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Entrepreneurial Finance: Venture Capital, Deal Structure & Valuation, Second Edition illustrates how the theory and methods of finance and economics can be used to guide strategic decision-making. This text prepares readers for a variety of situations that confront stakeholders in the rapidly evolving fields of entrepreneurial finance and venture capital, outlining ways to think from the investor's and entrepreneur's perspectives. Readers will find a unique and direct focus on value creation as the objective of each strategic and financial choice. The authors specifically address the influences of risk and uncertainty on new venture success and investment performance, devoting substantial attention to methods of financial modeling and contract design. Finally, they provide a comprehensive survey of approaches to new venture valuation, with an emphasis on applications.
The second edition is thoroughly revised to reflect new data, research, and changes in practice in this fast-moving field. It has an increased focus on venture capital, while maintaining its hallmark coverage of the financial aspects of entrepreneurship. Updates throughout address technological changes that have the potential to dramatically change the landscape for finance, such as recent innovations in contracting for early-stage ventures, artificial intelligence and machine learning, and Internet connectivity. Lastly, the book offers a companion website with a useful suite of resources for students and instructors alike, including spreadsheets, templates, simulation applications, and interactive cases and tutorials.
List of contents
1. Introduction
2. New Venture Financing: Considerations and Choices
3. Venture Capital and Angel Investing
4. Venture Deals
5. New Venture Strategy and Real Options
6. Developing Venture Strategy Using Simulation
7. Revenue Forecasting
8. Financial Modeling
9. Assessing Cash Needs
10. Foundations of New Venture Valuation
11. New Venture Valuation in Practice
12. Designing and Valuing Staged Investment with Real Options
13. Harvesting
14. The Future of Entrepreneurial Finance
About the author
Janet Kiholm Smith is Von Tobel Professor of Economics at Claremont McKenna College.
Richard L. Smith is Philip L. Boyd Chair and Professor of Finance at the University of California, Riverside.
