Finance for Entrepreneurship and Business Innovation (E&BI) - FULL course summary - Entrepreneurship & business innovation - Tilburg University
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Course
Finance (300322B6)
Institution
Tilburg University (UVT)
Book
Fundamentals of Entrepreneurial Finance
This summary covers all the content that is covered in the course: Finance for Entrepreneurship and Business Innovation (E&BI). This course is part of the Bachelor: Entrepreneurship and Business Innovation, at Tilburg University.
Year 1, semester 1
COMPLETE SUMMARY
finance for entrepreneurship and business innovation
finance for eampbi
entrepreneurship amp business innovation
tilburg university
fundamentals of entrepreneuria
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Tilburg University (UVT)
Entrepeneurship And Business Innovation
Finance (300322B6)
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Available practice questions
Finance for Entrepreneurship and Business Innovation (E&BI) - Entrepreneurship and Business Innovation - Flashcards
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Some examples from this set of practice questions
1.
Define Entrepreneurial finance
Answer: mix of entrepreneurship (intuition, experimentation) and corporate finance (numbers, logic)
2.
Why is financing for an Entrepreneur difficult? Name 4 points.
Answer: - Getting funded is considered difficult
- Considering investors with different characteristics (+difficult to contact)
- Money is a key resource
- Investors impact the company
3.
Why is financing for an investor difficult? Name 4 points.
Answer: - A lot of proposals
- Long and costly process
- Returns (or strategic objectives)
- Pass on knowledge and expertise
4.
What are the 4 points of the FIRE framework?
Answer: Fit: matching entrepreneur with investors
Invest: closing a deal
Ride: the path forward with all surprises
Exit: investors sell shares to obtain return on their investment
5.
Explain the FUEL framework
Answer: Fundamental structure: who is the investor
Underlying motivation: what does he want
Expertise and networks: what does he contribute
Logic and style: how does he operate
Answer: 1. Market risk (customer need not strong enough, not large enough, company fails to reach)
2. Technology risk (fails on technical grounds, protected, fails to deliver)
3. People risk (weakness of team leaders, networks, ability to grow the organization)
8.
What is due diligence?
Answer: research before making an investment decision
9.
Name the 3 financial projections
Answer: 1. Income Statement (IS): business model and profitability
Costs, revenues, profitability measures (flows)
2. Balance Sheet (BS): size, asset base structure, financing
Assets and financing (types); net income links to IS (stocks)
3. Cash Flow Statement (CF): cash changes from IS and BS
Financing needs, their amount and timing
10.
Primary data research = filtered and prepared. True of false?
Answer: False
Content preview
Finance summary
Chapter 1 – Introduction to Entrepreneurial Finance
- What is entrepreneurial finance
- Why does it matter
- What core challenges across investment process are
- Who are the investors and how they differ from one another
Entrepreneurial finance = mix of entrepreneurship (intuition, experimentation) and corporate
finance (numbers, logic). About the exchange between entrepreneur and investor.
3 fundamental principles
1. Resource gathering (financing to acquire resources to combine)
2. Uncertainty (outcomes not yet knowable)
3. Experimentation (flexibility, exploration, pivotable)
Why is it challenging and important?
Entrepreneur perspective
- Getting funded is considered difficult
- Considering investors with different characteristics (+difficult to contact)
- Money is a key resource
- Investors impact the company
Investor perspective
- A lot of proposals
- Long and costly process
- Returns (or strategic objectives)
- Pass on knowledge and expertise
Also important for job creation.
FIRE framework
Fit: matching entrepreneur with investors
Invest: closing a deal
Ride: the path forward with all surprises
Exit: investors sell shares to obtain return on their investment
Rounds correspond to a set of securities, called series (A,B,C…)
,FUEL framework
Fundamental structure: who is the investor
Underlying motivation: what does he want
Expertise and networks: what does he contribute
Logic and style: how does he operate
, Chapter 2 – Evaluating venture opportunities
- Framework for evaluating venture opportunities
- Breaking down value proposition
- Assess the attractiveness, risks and competitive advantage of a new venture
- Perform due diligence on a new venture’s business plan
Can use the VEM matrix
Need
- What exactly is the customer need?
- How strong is the need? How well do customers understand it?
- How much are customers able and willing to pay?
Solution
- Does the proposed solution solve the customer’s need?
- How does the proposed solution compare to the alternatives?
- To what extent can the innovation be protected?
Team
- Do the founders have the required skills and experience?
- What are their motivation and commitment?
- Is the founders’ team complementary and cohesive?
Market
- How large is the target market?
- How fast will the target market grow?
- How will adoption take place?
Competition
- Who are current and future competitors?
- What is the nature of competition?
- How can the venture differentiate itself?
Network
- What is the founding team’s reputation?
- What networks does the team have access to?
- How does the team forge and maintain new relationships?
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