Veidlapa Nr. M-3 (8)
Study Course Description
Venture Capital
Course Code
SBUEK_189
Branch of Science
Economics and Business
ECTS
6.00
Target Audience
Business Management
LQF
Level 6
Study Type And Form
Full-Time; Part-Time
Study Course Implementer
Course Supervisor
Līga Sileniece
Structure Unit Manager
Ieva Puzo
Structural Unit
Faculty of Social Sciences
Contacts
Dzirciema street 16, Rīga, szf@rsu.lv
About Study Course
Objective
The course provides and introductory insight into the legal, financial and organisation aspects of innovation-driven companies, which exist in close relationship with venture capital industry and finance through risk capital. The students get introduced to the concepts of intellectual property and its market value, raising capital, investment funds, specific traits of venture capital-backed businesses, as well as means of intellectual property protection. It attempts to explain the rationale behind modern company valuations (why are some ventures valued billions without generating any cash anyway?), venture capital investment into early stage/start-up businesses and emphasizes the modern shift towards viewing the intellectual property assets as the major drivers for company’s value.
The course is focused on offering practical knowledge on VC and urges active student participation throughout all sessions.
Preliminary Knowledge
Basics of economics and finance, minor exposure to innovation-based companies and law background is advised.
Learning Outcomes
Knowledge
1.Understanding the rationale behind venture capital-backed companies; Differentiating between types of capital being invested; Being able to independently assess cases and development stages of venture-backed companies; Having a basic understanding of the concept of valuation of innovation-backed ventures; Differentiating between basic types of intellectual property assets and their effect on company’s investment attractiveness.
Skills
1.Being able to build, structure and present research findings in analysing investment cases during group presentations; Being able to conduct independent research; Learning how to understand and conduct basic valuation of innovation-backed buisnesses and intellectual property assets.
Competences
1.Ability to navigate the industry of innovation-driven businesses, understing their functioning logic, being fit to evaluate basic investment opportunities and potential impact intangible assets bring to an IP-backed business. In addition, students are expected to gain basic understanding on IP-related risks, protection mechanisms.
Assessment
Individual work
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Title
|
% from total grade
|
Grade
|
|---|---|---|
|
1.
Individual work |
-
|
-
|
|
Home readings, case studies, group presentations.
In order to evaluate the quality of the study course as a whole, the student must fill out the study course evaluation questionnaire on the Student Portal.
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Examination
|
Title
|
% from total grade
|
Grade
|
|---|---|---|
|
1.
Examination |
-
|
-
|
|
1. In-class activity – 20%.
Submissions: 4 summary reports to be submitted throughout the course, each 1 – 3 pages.
2. Case study analysis and Presentation (both text and verbal delivery) – 40%
3. Exam – 40%.
Two-part exam: In-class group project presentation, take-home exam.
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Study Course Theme Plan
FULL-TIME
Part 1
-
Lecture
|
Modality
|
Location
|
Contact hours
|
|---|---|---|
|
On site
|
Auditorium
|
2
|
Topics
|
Introduction into concepts of venture capital (VC), serial entrepreneurship and private equity.
Overview of business types, venture industry and actors involved with a specific focus on venture funds and their functioning logic. General insight into history of private equity, the structure of VC industry, main actors involved and why do we talk about it in the first place.
Description
Literature: Financing Innovative firms through venture capital, pages 1-14, available at: http://www.bei.org/attachments/pj/vencap.pdf
https://medium.com/founder-playbook/the-history-of-silicon-valley-transistors-stanford-and-venture-capital-6a761f171e9d
|
-
Lecture
|
Modality
|
Location
|
Contact hours
|
|---|---|---|
|
On site
|
Auditorium
|
2
|
Topics
|
Types and sources of capital.
Intellectual property as an asset in the VC-related businesses. IP, its forms and strategies for protection, major risks and methods of its monetisation.
Description
Literature: Sources of Financing: Debt and Equity, online at: http://www.usheproduction.com/design/8020/downloads/4a.pdf, pages 466-476
|
-
Lecture
|
Modality
|
Location
|
Contact hours
|
|---|---|---|
|
On site
|
Auditorium
|
2
|
Topics
|
Logic, structure and behaviour of venture capital funds .
Risk capital investment criteria and evaluation process. How is innovation used to attract capital?
Description
Literature: https://medium.com/@mvernal/sequoia-and-seed-investing-3b1acbf68249
Marija Simic, “INVESTMENT CRITERIA SET BY VENTURE CAPITALISTS”, online at: https://hrcak.srce.hr/file/221353
|
-
Lecture
|
Modality
|
Location
|
Contact hours
|
|---|---|---|
|
On site
|
Auditorium
|
2
|
Topics
|
VC investment landscape, pipeline and regulation.
Logic of valuations.
Description
Literature: REGULATION (EU) No 345/2013 on Venture capital funds (available at: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2013:115:0001:0017:EN:PDF
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-
Class/Seminar
|
Modality
|
Location
|
Contact hours
|
|---|---|---|
|
On site
|
Auditorium
|
2
|
Topics
|
Steps of raising VC money.
Deal structuring.
Description
Literature: Marija Simic, “INVESTMENT CRITERIA SET BY VENTURE CAPITALISTS”, online at: https://hrcak.srce.hr/file/221353
|
-
Lecture
|
Modality
|
Location
|
Contact hours
|
|---|---|---|
|
On site
|
Auditorium
|
2
|
Topics
|
Intro into IP/KBC and its growing significance.
Description
Literature: 1) What is intellectual property by WIPO? http://www.wipo.int/edocs/pubdocs/en/intproperty/450/wipo_pub_450.pdf
2) Launching a new product: Freedom to operate, via: WIPO, online at: http://www.wipo.int/wipo_magazine/en/2005/05/article_0006.html
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-
Class/Seminar
|
Modality
|
Location
|
Contact hours
|
|---|---|---|
|
On site
|
Auditorium
|
2
|
Topics
|
Intro into IP/KBC and its growing significance.
Description
Literature: 1) What is intellectual property by WIPO? http://www.wipo.int/edocs/pubdocs/en/intproperty/450/wipo_pub_450.pdf
2) Launching a new product: Freedom to operate, via: WIPO, online at: http://www.wipo.int/wipo_magazine/en/2005/05/article_0006.html
|
-
Lecture
|
Modality
|
Location
|
Contact hours
|
|---|---|---|
|
On site
|
Auditorium
|
2
|
Topics
|
Venture capital and KBC – why is it a big deal?
Description
Literature: 1) Joel W. Morhman, “Capitalizing on Intellectual Property. An Introduction to Licensing”, in: The Brief, (Winter 2009), available on: HeinOnline
2) George A. Akerlof, “The Market for “Lemons”: Quality Uncertainty and the Market Mechanism”, in: The Quarterly Journal of Economics, Vol 84. No. 3, August 1970,available on: JSTOR
PLEASE see: Hirschman in the reading list
|
-
Class/Seminar
|
Modality
|
Location
|
Contact hours
|
|---|---|---|
|
On site
|
Auditorium
|
2
|
Topics
|
Venture capital and KBC – why is it a big deal?
Description
Literature: 1) Joel W. Morhman, “Capitalizing on Intellectual Property. An Introduction to Licensing”, in: The Brief, (Winter 2009), available on: HeinOnline
2) George A. Akerlof, “The Market for “Lemons”: Quality Uncertainty and the Market Mechanism”, in: The Quarterly Journal of Economics, Vol 84. No. 3, August 1970,available on: JSTOR
PLEASE see: Hirschman in the reading list
|
-
Lecture
|
Modality
|
Location
|
Contact hours
|
|---|---|---|
|
On site
|
Auditorium
|
2
|
Topics
|
IP-related risks and challenges.
Description
Literature: 1) Joel W. Morhman, “Capitalizing on Intellectual Property. An Introduction to Licensing”, in: The Brief, (Winter 2009), available on: HeinOnline
2) George A. Akerlof, “The Market for “Lemons”: Quality Uncertainty and the Market Mechanism”, in: The Quarterly Journal of Economics, Vol 84. No. 3, August 1970,available on: JSTOR
PLEASE see: Hirschman in the reading list
|
-
Lecture
|
Modality
|
Location
|
Contact hours
|
|---|---|---|
|
On site
|
Auditorium
|
2
|
Topics
|
Types and patterns of IP ownership.
Description
Literature: https://medium.com/@scifantasy/ip-rimer-a-basic-explanation-of-intellectual-property-9be6f0ce6711
|
-
Class/Seminar
|
Modality
|
Location
|
Contact hours
|
|---|---|---|
|
On site
|
Auditorium
|
2
|
Topics
|
Types and patterns of IP ownership.
Description
Literature: https://medium.com/@scifantasy/ip-rimer-a-basic-explanation-of-intellectual-property-9be6f0ce6711
|
-
Class/Seminar
|
Modality
|
Location
|
Contact hours
|
|---|---|---|
|
On site
|
Auditorium
|
2
|
Topics
|
Science behind running a venture-backed company.
Description
Literature: https://medium.com/s/understanding-venture-capital/if-you-take-venture-capital-youre-forcing-your-company-to-exit-fc08fcdb32cc
https://medium.com/s/understanding-venture-capital/unicorns-distract-us-from-a-graveyard-15317a59aa6f
|
-
Class/Seminar
|
Modality
|
Location
|
Contact hours
|
|---|---|---|
|
On site
|
Auditorium
|
2
|
Topics
|
Why valuations matter and how do they come about?
Description
Literature: https://medium.com/ffvc-pov/breaking-down-the-importance-of-early-stage-startup-revenue-projections-8bb91787185
https://medium.com/the-mission/what-founders-need-to-know-you-were-funded-for-a-liquidity-event-start-looking-d55b358d91fc
EU Accounting Rule 6: Intangible Assets, available on: ec.europa.eu, online at: http://ec.europa.eu/budget/library/biblio/documents/management/accountingframework/EU%20Accounting%20Rule%206.pdf
International Accounting Standard 38, Intangible Assets, available on: ex.europa.eu, online at: http://ec.europa.eu/internal_market/accounting/docs/consolidated/ias38_en.pdf
Wagdy M. Abdallah and Athar Murtuza, “Transfer Pricing Strategies of Intangible Assets, E-Commerce and International Taxation of Multinationals”, in: International Tax Journal, Spring 2006, available on: HeinOnline
|
-
Class/Seminar
|
Modality
|
Location
|
Contact hours
|
|---|---|---|
|
On site
|
Auditorium
|
2
|
Topics
|
Why valuations matter and how do they come about? (part 2)
Description
Literature: https://medium.com/ffvc-pov/breaking-down-the-importance-of-early-stage-startup-revenue-projections-8bb91787185
https://medium.com/the-mission/what-founders-need-to-know-you-were-funded-for-a-liquidity-event-start-looking-d55b358d91fc
EU Accounting Rule 6: Intangible Assets, available on: ec.europa.eu, online at: http://ec.europa.eu/budget/library/biblio/documents/management/accountingframework/EU%20Accounting%20Rule%206.pdf
International Accounting Standard 38, Intangible Assets, available on: ex.europa.eu, online at: http://ec.europa.eu/internal_market/accounting/docs/consolidated/ias38_en.pdf
Wagdy M. Abdallah and Athar Murtuza, “Transfer Pricing Strategies of Intangible Assets, E-Commerce and International Taxation of Multinationals”, in: International Tax Journal, Spring 2006, available on: HeinOnline
|
-
Class/Seminar
|
Modality
|
Location
|
Contact hours
|
|---|---|---|
|
On site
|
Auditorium
|
2
|
Topics
|
How do you structure a deal?
Description
Literature: https://medium.com/@ForwardPrt/our-pre-seed-termsheet-5f794bc12e62
supporting agreements via Portal
|
-
Class/Seminar
|
Modality
|
Location
|
Contact hours
|
|---|---|---|
|
On site
|
Auditorium
|
2
|
Topics
|
How do you structure a deal?
Description
Literature: https://medium.com/@ForwardPrt/our-pre-seed-termsheet-5f794bc12e62
supporting agreements via Portal
|
-
Class/Seminar
|
Modality
|
Location
|
Contact hours
|
|---|---|---|
|
On site
|
Auditorium
|
2
|
Topics
|
Founder’s risks, tips and tricks of running a VC backed business.
|
-
Class/Seminar
|
Modality
|
Location
|
Contact hours
|
|---|---|---|
|
On site
|
Auditorium
|
2
|
Topics
|
Case studies and trends (student presentations).
|
-
Class/Seminar
|
Modality
|
Location
|
Contact hours
|
|---|---|---|
|
On site
|
Auditorium
|
2
|
Topics
|
Case studies and trends (student presentations).
|
Total ECTS (Creditpoints):
6.00
Contact hours:
40 Academic Hours
Final Examination:
Exam (Written)
PART-TIME
Part 1
-
Lecture
|
Modality
|
Location
|
Contact hours
|
|---|---|---|
|
On site
|
Auditorium
|
2
|
Topics
|
Introduction into concepts of venture capital (VC), serial entrepreneurship and private equity.
Overview of business types, venture industry and actors involved with a specific focus on venture funds and their functioning logic. General insight into history of private equity, the structure of VC industry, main actors involved and why do we talk about it in the first place.
Description
Literature: Financing Innovative firms through venture capital, pages 1-14, available at: http://www.bei.org/attachments/pj/vencap.pdf
https://medium.com/founder-playbook/the-history-of-silicon-valley-transistors-stanford-and-venture-capital-6a761f171e9d
|
-
Lecture
|
Modality
|
Location
|
Contact hours
|
|---|---|---|
|
On site
|
Auditorium
|
2
|
Topics
|
Types and sources of capital.
Intellectual property as an asset in the VC-related businesses. IP, its forms and strategies for protection, major risks and methods of its monetisation.
Description
Literature: Sources of Financing: Debt and Equity, online at: http://www.usheproduction.com/design/8020/downloads/4a.pdf, pages 466-476
|
-
Class/Seminar
|
Modality
|
Location
|
Contact hours
|
|---|---|---|
|
On site
|
Auditorium
|
2
|
Topics
|
Steps of raising VC money.
Deal structuring.
Description
Literature: Marija Simic, “INVESTMENT CRITERIA SET BY VENTURE CAPITALISTS”, online at: https://hrcak.srce.hr/file/221353
|
-
Lecture
|
Modality
|
Location
|
Contact hours
|
|---|---|---|
|
On site
|
Auditorium
|
2
|
Topics
|
IP-related risks and challenges.
Description
Literature: 1) Joel W. Morhman, “Capitalizing on Intellectual Property. An Introduction to Licensing”, in: The Brief, (Winter 2009), available on: HeinOnline
2) George A. Akerlof, “The Market for “Lemons”: Quality Uncertainty and the Market Mechanism”, in: The Quarterly Journal of Economics, Vol 84. No. 3, August 1970,available on: JSTOR
PLEASE see: Hirschman in the reading list
|
-
Lecture
|
Modality
|
Location
|
Contact hours
|
|---|---|---|
|
On site
|
Auditorium
|
2
|
Topics
|
Types and patterns of IP ownership.
Description
Literature: https://medium.com/@scifantasy/ip-rimer-a-basic-explanation-of-intellectual-property-9be6f0ce6711
|
-
Class/Seminar
|
Modality
|
Location
|
Contact hours
|
|---|---|---|
|
On site
|
Auditorium
|
2
|
Topics
|
Types and patterns of IP ownership.
Description
Literature: https://medium.com/@scifantasy/ip-rimer-a-basic-explanation-of-intellectual-property-9be6f0ce6711
|
-
Class/Seminar
|
Modality
|
Location
|
Contact hours
|
|---|---|---|
|
On site
|
Auditorium
|
2
|
Topics
|
Science behind running a venture-backed company.
Description
Literature: https://medium.com/s/understanding-venture-capital/if-you-take-venture-capital-youre-forcing-your-company-to-exit-fc08fcdb32cc
https://medium.com/s/understanding-venture-capital/unicorns-distract-us-from-a-graveyard-15317a59aa6f
|
-
Class/Seminar
|
Modality
|
Location
|
Contact hours
|
|---|---|---|
|
On site
|
Auditorium
|
2
|
Topics
|
How do you structure a deal?
Description
Literature: https://medium.com/@ForwardPrt/our-pre-seed-termsheet-5f794bc12e62
supporting agreements via Portal
|
-
Class/Seminar
|
Modality
|
Location
|
Contact hours
|
|---|---|---|
|
On site
|
Auditorium
|
2
|
Topics
|
Founder’s risks, tips and tricks of running a VC backed business.
|
-
Class/Seminar
|
Modality
|
Location
|
Contact hours
|
|---|---|---|
|
On site
|
Auditorium
|
2
|
Topics
|
Case studies and trends (student presentations).
|
Total ECTS (Creditpoints):
6.00
Contact hours:
28 Academic Hours
Final Examination:
Exam (Written)
Bibliography
Required Reading
1.
Abdallah, Wagdy M. and Murtuza, Athar. "Transfer Pricing Strategies of Intangible Assets, E-Commerce and International Taxation of Multinationals", in: International Tax Journal. Spring 2006. (Available from: HeinOnline)
2.
Epstein, Richard A., Ben-Shahar, Omri and Masur, Jonathan S. "The Licensing of Intellectual Property", in: The University of Chicago Law Review. Vol. 78, No. 1, Winter 2011. (Available from: JSTOR)
3.
"IP Based Financing of Innovative Firms", in: Enquiries Into Intellectual Property’s Economic Impact. 2015.
4.
Morhman, Joel W. "Capitalizing on Intellectual Property. An Introduction to Licensing", in: The Brief. Winter 2009. (Available from: HeinOnline)
5.
Simic, Marija. Investment criteria set by venture capitalists.
Additional Reading
1.
EU Accounting Rule 6: Intangible Assets. (Available from: ec.europa.eu)
2.
Financing Innovative firms through venture capital, pages 1-14.
3.
Hirschman, Albert O. and Rothschild, Michael. "The Changing Tolerance for Income Inequality in the Course of Economic Development”, in: The Quarterly Journal of Economics, Vol. 87, No. 4, Nov., 1973, pp. 544-566
4.
International Accounting Standard 38, Intangible Assets. (Available from: ex.europa.eu)
5.
Launching a new product: Freedom to operate, via: WIPO.
6.
Regulation (EU) No 345/2013 on Venture capital funds.
7.
Sources of Financing: Debt and Equity. pages 466-476
8.
What is intellectual property by WIPO?
Other Information Sources
1.
IP-rimer: A Basic Explanation of Intellectual Property.
2.
What Founders Need to Know: You Were Funded for a Liquidity Event — Start Looking.
3.
Breaking Down the Importance of Early-Stage Startup Revenue Projections.