Entrepreneurial Finance

Concepts and Cases

Miranda S. Lam, Gina Vega

• Publisher: Routledge
• Year: 2020
• Print ISBN:
  9780367343316
  9780367343309
• Edition: 2
• eBook ISBN:
  9781000205978
• Topic: Business
• Subtopic: Business General
• Index: Business

An accessible guide to an increasingly complex subject, Entrepreneurial Finance: Concepts and Cases demonstrates how to address often- overlooked financial issues from the entrepreneur's standpoint, including challenges faced by start-ups and small businesses.

This new edition retains the original's structure, around seven modules or building blocks designed to be taught across a full semester with natural break points built into each chapter within the modules. The building blocks present macro- concepts which are explored in greater detail in each of the chapters. Each concept is illustrated by a short case and followed by thoughtful questions to enhance learning. The cases are new or fully updated for the second edition, and deal with real companies, real problems, and currently unfolding issues. A new chapter on business models includes coverage of social ventures, and the chapters on forms of business ownership and financing have been expanded.

Upper- level undergraduate students of entrepreneurship will appreciate the book's practical approach and engaging tone, along with the hands- on cases and exercises that help students to break down complex concepts.

Online resources for instructors include a case teaching manual, lecture slides, test bank, and interactive exercises.

Module 1

Getting Started with Cases

1 Case Preparation and Analysis for Students

Learning Objectives

•Prepare for working with cases

•Become aware of course expectations

•Identify skills and techniques for case analysis

Why Are You in This Class?

Perhaps you are concentrating on Entrepreneurship or Small Business Management. Perhaps you are a Finance major who is taking this class as an elective. Maybe you are a business major who wants to learn a bit more about entrepreneurship and finance. Maybe the class was the only one open that fit into your schedule.

None of that matters. What does matter is your willingness to participate in your own learning, rather than wait for someone to tell you what to learn.

What to Expect from a Case-Based Class?

If you are used to a traditional lecture format class, a case class will be a big change for you.

In a traditional class, you are the recipient of knowledge. The instructor is the giver of knowledge, and you receive her words of wisdom passively.

In a case class, you are the creator of knowledge and the discoverer of insights. The instructor is your guide and your facilitator, and she shares in the creation and discovery processes with you.

In a traditional class, the instructor works hard and you sit quietly. You can send in a tape recorder and listen to the lecture later. You can watch a video and play computer games. You can check your email. You can update your Facebook account.

In a case class, you both work hard and are very much present. You are alert the whole time, because you are responsible for your learning and the learning processes of your classmates. Case learning is social learning and requires active involvement.

Here’s how it works:

•You read the assigned case ahead of class. You might consider trying the Three Reads Model in Appendix 1.1.

•Take notes as to the individuals involved, the situations presented, and any connections you can make to theory or analogous characters or situations you have been exposed to before, either in classes or in your work or life experience.

•Identify your assumptions and the information that is missing for you to do a thorough analysis.

•List the problems and select one problem to focus on at a time. Most cases present multiple problems; your ability to identify a key problem will give your case analysis structure and meaning.

•Do any preliminary analysis you can, such as financial comparisons and ratios, statistical analyses, or other quantitative explorations. If your analysis is to be qualitative, determine the foundation of your analysis and articulate reasons for and against a strategy or position.

•Write down as many possible recommendations as you can, then select one and commit to it.

•Go to class and get ready for an engaged discussion.

•The instructor may start off with a précis of the case (or ask you to provide one) and then toss out some icebreaker questions –easy questions to get the conversation moving.

•The instructor may continue to toss questions to the group or, depending on personal style, may ask questions or opinions directly of one individual.

•The instructor will tease out a series of analyses, decision-making perspectives, and positions from the class members.

•The class reaches a conclusion, recommendation, decision, or final analysis.

•You may be assigned to a team.

•If you have been assigned to a case team before the classroom discussion, your preparation should take place with this team.

•You can expect a lot of lively discussion during the preparation phase, and you will generally (but not always) come to agreement before class.

•The class discussion will be between team positions rather than individual positions and will proceed as above.

Hints for Success in a Case Class

•Be prepared

•Participate actively

•Allow your emotions to become involved along with your critical analysis

•Respect your peers’ input

•Try to understand the alternative perspectives put forth in the classroom

•If on a team, be a “good” team member – no one likes a free rider

Two Different Types of Cases

There are two different kinds of cases: decision-based cases and descriptive or illustrative cases. Table 1.1 differentiates between decision-based and illustrative/descriptive cases.

Table 1.1 Types of Cases

Decision-Based Cases		Descriptive or Illustrative Cases
Description	Decision-based cases will require you to make a reasoned recommendation, supported by facts and theory, for the case protagonist to follow.	Descriptive or illustrative cases do not conclude with a call for a recommendation. Instead, they present a situation that has occurred and your job is to analyze the protagonist’s actions.
Example	Your recommendation might be for the protagonist to seek alternative sources of funding rather than depending on friends and family. Some sources he might consider include a bank line of credit, loans, or angel investors. These three sources involve less emotional investment and more straightforward financial analysis to convince lenders.	You may determine that he should have taken a different set of action steps that might have led to a better outcome. Or you may decide that the actions taken were justified and provided the best outcomes under the existing circumstances. Or, your recommendation might be to take advantage of a favorable economy to expand now rather than waiting until the company has accumulated more assets. Even though the protagonist tends to be conservative in his approach to expansion, it makes sense to e...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• Case Contributors
• Foreword
• Preface
• MODULE 1 Getting Started with Cases
• MODULE 2 Getting Money and Getting Going
• MODULE 3 Measuring Performance in the Short Term
• MODULE 4 The Mechanics of Finance
• MODULE 5 Measuring Performance in the Long Term
• MODULE 6 Exit Strategies
• MODULE 7 A Winning Approach
• Glossary
• Index