venture financial markets operate.
Compare and consider how firms in the various financial sectors screen and evaluate new ventures for loan applications.
Provide financial screening and evaluation to a case study of a new venture.
Apply these specific knowledge and utilise these specialist skills in a direct and practical manner upon entering any of the new venture financial markets.
Transferable skills
Demonstrate written, mathematical and verbal communication skills.
Utilise and develop numeric and non-numeric skills.
Convey their understanding using an array of these forms of communication.
Study time
Type | Required |
---|---|
Lectures | 10 sessions of 1 hour (7%) |
Seminars | 9 sessions of 1 hour (6%) |
Online learning (independent) | 10 sessions of 1 hour (7%) |
Private study | 48 hours (32%) |
Assessment | 73 hours (49%) |
Total | 150 hours |
Private study description
Private Study.
Costs
No further costs have been identified for this module.
You do not need to pass all assessment components to pass the module.
Assessment group D3
Weighting | Study time | Eligible for self-certification | |
---|---|---|---|
Class Test | 20% | 15 hours | No |
Participation (15 CATS) | 10% | 7 hours | No |
Online Examination | 70% | 51 hours | No |
~Platforms - AEP
|
Assessment group R1
Weighting | Study time | Eligible for self-certification | |
---|---|---|---|
Individual Assignment | 30% | Yes (extension) | |
Online Examination - Resit | 70% | No | |
~Platforms - AEP
|
Feedback on assessment
Feedback via My.WBS.
Courses
This module is Optional for:
-
UIBA-N20B BSc in Management
- Year 3 of N20B Management
- Year 3 of N20B Management
- Year 3 of N23K Management with Accounting
- Year 3 of N234 Management with Digital Business
- Year 3 of N235 Management with Entrepreneurship
- Year 3 of N232 Management with Finance
- Year 3 of N252 Management with Marketing
- Year 3 of N23L Management with Strategy and Organisation
-
UIBA-MN3C Law and Business Four Year (Qualifying Degree)
- Year 3 of MN3C Law and Business Four Year (Qualifying Degree)
- Year 4 of MN3C Law and Business Four Year (Qualifying Degree)
- Year 3 of UIBA-N400 Undergraduate Accounting and Finance
-
UIBA-N404 Undergraduate Accounting and Finance (with Foundation Year and Placement/Undergraduate Partnership Programme)
- Year 5 of N4N7 Accounting and Finance (Foundation Year and Intercalated)
- Year 5 of N404 Accounting and Finance (Foundation Year and Placement)
- Year 5 of N405 Accounting and Finance (Foundation Year and UPP)
- Year 5 of N403 Accounting and Finance (with Foundation Year)
- Year 4 of UIBA-N403 Undergraduate Accounting and Finance (with Foundation Year)
-
UIBA-N401 Undergraduate Accounting and Finance (with Placement Year/Undergraduate Partnership Programme)
- Year 4 of N401 Accounting and Finance (Placement)
- Year 4 of N402 Accounting and Finance (Undergraduate Partnership Programme)
- Year 3 of UCSA-I1N1 Undergraduate Computer Science with Business Studies
- Year 4 of UCSA-I1NA Undergraduate Computer Science with Business Studies (with Intercalated Year)
- Year 1 of UIOA-EEU Undergraduate EU Exchange
- Year 4 of UGEA-RN21 Undergraduate German and Business Studies
- Year 3 of UIPA-L8N1 Undergraduate Global Sustainable Development and Business
- Year 4 of UIPA-L8N2 Undergraduate Global Sustainable Development and Business Studies (with Intercalated Year)
- Year 4 of UIBA-N1RA Undergraduate International Business with French
- Year 4 of UIBA-N1RB Undergraduate International Business with German
- Year 4 of UIBA-N1RC Undergraduate International Business with Italian
- Year 4 of UIBA-N1RD Undergraduate International Business with Spanish
-
UIBA-N20F Undergraduate International Management
- Year 4 of N20F International Management
- Year 4 of N20F International Management
- Year 4 of N20S International Management (with Accounting)
- Year 4 of N20T International Management (with Chinese)
- Year 4 of N20P International Management (with Entrepreneurship)
- Year 4 of N20M International Management (with Finance)
- Year 4 of N20U International Management (with French)
- Year 4 of N20L International Management (with Marketing)
- Year 4 of N20V International Management (with Spanish)
- Year 4 of N20W International Management (with Strategy and Organisation)
- Year 4 of N20N International Management with Digital Business
- Year 4 of N20E Management (with Foundation Year)
- Year 4 of N234 Management with Digital Business
- Year 3 of UIBA-MN3A Undergraduate Law and Business Studies
-
UIBA-N20J Undergraduate Management (with Foundation Year and Placement Year/Undergraduate Partnership Programme)
- Year 5 of N20J Management (Foundation Year and Placement)
- Year 5 of N20K Management (Foundation Year and UPP)
- Year 5 of N23H Management with Digital Business (with Foundation Year and Placement Year)
- Year 5 of N23J Management with Entrepreneurship (with Foundation Year and Placement Year)
- Year 5 of N23G Management with Finance (with Foundation Year and Placement Year)
- Year 5 of N255 Management with Marketing (with Foundation Year and Placement Year)
-
UIBA-N20E Undergraduate Management (with Foundation Year)
- Year 4 of N20E Management (with Foundation Year)
- Year 4 of N23N Management with Accounting (with Foundation Year and Placement Year)
- Year 4 of N23M Management with Accounting (with Foundation Year)
- Year 4 of N23E Management with Digital Business (with Foundation Year)
- Year 4 of N23F Management with Entrepreneurship (with Foundation Year)
- Year 4 of N23D Management with Finance (with Foundation Year)
- Year 4 of N252 Management with Marketing
- Year 4 of N254 Management with Marketing (with Foundation Year)
- Year 4 of N23P Management with Strategy and Organisation (with Foundation Year)
-
UIBA-N20C Undergraduate Management (with Placement Year/Undergraduate Partnership Programme)
- Year 4 of N20M International Management (with Finance)
- Year 4 of N20B Management
- Year 4 of N20D Management (Undergraduate Partnership Programme)
- Year 4 of N20C Management (with Placement Year)
- Year 4 of N20Q Management with Accounting (with Placement Year)
- Year 4 of N236 Management with Digital Business (with Placement Year)
- Year 4 of N237 Management with Entrepreneurship (with Placement Year)
- Year 4 of N232 Management with Finance
- Year 4 of N233 Management with Finance (with Placement Year)
- Year 4 of N253 Management with Marketing (with Placement Year)
- Year 4 of N23L Management with Strategy and Organisation
- Year 4 of N20R Management with Strategy and Organisation (with Placement Year)
- Year 3 of UMAA-G1N4 Undergraduate Mathematics with Business Studies
- Year 4 of UMAA-G1N5 Undergraduate Mathematics with Business Studies (with Intercalated Year)
-
UIOA-EOS Undergraduate Overseas Exchange
- Year 1 of UEOS Undergraduate Overseas Exchange
- Year 1 of UEOS Undergraduate Overseas Exchange
- Year 4 of UPXA-F3ND Undergraduate Physics and Business Studies (with Intercalated Year)
- Year 3 of UPXA-F3N2 Undergraduate Physics with Business Studies
- Year 1 of UIOA-EUS Undergraduate USA Exchange