This course will use the case method to study entrepreneurial finance and, more broadly, private equity finance. The course is motivated by increases in both the supply of and demand for private equity. On the supply side, the amount of private equity under management -- by partnerships investing in venture capital, leveraged buyouts, distressed companies, real estate, etc. -- has increased from under $5 billion in 1980 to over $200 now. Private equity funding is likely to continue to be robust in the near future as pension funds and other institutions continue to diversify their portfolios. On the demand side, an increasing number of MBAs and others are interested in managing their own businesses. The supply and demand for funds are also growing outside of the U.S., albeit although they begin from a much smaller base.
The primary objective of the course is to provide an understanding of the concepts and institutions involved in entrepreneurial finance and private equity markets. To do this, I have purposely designed the course to be broad and comprehensive. We will explore private equity from a number of perspectives, beginning with the entrepreneur / issuer, moving to the private equity partnership, and finishing with investors in private equity partnerships.
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35903 - Theory of Financial Decision Making III
Teaching shared with Douglas Diamond.
This course is a topic course intended for Ph.D. students or highly motivated and trained MBA students. For each of the topics covered I will provide a guide to the most recent literature both theoretical and empirical, as well as a discussion of the future opportunities for research in this area.
Prerequisites: Students are expected to have a prior knowledge of corporate finance at least at the level of BUS 35902. Students without such a background are strongly encouraged to audit the BUS 35902 course in the Winter and I will be happy to suggest additional readings.