Who will benefit from this course?

Students interested in:

  • Venture investment

    For experienced venture investors, hone your skills and improve your performace. For newer investors, quickly build your knowledge and skills.

  • Traditional investment

    Venture investments are very different from traditional investments. Learn to avoid the mistakes many new investors make when investing in start-ups.

  • Entrepreneurship

    Lack of understanding about venture capital can result in failed fundraising or in bad deals for start-ups Learn to think about start-ups like a VC.

What will I learn in this course?

Raising money to fund a new venture involves entrepreneurs and investors in a challenging and critical process. In order to successfully scale, most new ventures will need to seek outside funding from venture capitalists or angel investors. Therefore it is critical for entrepreneurs to have an understanding of venture financing from the investor’s perspective. Venture investors must know how to identify potentially successful ventures, how to structure deals with entrepreneurs and how to generate the high returns that characterize successful venture capital investing. This course is designed to provide students with an understanding and working knowledge of both sides of the new venture funding process: that of an entrepreneur raising funding and of an investor in new ventures. The course is structured as an experiential learning simulation in which each student team will play the role of a venture capital fund identifying, evaluating and investing in real-world start-up companies. Some of the skills developed will include how to: identify new venture investment opportunities; project revenue and cash flows for new ventures; value a new venture; raise money to support the growth of a business; structure a venture capital investment and portfolio, and generate returns from venture capital.

What will I get from this course?

Students will evaluate investments in new ventures, create a forecasted financial plan and valuation for an early-stage business venture, engage in simulated investment presentations and negotiations between entrepreneurs and investors and will develop a portfolio strategy for a venture capital fund. Through this course, students will learn to look at new venture funding issues both from the perspective of a venture capital investor and that of a scalable entrepreneur. Students working in groups will act as a venture capital fund to evaluate and structure an investment into an early-stage, high-growth company. The potential investee companies will be actual start-ups from the region. The students will develop a financial model, valuation and term sheet for the company. The course will include live sessions, on-line videos and readings, experiential exercises, in-class student presentations, and discussions.

  • 30 hours of live sessions with Expara CEO Douglas Abrams

  • 78 videos - 15 hours of viewing and 61 original articles for reading

  • Live start-up pitches

  • 4 interactive graded assignments

  • Expara's award-winning VC-Start-up negotiation exercise

  • Pro-forma Valuation Excel Model for start-ups

  • Start-up evaluation checklist and term sheet template

  • Expara Academy Certificate of Course Completion

Course curriculum

  • 1

    Welcome to the course!

    • A message from the instructor

    • About the instructor

    • Connecting to my network

    • READ FIRST: Course Overview and how to complete the course

    • Course schedule

    • Course submissions and milestones

    • About Expara

    • Reading: Can entrepreneurship be taught?

    • Reading list for investors

    • Course submissions and milestones

  • 2

    Understanding risk and return

    • What is the relationship between risk and return?

    • Risk and return

    • Why fear risk?

    • Risk and return - Small versus scalable business

    • Overcoming the fear of failure

    • Reading: Risk and return

    • Reading - Two types of entrepreneurs

    • Reading - Fear and failure

  • 3

    Welcome to venture capital world

    • Welcome to venture capital world

  • 4

    Why do investors invest in VC?

    • Highest returning asset class

    • VC is the highest returning asset class

    • VC improves portfolio diversification

    • Reading - Why do investors invest in VC funds?

    • Reading - Top VC fund managers can consistently outperform

  • 5

    Why VC now?

    • Why VC now

    • Why venture capital now

    • Reading - Is moores law over?

    • Reading - Amaras law

  • 6

    Why do startups raise investment?

    • Scalable or lifestyle business?

    • Why should startups raise investment?

    • Reading - Why do start-ups raise money?

  • 7

    How do startups fund growth?

    • How to fund growth?

    • Which form of funding is best?

    • How to fund growth

    • Reading - What is the best form of funding for a start up

    • Reading - Only a moron starts a business with a loan

    • Reading - What is the difference between debt and equity?

  • 8

    High returns to VC investors

    • This could be you

    • This could be you

  • 9

    Success from failure

    • Success from failure

    • Success from failure

    • Reading - Success from failure

    • Reading - What percentage of start-ups really fail?

    • Reading - Why do so many start-ups fail?

    • Reading - Why is it good that so many start-ups fail

    • Reading - Do difficult things

  • 10

    How do VCs make money?

    • What kind of companies do VCs invest in?

    • How do VCs generate returns?

  • 11

    Evaluating investments - which companies generate high returns?

    • Which one is more scalable- product or service?

    • What sectors do VCs invest?

    • Reading - What do VCs invest in?

    • What kind of companies generate high returns?

    • Reading - Which scales better?

    • Reading - Good business vs good investment

    • Reading - What is the optimal time to enter a market?

  • 12

    How do VCs evaluate start-ups?

    • The investor’s decision tree

    • The investor’s decision tree

    • Key elements for success

    • Key elements for success

    • Reading - Three most important factors

    • Reading - Product market fit or team

    • Reading - Key elements of success

  • 13

    Investor and start-up communications

    • Communicating with investors

    • Investor and start up communication

    • Reading - How to connect with investors

  • 14

    Exercise: Start-up pitches

    • Exercise: Start-up pitches

  • 15

    Assessing product market fit

    • Defining innovation

    • Innovation and value proposition questions to ask

    • Innovation and value proposition questions

    • Why invest in innovators

    • Reading - Innovation and value proposition

    • Reading - Innovators, imitators and idiots

    • Reading - Is Grab an innovator or an imitator?

    • Reading - Pain and demand (How does pain drive demand)

  • 16

    Identifying favorable markets

    • Choose a market favourable to start ups

    • Market life cycles and structures

  • 17

    Market identification and analysis

    • Market identification and analysis

    • Determining who your customers are

    • Market identification and analysis questions

  • 18

    Sizing the market

    • Sizing the market

    • Top-down and bottom-up market sizing

    • Reading - Sizing the market for a start-up

  • 19

    Marketing strategy

    • CLV vs CAC

    • Product differentiation

    • Market positioning

    • 4 Ps

    • Marketing strategy questions

    • Reading - What are unit economics?

  • 20

    Sustainable competitive advantage

    • Sustainable competitive advantage

    • How startups beat established companies?

    • Competing with large companies

    • Sustainable Competitive Advantage (Market Leaders, Dinosaurs, and Small Mammals)

    • Sustainable competitive advantage questions

    • Creating last mover advantage

    • Reading - First mover disadvantage last mover advantage

    • Reading - Why are you using Whatsapp?

    • Reading - Why are there only two ride sharing companies in each market?

    • Reading - Market leaders dinosaurs small mammals and asteroids

  • 21

    Strategies to create advantage

    • Strategies to create advantage

    • First mover advantage & last mover advantage

    • Reading - SCA case study: who was the first mover in personal computers

  • 22

    IP strategy

    • IP strategy

    • IP strategy

    • Reading - Is it possible for someone to steal your start-up idea?

    • Reading - What are the elements of an IP strategy for start-ups?

  • 23

    Submission: Investment selection

    • Investment selection assignment

  • 24

    Evaluating the financial plan

    • In the financial section of the business plan

    • Why do we need a financial plan?

    • Financial projections - financial section of the business plan (2)

    • Valuation - financial section of the business plan (3)

  • 25

    Understanding the business model

    • Business Model - The financial section of the business plan (1)

    • Business model - how will you make money?

    • Key revenue model issues

    • Reading - What is a business model?

  • 26

    Disruptive Business models

    • Business model innovation

    • Business model innovations

    • Reading - What is the Gillette business model

    • Reading - Disruptive business models

  • 27

    Financial models and projections

    • Create financial projections

    • Download: Financial projection and valuation model

    • Why forecast 5 years?

    • Starting with revenue forecast

    • Top-down market sizing example - Plant-based meat

    • Top-down market sizing example - Sesame milk

    • Bottom up market sizing

    • Introduction to Revenue forecast in Excel

    • Why is the top-down forecast different from bottom-up forecast?

    • Mistakes startup CEOs make

    • Reading - Why will financial forecasts always be wrong?

    • Financial model explained 1

    • Financial model explained 2

    • Financial model explained 3

    • Balance sheet

    • Income statement 1

    • Income statements 2

    • Cash flow budget

    • DCF valuation model

    • Financials and DCF Valuation

    • Weighted average cost of capital

    • Valuation in financial modelling

    • Dilution schedule and investor ROI

    • Reading - Why are there so many unprofitable startups?

    • Reading - How is a model different from reality

  • 28


    • Why do most valuation methods fail for start-ups?

    • Why do most valuation methods fail for start-ups?

    • Reading - Why do traditional valuation methods fail?

    • Company valuation methods

    • Comparables

    • Methods of valuation - comparables

    • Discounted cash flow valuation

    • Methods of valuation - discounted cash flow

    • VC method

    • Methods of valuation - VC method

    • VC method valuation explained

    • Where do the numbers in VC method valuation come from?

    • Reading - What drives VC fund returns

    • Key valuation issues

    • Reading - Epidemic of overvaluation

    • Reading - Why don't startups pay dividends?

    • Reading - What is cost of capital and why is it important?

  • 29

    Exit strategy and ROI

    • Exit strategy and ROI

    • ROI and dilution

    • Calculate investor's ROI including dilution

    • Exit strategy and ROI

    • Reading - How do VCs make money

  • 30

    Investment process

    • VC investment process

    • Capital and legal structure of the firm

    • Equity issued to whom

    • Key legal agreements

    • Why is the multistep fundraising process so important?

    • The start-up fundraising journey

    • Reading - VC funding process enables innovation

    • Reading - VC or Angel or CVC which is best

    • Reading - Who are venture investors?

    • Reading - What is FF and F?

    • Reading - What is OM and how much of it do you need?

    • Reading - The best and worst times to raise money

    • Capital and legal structure of a firm

    • 5 key agreements in venture capital deals

    • Reading - Key agreements in VC investment

    • Reading - Why not give up the minimum equity

  • 31

    Key deal terms and term sheets

    • Economic terms in term sheets: Part I

    • Economic terms in term sheets: Part II

    • Control terms in term sheets

    • An example of how liquidation preference works

    • What is founder vesting

    • What does a clean cap table look like

    • Convertible debt vs equity

    • Key elements of the deal

    • Reading - Key terms in VC term sheets

    • Reading - Liquidation preference as valuation insurance

    • Cap tables

    • Reading: The 7 deadly sins of messy cap tables

    • Reading - What is founder vesting?

    • Download: Term sheet template and term sheet alternatives

    • Reading: How do VCs control startups after investment

    • Reading: Corporate structuring issues for VC investors

    • Reading: What forms of funding are used by VCs

    • Reading: What are convertible and SAFE notes and should we use them

    • Reading: Reserve matters and protective provisions

    • Reading: Retaining BOD control

    • Reading: What are reps and warranties

    • Reading: What is a drag-along clause

    • Reading: MFN and Pay to Play

    • Reading: What is redemption

    • Reading: What is anti-dilution protection

    • SAFE notes

    • Reading: What are ROFRs and ROFOs and when are they bad

  • 32

    VC-Start-up negotiations

    • VC-start-up negotiations

    • VC startup negotiations

    • VC - startup negotiation game briefing

  • 33

    How a VC fund works

    • Key terms of venture capital funds

    • Economics of a VC fund

    • How a VC fund works

    • VC fund portfolio strategy issues

    • VC_fund_portfolio_strategey_issues

    • VC fund portfolio strategy questions

  • 34

    Corporate venture capital

    • Nokia disrupted

    • Who will be disrupted next?

    • VC is hard but CVC is harder

    • Alignment of interest makes CVC harder

    • What do you need to succeed?

    • CVC: offensive and defensive weapon

    • Why CVC and why now

  • 35

    Submission: Financial analysis and term sheet

    • Financial analysis and term sheet assignments

  • 36

    Final exercise

    • Final exercise

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