Unit: Darden School of Business
Department: Darden Graduate School of Business
Office location and address
90 Darden BlvdCharlottesville, Virginia 22903
Applies financial methods and practices to the development of early-stage companies. The goal of EF is to help managers make better investment and financing decisions in an entrepreneurial setting. The course covers the stages of a venture's life from raising startup financing to arranging an exit. The course also provides an overview of the private equity industry and the institutional structure for raising early-stage financing.
This course explores a comprehensive set of financial situations that arise in high-growth and high-risk enterprises. It focuses primarily on the investment phase of the private equity cycle and examines the investment strategy, valuation, and structure of ventures in their formative stages prior to becoming public companies. A range of enterprises are examined from early stage (venture capital) to late stage (mezzanine financing and buyouts) to provide perspective on how the maturity of an organization influences the nature and structure of financing and valuation. Issues related to the measurement of returns in private equity funds, valuing enterprises at different stages of development, and structuring deals using various forms of financing are covered as well as the analytical methods to better measure performance and value enterprises. Students will examine how each party's view of the value of the enterprise forms a basis for negotiation upon which the percentage of equity participation and the terms of the contract are determined as well as how the pricing and terms depend not only the deal itself but also upon prevailing market conditions. As private equity firms are either rapidly growing or changing organizations, students will learn that there must be sufficient flexibility and appropriate incentives built into the current round of capital raising and the contract terms to carry the firm through its next stage of development.
A Darden Independent Study elective includes either case development or a research project to be conducted by an individual student under the direction of a faculty member. Students should secure the agreement of a resident faculty member to supervise their independent study and assign the final grade that is to be based to a significant degree on written evidence of the individual student's accomplishment.