Entrepreneurship 4: Financing and Profitability

About this course: Start-ups can benefit from a wide variety of financing options on the path to profitability, but how do you know which one to choose? This course explores different financing models, including bootstrapping, organic growth, debt and risk capital, and also provides a clear overview of equity financing including the key types of investors: angels, venture capital, and crowdfunding. You’ll learn about terms, and term sheets, exit modes and what exit strategy might be best for you. By the end of this course, you’ll have an understanding of what success looks like and how it can be financed. You’ll also be ready for the capstone project, in which you will get feedback on your own pitch deck, and may even be selected to pitch to investors from venture capital firms.

Created by:  University of Pennsylvania

• Taught by:  Kartik Hosanagar, Professor

  Wharton School

• Taught by:  Lori Rosenkopf, Vice Dean and Director, Wharton Undergraduate Division

  Simon and Midge Palley Professor of Management

• Taught by:  David Hsu, Richard A. Sapp Professor of Management

  The Wharton School

• Taught by:  Laura Huang, Assistant Professor

  Management

• Taught by:  Ethan Mollick, Edward B. and Shirley R. Shils Assistant Professor

  Assistant Professor of Management- Wharton School

• Taught by:  David Bell, Xinmei Zhang and Yongge Dai Professor, Professor of Marketing

  Marketing

• Taught by:  Karl T. Ulrich, Vice Dean of Entrepreneurship and Innovation

  The Wharton School

Basic Info Course 4 of 5 in the Entrepreneurship Specialization Commitment 4 weeks of study, 1-2 hours/week Language English How To Pass Pass all graded assignments to complete the course. User Ratings 4.7 stars Average User Rating 4.7See what learners said Coursework

Each course is like an interactive textbook, featuring pre-recorded videos, quizzes and projects.

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University of Pennsylvania The University of Pennsylvania (commonly referred to as Penn) is a private university, located in Philadelphia, Pennsylvania, United States. A member of the Ivy League, Penn is the fourth-oldest institution of higher education in the United States, and considers itself to be the first university in the United States with both undergraduate and graduate studies.

Syllabus


WEEK 1


Business Models and Keeping Customers



This module was designed to introduce you to some of the key activities you can do in order to reach and sustain profitability. You'll learn the most important rule of entrepreneurship, the different kinds of business models, how to determine who your best customers are and how to develop strategies to retain them. You'll also hear from a successful entrepreneur and venture capitalist from Greylock Partners, who will talk about what indicators of success his firms looks for when deciding where to invest. By the end of this module, you'll be able to use business models to create customers who will come back for more, and know what key attributes to emphasize if you want to attract investment from venture capital.


4 videos, 1 reading expand

1. Video: Introduction to Financing and Profitability
2. Video: Crafting Your Business Model
3. Video: Lifetime Value of Customer
4. Video: Greylock Partners: Joseph Ansanelli
5. Reading: Lecture Slide PDFs

Graded: Building a Business Model and a Customer Base Quiz

WEEK 2


Financing, Valuation, and Terms



In this module, you'll learn the five most common methods of financing, and explore the financing process in depth. You'll also learn strategies for valuing your own company, and how venture capital and angel investors use valuations in negotiating milestones, influence and control. You'll discover how term sheets work, and what the terms mean, and you'll also examine the other terms used when financing with angel investors, friends and family, loans, and crowdfunding. By the end of this module, you'll be able to pick the financing pathway that's best for your enterprise, use common valuation strategies to set a reasonable price for your company, and negotiate favorable terms.


4 videos, 1 reading expand

1. Video: Financing Pathways
2. Video: Financing: Rounds and Raises
3. Video: Equity Financing: Valuation
4. Video: Equity Financing: Terms and Term Sheets
5. Reading: Lecture Slide PDFs

Graded: Financing Methods and Valuation Quiz

WEEK 3


Private and Public Financing, and Calculating Breakeven



This module was designed to give you a closer look at the advantages and disadvantages of both public and private financing, and to provide you with some simple but powerful tools for estimating how much capital you will need. You'll learn about the added benefits of working with venture capital firms, when and why to consider debt financing, and the latest trends in crowdfunding. You'll also learn to calculate how much money you are losing each month (the burn rate), and when you can expect to become self-sustaining (the breakeven point). By the end of this module, you'll be able to perform your own breakeven analysis so you can make a more informed choice about the best source of financing for you company.


5 videos, 1 reading expand

1. Video: Venture Capital and the Financing of Innovation
2. Video: Financing: Crowdfunding
3. Video: Debt Financing
4. Video: Burn Rate
5. Video: Breakeven Analysis
6. Reading: Lecture Slide PDFs

Graded: Choosing Financing, and Calculating Breakeven Quiz

WEEK 4


Elements of the Pitch and Exit Strategies



In this module, you'll learn the three key elements of your pitch to funders, and the examine the most common methods of exiting the entrepreneurial phase. You'll learn the structure and best practices for an executive summary, your pitch deck, and your pro-forma financial statements, and discover why these are so important to potential investors. You'll also learn the key differences between taking your company public and having it acquired by another, larger firm, and explore which method is best for preserving innovation. By the end of this module, you'll be able to create an effective pitch, and begin developing an exit strategy for your company that's relevant, effective and profitable.


4 videos, 1 reading expand

1. Video: Executive Summary and Pitch Deck
2. Video: Pro Forma Financial Statements
3. Video: Entrepreneurial Exits
4. Video: Course Wrap-Up
5. Reading: Lecture Slide PDFs

Graded: Strategies for the Pitch and the Exit Quiz