FIN 374S: Entrepreneurial Finance

Fall 2016

Course Information Instructor Information

Time: M & W 8-9:15, 9:30-10:45 Instructor: Regina W. Hughes
Location: Office: CBA 2.222
BBA Upper Division Office Hrs: M & W 11-12 noon
Phone: 512-471-4764 (not for messages)
E-mail: [email protected]
TA: Justin Bosworth Hours: TBA

I. Introduction
Entrepreneurial Finance is worthy of special study. After mastering the basic principles of
Corporate Finance (Fin 357 for us) we can now discern between the concerns of investors and
financial analyst of large public corporations. Investors and analyst use evaluation models that
sometimes differ from the focus on smaller issues that dramatically affect the early-stage
entrepreneur or new venture. You will employ the concepts and tools of finance with a special
focus, such as thinking about investment opportunities as portfolios of real options- while they are
particularly useful in a new venture setting, are also useful in the context of large public
corporations. Entrepreneurial Finance and Private Equity are two sides of a similar coin. The goal
of this course is to familiarize you with the new venture or entrepreneurial process of analyzing
problems, weighing alternative actions, and choosing the best possible solution(s) to enhance
wealth. The course is designed to model the new venture workplace and prepare you for a job as a
future analyst of this type of investment opportunity. Private Equity firms greatly value the
concepts and practices mastered throughout this course. Much of the educational process in this
class takes place outside of the classroom; learning by doing gives us all a better understanding of
this field. The academic description is “experiential learning”.

II. Goals
The primary goal of the course is to enhance your analytical and problem solving abilities.
Through a combination of readings, lectures, class discussions, guest speakers and milestone
presentations students should: (a) improve their speaking and business writing skills, (b) gain
exposure to issues frequently encountered by business decision makers, (c) develop personal and
professional skills valued by employers (e.g., time management, planning, collaboration,
responsibility, and integrity), and d) discover that success in the workplace requires a combination
of quantitative and qualitative skills.

III. Classroom Expectations

Active attendance, participation, and preparation are required, as some of our classroom activities
are devoted to milestone presentations of our entrepreneurial ventures. Students are expected to
attend every class, prepare every assignment, and participate in every class discussion. Specific
information will be furnished for your Milestone Presentations. The EP10 research tool will
provide great value to your own assessments and your work in our class.

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IV. Course Materials (Required)
1. Entrepreneurial Finance 2011 Stanford University Press by Janet Smith and Richard Smith
ISBN 978-0-804707091-0 (available online) or available free of charge through the UT
Library system as an online textbook.
2. Additional case material- EP 10 Research Assessment, $12, must be purchased by 9/1/16 @
gallupstrengthscenter.com

V. Grade Computation
2 Exams @ 23% each 46%
Milestone assignments and presentations 1-6 @ 4% each 24%
Milestone 7 and presentation 6%
Final Pitch & Notebook 10%
Attendance @ .5% each on days
marked by “A” on the schedule 10%
EP10 2%
Peer Evaluation 2%
Final letter grades will be assigned according to the following criteria:
A >93 A- 90-92.9 B+ 87-89.9 B 83-86.9 B- 80-82.9 C+ 77-79.9 C 73-76.9 C- 70-72.9, etc.
You will receive a numeric score for each assignment. Final grades will not be determined until
the scores for all assignments are entered, as indicated above. Final course grades may reflect the
application of a small curve. The target GPA for the course is approximately 3.40. All course
grades are final, except in the instance of a recording error.
Assignments that are submitted on a timely basis will be returned approximately two weeks after
its submission. If you have a question about any grade assigned, you must submit the question in
writing, within one week after the assignment is returned. Your inquiry should include your name,
UT EID, the title of the assignment, and a written explanation of why you think the grade is
incorrect. A reasonable discussion does not start with “my buddy got a higher grade”. I retain the
right to raise or lower grades after review. Please do not come up after class to discuss your
individual grade.

VI. Exams
Exams will be essay. Exam I is an in-class assignment, Exam II is a take-home assignment. Exam
questions will come from both class lecture/discussion, assigned readings and other materials. No
laptops, cellphones or other electronic devices will be allowed during the exam. During exams,
you may not leave the room until you are finished (i.e., if you leave the room before the end of the
exam period you will not be allowed to re-enter). Note: If you need disability accommodation for
an exam, you must comply with the requirements outlined in the “Students with Disabilities”
section below. Exam II will be posted to Canvas and the Turn-it-In Scholastic Honesty Checker.

I do not give makeup exams (subject to applicable University policy). If you miss Exam I, the
percentage weight of that exam will be applied to Exam II, subject to a 25-point penalty. So, for
example, if you miss Exam I, and you make an 85 on Exam II, then your Exam II grade will be 85
and the replacement grade will be 60, (85-25). If you miss Exam II, then the grade you made on
Exam I minus 30 points will be your Exam II grade. There is no guaranteed curve, so do not
plan for one, and do not ask for extra credit.

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VII. Milestone Assignments
All students are expected to participate in the Milestones Project. Instructions are included on
Canvas. The assignments are divided into seven separate Milestones each clearly explained with
content and presentation requirements. Milestones 1 and 2 will be assigned and submitted on
Canvas before the class has been identified with team assignments. Milestones three through
seven will be completed by designated group however, each student will be responsible for
posting his or her own portion of the assignment onto Canvas and for bringing a copy of it to
class. Milestones one through seven each count 4% of each student’s grade, equally divided by
oral and written contribution. If you are absent the day your group presents any milestone
assignment, your oral portion of your grade will be “zero”. The class will be organized into teams
of approximately four to five students each, depending on class size. Groups are formed from the
results of your EP10 Research Assessment. All group members must be a part of Milestone
presentations 1-7. This rule does not apply to the team’s Final Pitch.

Milestone Seven is the Financial Plan. Development and presentation of Milestone Seven will
be worth 6% of your overall grade. It will also be an integral part of your Final Pitch, worth
10% of your overall grade. The Final Pitch Assignment will develop from the first seven
Milestone assignments. A notebook of all milestone assessments will be due on Final Pitch Day
and becomes a part of that grade. Presentations will be made in a competitive environment with
outside investors critiquing and giving feedback to each team. Expect this final portion of your
grade to be the most challenging. Be prepared to seek investment.

VIII. Class Attendance/Participation/Preparation (A/P/P)

This is a discussion-based and team-based course and students learn as much or more from
interacting with each other than from the formal presentations by the instructor. When all students
attend every class it is easier to develop a culture and atmosphere conducive to sharing
experiences and discussing opinions. Formal attendance will be taken each class, and you are
expected to participate actively in discussions and class exercises. You will be expected to be able
to answer questions and ask relevant and thoughtful questions. Come to class prepared.

View class attendance as if you are being paid. Certain class days, 27 in total, are marked by an
“A” on your semester schedule; plan to attend. You will receive .5 points for each of those days,
maximum 20, that you attend. This gives a maximum of 10 total points to your final grade. The
ONLY time an absence can be exempt from this policy is for observance of a religious holy day
(see University policies below) or in the case of exigent circumstances. The EP10 Assessment and
the Peer Review are each worth 2% points when completed as directed.

IX. Other Grading Criteria

The primary basis for grading written assignments is content; however, professionalism in
presentation is also given substantial weight. The writing skills component of the analysis
considers grammar, spelling, punctuation, appropriateness, clarity, and thought. The following
book is recommended for aiding in the preparation of written work: Strunk, William, Jr. and E.B.
White, “The Elements of Style,” Macmillan. Anyone who needs additional assistance in mastering
basic writing skills can receive help through the Undergraduate Writing Center in the Flawn
Academic Center, Room 211, or by calling 471-6222. The website for the Writing Center is
http://www.uwc.fac.utexas.edu/

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X. Additional Policies
A. Students with Disabilities – Students with disabilities may request appropriate academic
accommodations from the Division of Diversity and Community Engagement, Services for
Students with Disabilities, 512-471-6259, http://www.utexas.edu/diversity/ddce/ssd/.

B. Access to Canvas – All students must have access to the Canvas web site for this course. I will
use this venue to post class notes, assignments, announcements, and grades. I will also use the E-
mail feature of Canvas to correspond with you. Check the site (and your E-mail) regularly to
ensure that you have the most current information. Please note the following:
Web-based, password-protected class sites will be available for all accredited courses taught at
The University. Syllabi, handouts, assignments and other resources are types of information that
may be available within these sites. Site activities could include exchanging e-mail, engaging in
class discussions and chats, and exchanging files. In addition, class e-mail rosters will be a
component of the sites. Students who do not want their names included in these electronic class
rosters must restrict their directory information in the Office of the Registrar, Main Building,
Room 1. For information on restricting directory information see:
http://www.utexas.edu/student/registrar/catalogs/gi02-03/app/appc09.html

C. Computers and Electronic Devices – In accordance with Finance Department policy, the use
of laptop and tablet computers are prohibited, except for making class presentations. All electronic
devices (cell phones, MP3s, etc.) should be stowed away during the class session. Violation of
these policies, including texting during class, will reduce your A/P/P grade.

XI. Additional Comments

The requirements and recommendations for succeeding in this course are outlined in this syllabus.
Since no extra-credit is available, I encourage you to follow these policies and utilize office hours
to maximize your understanding of the assignments and their specific requirements. The
aforementioned policies provide the basic guidelines and code of conduct for this course. They are
designed to reduce confusion and establish an equitable framework for the entire class. As a matter
of principle, I will enforce these policies equitably. The “spirit” of the course is just as important
as the “rules and regulations.” My goal is to create a cooperative classroom environment in which
we learn from each other. To that end, I welcome your constructive comments and suggestions as
we progress through the course. Your feedback is an important element of course delivery and
development. The academic term is “experiential”.

Barring an emergency, I will be available during office hours and at additional times. I
encourage you to visit with me regarding the class assignments, concerns with the course, or
just to say “hello.” I am also accessible via telephone or E-mail. I will make every effort to
return your call or respond to your E-mail within one business day of its receipt.

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Religious Holy Days

By UT Austin policy, you must notify me of your pending absence at least fourteen days prior to the date of observance of a religious
holy day. If you must miss a class, an examination, a work assignment, or a project in order to observe a religious holy day, you will
be given an opportunity to complete the missed work within a reasonable time after the absence.

Policy on Scholastic Dishonesty

The McCombs School of Business has no tolerance for acts of scholastic dishonesty. The responsibilities of both students and
faculty with regard to scholastic dishonesty are described in detail in the BBA Program’s Statement on Scholastic Dishonesty at
http://www.mccombs.utexas.edu/BBA/Code-of-Ethics.aspx. By teaching this course, I have agreed to observe all faculty
responsibilities described in that document. By enrolling in this class, you have agreed to observe all student responsibilities
described in that document. If the application of the Statement on Scholastic Dishonesty to this class or its assignments is unclear in
any way, it is your responsibility to ask me for clarification. Students who violate University rules on scholastic dishonesty are
subject to disciplinary penalties, including the possibility of failure in the course and/or dismissal from the University. Since
dishonesty harms the individual, all students, the integrity of the University, and the value of our academic brand, policies on
scholastic dishonesty will be strictly enforced. You should refer to the Student Judicial Services website at
http://deanofstudents.utexas.edu/sjs/ to access the official University policies and procedures on scholastic dishonesty as well as
further elaboration on what constitutes scholastic dishonesty.

Campus Safety

Please note the following recommendations regarding emergency evacuation, provided by the Office of Campus Safety and
Security, 512-471-5767, http://www.utexas.edu/safety:
• Occupants of buildings on The University of Texas at Austin campus are required to evacuate buildings when a fire alarm
is activated. Alarm activation or announcement requires exiting and assembling outside.
• Familiarize yourself with all exit doors of each classroom and building you may occupy. Remember that the nearest exit
door may not be the one you used when entering the building.
• Students requiring assistance in evacuation should inform the instructor in writing during the first week of class.
• In the event of an evacuation, follow the instruction of faculty or class instructors.
• Do not re-enter a building unless given instructions by the following: Austin Fire Department, The University of Texas at
Austin Police Department, or Fire Prevention Services office.
• Behavior Concerns Advice Line (BCAL): 512-232-5050
• Further information regarding emergency evacuation routes and emergency procedures can be found at:
http://www.utexas.edu/emergency.

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