Course Syllabus (http://www.keynoteconsulting.com/asmcourses/496/)

Entrepreneurial Financing, MGT 496, Spring 2004
University of New Mexico
Robert O. Anderson Schools of Business Management
Fritz Eberle
feberle@keynoteconsulting.com
505 343-1721
  Office Hours: After Class or by Appointment

Course Goals: The course will review various financing sources for small and growing businesses, and look at the typical requirements for acquiring financing from these sources. We will inspect some of the different ways capital sources tend to value businesses. There will be an emphasis on equity financing, looked at from both the entrepreneur's and investor's perspective. Much of the course material will be presented using case studies so that we might learn through the successes and mistakes of others.

Class Participation: Your presence and active contribution in class is vital if we are to have a lively and useful course together. This means being well prepared, contributing, listening, and building on others' ideas, being ready to disagree with others, and to develop your own position. Engage other students, rather than just the instructor. Since class participation is such an integral part of this course, you should attend all the classes.

Missed Classes: If you know beforehand that you will be missing a class, you should let me know in person, by phone, or email. Makeup will likely include a short half-page summary of the reading for the day. You will not be able to make up a quiz or possible assignments after the fact. If I don't hear from you, it will be considered a missed class. Missing more than two classes will seriously jeopardize even the best student's grade.

Students should also add to the dialog by bringing interesting articles from their readings in magazines, journals and newspapers that are relevant to the subject at hand. Everyone will be required to bring at least one article sometime during the semester. Bringing more earns brownie points, even if you aren't a brownie. If another student beats you to the punch on the same article, you will have to be more assertive when you open discussion the next time you try. Let's not all wait till the last minute.

Field Project: Each student will identify and interview entrepreneurs who have created companies that now have annual sales over $2 million. Students will determine and explore their financing strategies, especially how they bootstrapped in the early stages. Students may work with a partner, and complete two field cases together. This link will list the questions for your interviews following their submission on Feb 12. Each student will provide the class with a 1 page bulleted field project synopsis so it can be reviewed by everyone else during presentation to the class. Confidentiality Agreements and Acknowledgement Forms must be completed by you and your interviewees for the Small Business Institute.

We will not choose companies whose only source of financing has been personal/family resources. Note that "friends and family" financing would qualify, so long as there is a contractural agreement where the creditors received equity or market-rate interest payments. We should not forget to ask questions about how they bootstrapped their business initially. We will discuss additional questions and acceptable business criteria in class.

Case Studies: Students will form groups of four and be prepared to lead the discussion on any of the questions in the current case. Your team should plan to meet together to make sure there is understanding and agreement about the case content. Each team will prepare for each case by completing and turning in a write-up of the questions assigned for the case (maximum 2 pages for each case). It is OK to spread the work among team members, but then you should get together for review so everyone understands all the questions and answers. There is no need to rehash or recite the case content, but show how you arrived at your conclusions. If you understand the content, the answers will be brief.

Sometimes guest speakers need to make changes. If that happens, case study presentation dates may move either one week earlier or later. You will know this at least two weeks in advance, if earlier, or one week in advance, if later.

Quizzes: There will be two or three random short quizzes during the semester. They will concentrate on the immediate topic but may also include issues discussed previously.

Final Exam: The final exam will be cumulative, covering all the material and lectures. The questions will be straightforward.

Grading:
Attendence - You get one absence freebie, and no attendence is taken in the first class. You lose a grade increment off your final grade for every class skipped without prior arrangements.
Class Discussion and Participation - 10%
Field Case Preparation and Presentation - 15%
Valuation Problems, Quizzes, Articles - 20%
Team Preparation of Case Studies - 25% (graded by fellow team members)
Final Exam - 30%

The class results may be curved, but an A+ cannot be earned on a curved schedule. That is, if somebody does work hard and actually earns an A+, there will not be a curve.

If you are a qualified person with disabilities who might need appropriate academic adjustments, please communicate with me as soon as possible so that we may make appropriate arrangements to meet your needs in a timely manner. Frequently, we will need to coordinate accommodating activities with other ofices on campus. Course materials can be made available in alternative formats.

Required Reading:
Financing Your New or Growing Business (FYB), Ralph Alterowitz and Jon Zonderman, Entrepreneur Press, 2002
Copy Center Packet: Selected Readings and Cases from Stevenson/Roberts/Grousbeck, New Business Ventures and the Entrepreneur, Harvard Press, 1999.
Various readings given as handouts in class (marked below as "Handouts"), which will also be in the course file/folder at Parish Library. The file/folder is called "Selected Readings, MGT 496"
Securities Offerings for Small Businesses, click on this link for the article with the State of New Mexico Regulation and Licensing Department.
Business Journals (for article sources): Wall Street Journal, Barrons, NM Business Weekly, Outlook (part of Albuquerque Journal). All of these are available at Parish if you don't subscribe.
There will likely be additional readings brought to class, as relevant.

Class Schedule:

Jan 22 - Introductions, Personal Cards, Class Overview, Grading procedures. Discuss questions for Field Case
1. Assign: five questions you want to know from field case
Handout SBI Confidentiality Agreements
Handout valuation problems Part A,

Jan 29 - Planning for Financing: Your profile, Game Plans
Value, breakeven, anticipation, capital needs planning. May include some valuation issues.

2. Read for today: Introduction, Chapters 1-2, FYB
Handout: "Entrepreneurial Finance," (all handouts are also available in Parish MGT496 Folder)

Feb 5 - Valuation
Three valuation approaches: Asset, Earnings and Cash Flow. Also look at breakeven calculations.

Turn in assigned valuation problems Part A
Finalize Student Case Study Teams

3. Read for today:
Handout: Valuation Techniques, p.34-42
Handout:"The Deal: Valuation, Structure, and Negotiation," p.463-469

Handout: Field Project Questions
Handout valuation problems Part B. and ABC Furniture problems

Feb 12 - Friends and Family
Also more valuation issues and review of assigned problems
Turn in Field Project Questions Assignment
Turn in assigned valuation problems Part B

4. Read for today: Chapters 1-5, FYB

Handout: Vocabulary List

Feb 19 - Angel Investors
Continue with valuation problems, as necessary
Final list of Field Project Questions

Turn in choice for Field Project Interview

5. Read for today: Chapters 6-8, FYB
Final list of Field Project Questions

Feb 26 - Angels and VCs
Present Onset Case
Turn in Onset Questions (teams)

6. Read for today: Chapters 9-10, FYB

Prepare Case: Onset Case

Mar 4 - Venture Capitalists, Legal and Technical Issues
Guest Speaker - Guest Speaker - Ken Dettlebach, Sage Inc.

Stocks, options, and other definitions

7. Read for today: Chapter 11-12, FYB
Handout: Five Keys to Capital
Securities Offerings for Small Businesses
Securities Law and Private Financing
Handout: Term Sheet
Evolutionary Example: Valuation Stages

Mar 11 - Business Partners
Guest Speaker - Wayne Unze, Business Broker, The Vaughn Company

8. Read for today: Chapters 13-17, FYB

Mar 18 - Spring Break  

Mar 25 - Business Partners

Turn in Commercial Fixtures Questions

9. Read for today: Chapters 18-19
Prepare: Commercial Fixtures Case

Field case writeups due next week. Field Project Questions. Attach your document to email to me. No need to bring hard copy yet.

Apr 1 - Government Funding
Guest Speaker - SBA
Field case writeups due today by email Word attachment

10. Read for today: Chapter 20-22, FYB

Apr 8 - Bootstrap Financing (Debt)
Guest Speaker - Katherine Kitterman, New Mexico Bank and Trust
Turn in Fenschel Questions

11. Read for today: Chapter 23-28, FYB
Handout: "So, you thought the fed set interest rates?"
Prepare Case: Fenschel Lampshades

Apr 15 - Doing the Deal

12. Read for today: Chapters 29-30, FYB
also Investment Memorandum, pgs 316-24

Apr 22 - Doing the Deal
Turn in Steven Belkin Questions

Begin field case presentations, as possible.

13. Read for today:
Handout:"The Deal: Valuation, Structure, and Negotiation," p.469-478
Prepare Case: Steven Belkin

April 29 - Negotiating, and Avoiding Scams
Possible TVC Presentations
14. Read for today: Chapters 31--33
May 6 - Discuss any questions about final test.
Present remaining Field Studies; if case studies and guest lectures prevent earlier field studies from being presented, they will fall here.

15. Turn in team member evaluation forms

 

May 13? - Final