FM200: Entrepreneurial Finance

The course examines the financial elements of entrepreneurial firms, focusing on technology-based start-up ventures and the early stages of company development. It focuses on the complexities of valuating and financing young, high potential ventures.

You will address the key questions which challenge all entrepreneurs: how much money can and should be raised; when should it be raised and from whom; what is a reasonable valuation of the company; and how should funding, and exit decisions be structured?

The course will make extensive use of case studies, with a particular focus on technology-based businesses. Students will follow the founding history of a software unicorn from its early steps to exit. We will also examine a fast-growing on-demand food delivery start-up that is seeking an investor to cover its increasing need for working capital, and explore the information and context needed to value Peloton, the subscription-based fitness company whose stock price dropped after its IPO.

While primarily focusing on the entrepreneur’s perspective, we will also consider the investor’s viewpoint, in order to understand their motivations and incentives to avoid financing pitfalls and successfully negotiate the best financing outcome for a venture.

An understanding of a firm’s cash flow needs is central to understanding how to make financing decisions and we will spend significant time at the start of the course developing a shared analytical framework to use throughout the course. Students who have not studied accounting or finance recently should budget additional time outside the classroom to re-familiarise with a few basic concepts and formulas.

Students who receive an offer for this course are also eligible to apply for the Academic Director's Scholarship.

Prerequisites: Students should have previously studied Introductory Finance and Accounting, and possess basic mathematics and statistics skills.

Level: 200 level. Read more information on levels in our FAQs

Fees: Please see Fees and payments

Lectures: 36 hours

Classes: 18 hours

Assessment: Two-hour final examination (50%) and business plan exercise (50%)

Typical credit: 3-4 credits (US) 7.5 ECTS points (EU)

Please note: Assessment is optional but may be required for credit by your home institution. Your home institution will be able to advise how you can meet their credit requirements. For more information on exams and credit, read Teaching and assessment

This course is designed primarily for students who plan to be involved with a startup venture at some point in their career as a founder, early joiner, investor, board member or advisor.

However, it is also very applicable for students interested in gaining a broader view of the financing landscape for startup companies.

The course will also be relevant for students who are considering further education in this field, such as the MSc in Finance and Private Equity at the London School of Economics.

• A full breakdown of course outcomes will appear shortly.

The design of this course is guided by LSE faculty, as well as industry experts, who will share their experience and in-depth knowledge with you throughout the course.