Being an entrepreneur and creating a startup requires money. This money is essential to building a prototype, hiring a great team, and launching a new product or service. How do you raise money for your startup? Venture capitalists.

Introduction to Venture Capital will teach you how to get the money needed to run your startup. You will learn who venture capitalists are, how they think and gain an understanding of their motives, investment strategies, and what they’ll expect from you.

In addition to lectures you will get first hand inside knowledge from experienced entrepreneurs and venture capitalists on what it takes to successfully acquire money for your startup!

The total learning hours for this Module amount to 50. These are distributed across the following categories:

Total Contact Hours: 20
Self-Study Hours: 5
Supervised Placement and Practice Hours: 0
Assessment Hours: 25

This Module carries a value of 2 ECTS.

• Institution: RWTHx
• Subject: Business & Management
• Level: Introductory
• Prerequisites: No mandatory prerequisites, but basic knowledge of Entrepreneurship and math is beneficial.
  
• Language: English
• Video Transcript: English
• Associated skills: Fundraising, Entrepreneurship, New Product Development, Venture Capital
  

Module-Specific Learner Skills:

At the end of the module/unit the learner will be able to

Integrate theory, research findings and practice for real-world problem solving.

• What a venture capitalist is and why they do what they do.
• How to select and pitch to a venture capitalist.
• Basic knowledge on valuation and negotiation techniques.
• What a Term Sheet is, its clauses, and possible pitfalls.
• What changes when a venture capitalist enters your company
• How, when, and why a venture capitalist exits your company and how it affects your and your team

Competences:

At the end of the module/unit the learner will have acquired the responsibility and autonomy to:

Manages people and projects and demonstrates the ability to respond to the fast-changing business environment.

• Manage the implications and processes of a VC exiting your company.
• Manage the changes and influence when a VC invests in your company.

Demonstrates autonomy in the direction of learning and a high level of understanding of learning processes.

• Take responsibility for fundraising and venture capital negotiations.
• Exhibit autonomy in pitching and presenting to investors.

Knowledge:

At the end of the module/unit the learner will have been exposed to the following:

Integrate forward-thinking concepts, standards, and managerial decision-making tools in the functional areas of management.

• Appreciating differences between VC and other sources of early-stage funding.
• Examine the role and motivations of Venture Capitalists and evaluate their impact on business investment and growth strategies.
• Comprehend the components and implications of a Term Sheet.
• Analyze the changes that occur when a venture capitalist invests in a company.
• Examine VC exit strategies and evaluate their impact on the business.

Skills:

At the end of the module/unit the learner will have acquired the following skills:

• Fundraising and venture capital negotiation skills
• Pitching and presenting to investors
• Financial modeling and valuation expertise
• Due diligence and investment readiness

Module 1

Why and how to choose a Venture Capital.

• What is Venture Capital?
• How a VC fund works?
• The Added Value of Venture Capital.
• Case Study/Homework.
• The difference between VC and other sources of early-stage funding.
• The current state of Venture Capital.
• Benefits and Inputs that a good VC can offer.
• The Entrepreneur - 5 Investment Firms Reveal What They Look for in Startups.

Module 2

How to Approach a Venture Capital.

• Understanding the pre-investment process.
• Choosing the (right) VC.
• Get Chosen by the Right VC.
• Case Study/Homework.
• What a VC is Looking for and how to Approach Him/Her?
• What venture capitalists want?

Module 3

It gets serious: You're about to see a Term Sheet.

• What is a fair valuation for your company?
  The 3P Framework.
• Case Study/Homework.
• Venture Capital Term Sheet Negotiation.

Module 4

The Term Sheet - Economic Terms.

• The Term Sheet – Introduction.
• New Institutional Economics - Why do term sheets exist?
• The Principal-Agent Theory.
• Case Study/Homework.
• Economic Terms: Stocks.
• Economic Terms: The Price Term.
• Economic Terms: The Capitalization Table.
• Economic Terms: Vesting.
• Economic Terms: Liquidation Preference.
• Economic Terms: Anti-Dilution Protection.

Module 5

The Term Sheet - Control and other Terms.

• The Term Sheet - Control Terms and Recap.
• Drag Along and Tag Along Rights.
• Protective Provisions.
• Redemption Rights.
• Board Representation.
• Confidentiality and Exclusivity.
• Conditions precedent to financing.
• The Term Sheet - Effects and Hazards of the Terms
• Case Study/Homework.

Module 6

Post-Investment Phase - From Involvement to Exit.

• The Post-Investment Process.
• The Exit.
• Exit Routes - The Trade Sale.
• Exit Routes - The IPO (Initial Public Offering).
• Exit Routes - The Buyout.
• Summary and Conclusion.
• Case Study/Homework.

Courses are generally made up of weekly modules with pre-recorded videos that you can watch on a schedule or at your own pace. There are supplemental readings and student discussion forums, as well as homework assignments and quizzes.

Passing grade                                                                  60%

Malte Brettel
Head of the Innovation and Entrepreneurship Group and Co-Direstor of the TIME Research Area at RWTH Aachen University