MSc: Venture Capital and Growth Hacking
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Venture Capital Hacks in IT industry: From Zero to Negotiating and Investment Deal
- Course name: Venture Capital Hacks in IT industry: From Zero to Negotiating and Investment Deal
- Code discipline: CSE807
- Subject area: Software Engineering
Short Description
This course explores foundations for Venture Capital and provides the formation and development of knowledge, skills and abilities to attract investors, creating compelling presentations, closing deals to raise capital, and maintaining relationships with venture capital and other investors.
Prerequisites
Prerequisite subjects
- None
Prerequisite topics
- Existing startup, startup idea or desire to quickly develop one
- Interest and some basic knowledge on what is a startup and some successful startups and their stories of fundraising (Dropbox, Airbnb, Uber, Facebook, Pebble Smart Watch, )
- Basic math and accounting/finances skills to calculate cap table, dilution, company valuation and so on
- Soft and hard skills of a founder
- Presentation (oral and written) skills (English)
Course Topics
| Section | Topics within the section |
|---|---|
| Startup life cycle and types of investors |
|
| Venture capital: types of transactions and fundraising |
|
| Company valuation and financial planning |
|
| Fundraising practice |
|
Intended Learning Outcomes (ILOs)
What is the main purpose of this course?
The main purpose of this course is to develop an understanding of how start-ups or start-ups are financed, what types of investments are available, and what the business financing process entails. Also: develop practical skills in managing the financing process from the point of view of both an entrepreneur and an investor.
ILOs defined at three levels
Level 1: What concepts should a student know/remember/explain?
By the end of the course, the students should be able to ...
- Know the difference between convertible note, SAFE, and series A/B/C
- Explain where to form a legal entity correctly so as not to scare Western investors
- Describe when a lawyer is needed
- Elaborate purpose, benefits and harms of a non-disclosure agreement
- Elaborate key metrics and indicators for various types of projects
Level 2: What basic practical skills should a student be able to perform?
By the end of the course, the students should be able to ...
- The difference between types of investors
- How and why different types of investors work
- The structure of a good project presentation (startup pitch)
- How and why to develop an effective story about a project in an elevator (elevator pitch)
- What metrics and data are important to investors
Level 3: What complex comprehensive skills should a student be able to apply in real-life scenarios?
By the end of the course, the students should be able to ...
- Create a presentation of the project
- Create, establish and maintain efficient relationships with favorable investors
- Understand VC terminology
- Find and attract angel and VC investors for their ventures (startup projects)
- Negotiate fundraising deals
- Create and leverage the right startup metrics
- Listen to feedback and incorporate it into refining your presentation, product, and startup management.
- Work with investors and collaborate with them
Grading
Course grading range
| Grade | Range | Description of performance |
|---|---|---|
| A. Excellent | 85-100 | Pass |
| B. Good | 80-84 | Pass |
| C. Satisfactory | 51-79 | Fail |
| D. Fail | 0-59 | Fail |
Course activities and grading breakdown
| Activity Type | Percentage of the overall course grade |
|---|---|
| Paper #0: Testing by methods of assessing the value of a company | 30 |
| Paper #1: Written work: formulate an investment request | 30 |
| Paper #2: Public presentation | 60 |
Recommendations for students on how to succeed in the course
It is highly recommended that you treat the course writing as a tool to help you make decisions about growing your business.
The purpose of studying the discipline is the practice of interacting with potential investors, the classes welcome a proactive approach to creating and maintaining relationships with university partners, requesting contacts and meetings with representatives of venture funds
Participation is important. Showing up is the key to success in this course.
You will work in teams, so coordinating teamwork will be an important factor for success.
Resources, literature and reference materials
Open access resources
- Jackson, Michael. "The world and the machine." ICSE '95: Proceedings of the 17th international conference on Software engineeringApril 1995 Pages 283–292,
- The Guide to Product Metrics:
Closed access resources
- Ramsinghani M. The business of venture capital: insights from leading practitioners on the art of raising a fund, deal structuring, value creation, and exit strategies. – John Wiley & Sons, 2014.
- Feld B., Mendelson J. Venture deals: Be smarter than your lawyer and venture capitalist. – John Wiley & Sons, 2019.
- Michalowicz M. Profit First: Ein einfaches System, jedwedes Unternehmen von einem kapital fressenden Monster in eine Geldmaschine zu verwandeln. – Verlag Barbara Budrich, 2020.
- Aswath D. Investment valuation. – 2016.
- Blank Steven G. The four steps to Epiphany. – 2006.
Software and tools used within the course
- Google Sheets or MS Excel or similar
- Google Docs or MS Word or similar
Teaching Methodology: Methods, techniques, & activities
Activities and Teaching Methods
| Teaching Techniques | Section 1 | Section 2 | Section 3 | Section 4 |
|---|---|---|---|---|
| Problem-based learning (students learn by solving open-ended problems without a strictly-defined solution) | 1 | 1 | 1 | 1 |
| Project-based learning (students work on a project) | 1 | 1 | 1 | 1 |
| Differentiated learning (provide tasks and activities at several levels of difficulty to fit students needs and level) | 1 | 1 | 1 | 1 |
| развивающего обучения (задания и материал "прокачивают" ещё нераскрытые возможности студентов); | 1 | 1 | 1 | 1 |
| концентрированного обучения (занятия по одной большой теме логически объединяются); | 1 | 1 | 1 | 1 |
| inquiry-based learning | 1 | 1 | 1 | 1 |
| Learning Activities | Section 1 | Section 2 | Section 3 | Section 4 |
|---|---|---|---|---|
| Lectures | 1 | 1 | 1 | 1 |
| Interactive Lectures | 1 | 1 | 1 | 1 |
| Lab exercises | 1 | 1 | 1 | 1 |
| Development of individual parts of software product code | 1 | 1 | 1 | 1 |
| Group projects | 1 | 1 | 1 | 1 |
| Peer Review | 1 | 1 | 1 | 1 |
| Discussions | 1 | 1 | 1 | 1 |
| Presentations by students | 1 | 1 | 1 | 1 |
| Written reports | 0 | 1 | 1 | 1 |
| Experiments | 0 | 0 | 1 | 1 |
Formative Assessment and Course Activities
Ongoing performance assessment
Section 1
| Activity Type | Content | Is Graded? |
|---|---|---|
| Quiz | 1. Why do you need to know the value of a company? 2. What type of investor might be interested in a company in your stage of development? 3. Venture rounds, their relationship with the stage of development of the company. 4. Types of venture investors and their features of acceptance decisions. 5. Investment cycle: stages, process, preparation, documents. |
1 |
| Individual Assignments | Make a portrait and database of relevant venture investors for your company |
1 |
Section 2
| Activity Type | Content | Is Graded? |
|---|---|---|
| Quiz | 1. How to convey financial information about your company to stakeholders and investors? 2. How to convey financial indicators to the investor and justify the required amount of capital for growth? 3. How to calculate financial indicators based on reporting and assess the financial health of the company? 4. What could be the future consequences of overvaluing or undervaluing your startup? |
1 |
| Individual Assignments | Formulate an investment request for your company (or justify the lack of need for venture funds) |
1 |
Section 3
| Activity Type | Content | Is Graded? |
|---|---|---|
| Quiz | 1. How much capital should your company raise based on growth prospects? 2. Which financial ratios of the company should be improved and how? 3. How much capital should your company raise based on growth prospects? 4. What is a balance sheet and what operations are shown in this financial report? 5. What is an income statement and what transactions are shown in this financial statement? How does it relate to the balance sheet? 6. What is a cash flow statement and why is it needed? 7. How do investments, debt, sales, cash outflows affect the financial statement? |
1 |
| Presentation | 1. Assess the market potential of your project 2. Formulate and justify an investment request |
1 |
Section 4
| Activity Type | Content | Is Graded? |
|---|---|---|
| Quiz | 1. How do you determine if certain investor conditions are unfair? 2. What might be the typical future consequences of specific conditions and undervaluation or overvaluation of your company? 3. Strategies for Negotiating Better Deals and Maintaining Control of the Company 4. How does subsequent investment dilute your ownership? |
1 |
| Individual Assignments | 1. Develop a strategy for negotiating with the investor about your project 2. Write a welcome letter to the investor 3. Prepare an investment presentation and present it publicly |
1 |
| Group Project Work | 1. Build an investor negotiation strategy 2. Justify the investment potential of your business 3. Prepare a financial plan for the development of your company for distribution to investors |
1 |
Final assessment
Section 1
- Grading criteria for the final project presentation:
- 1. The difference between types of investors
- 2. What metrics and data are important to investors?
Section 2
- 3. Legal justification and main ways of doing business
- 4. When you need a lawyer
- 5. Economic, legal and patrimonial errors when closing deals Negotiation
- 6. How the financial performance of a startup is related to an investment round
- 7. Why is VC the Riskiest Asset class?
Section 3
- 8. Main metrics and indicators for various types of projects
- 9. Market Growth and Potential Studies
- 10. Calculating the Total Available Market
Section 4
- 11. Decision Criteria about the deal
- 12. Tactics of negotiations with an investor
- 13. Structure and content of an investment presentation
- 14. Strategies to maintain control over your company
The retake exam
Section 1
- The retake exam is the same - pitch deck presentation. For absence from the lectures or lack of activity during the lectures, 10-20 points will be subtracted from the score to achieve the grade.
Section 2
Section 3
Section 4