AI1133 Financial Systems and Venture Capital 7.5 credits

To provide an understanding of the specifics of venture financing and management it is contrasted with other kinds of business financing. The course has the following content and organisation:

• Technology and knowledge intensive companies properties

- Business categories and stages

- Financial properties and needs

- Financial sources and instruments

• Best Practice Venture Capital methodology – Pre-empting downside risk and setting the stage for optimising upside potentials

- Tools for analysis and decision-making in the handling of downside risks and upside potentials

- Definitions of upside potential, downside risk, entrepreneurial rent

- Specialised contracting, ownership control and leadership

• Best Practice Venture Capital methodology – Strategy analysis and choice

- Tools for analysis and decision-making in the identification of first mover advantages and strategies

- Applied first mover advantage and strategy analysis on classes of ventures and venture stages

• Normative issues regarding start-up valuation, fair deal designs and policy institutions

- Pre-money valuations of start-ups

- Design of fair deals

- Policy institutions in best practice environments

The course aims at providing participants with insights into management of upside potentials and downside risks when investing in ventures, designs of financing and syndication, start-up valuations and fair designs, and tools for due diligence and strategy choice.

Capital Markets and Financial Instruments

• Ohlsson, L., Vinell, L. (1987), Tillväxtens drivkrafter. Industriförbundet. In Swedish.
• Ohlsson, L. (2006), Best Practice Venture Capital. Principles, tools and approaches for investment, strategy and policy. Ibis Förlag.
• Shapiro, C. and H. Varian (1999), Information Rules, A Strategic Guide to the Network Economy. Harvard Business School Press

If the course is discontinued, students may request to be examined during the following two academic years.

• INL1 - Assignments, 4.0 credits, grading scale: A, B, C, D, E, FX, F

Based on recommendation from KTH’s coordinator for disabilities, the examiner will decide how to adapt an examination for students with documented disability.

The examiner may apply another examination format when re-examining individual students.

One written exam (TEN1; 3c)
Two term papers/exercises (INL1 - 2; 2c)

Lennart Ohlsson

Björn Berggren

• All members of a group are responsible for the group's work.
• In any assessment, every student shall honestly disclose any help received and sources used.
• In an oral assessment, every student shall be able to present and answer questions about the entire assignment and solution.