This course covers intermediate concepts of financial decision making for prospective managers and entrepreneurs taking investment and financial decisions. It also discusses the needs and the functioning of a governance system that prevents abuse by the corporations and its executives and protects shareholders, creditors, employees and other firm stakeholders. The course is divided into two parts. The first part is devoted to a comprehensive view of the providers of finance for entrepreneurial ventures, ranging from business angels, crowdfunding, to venture capital and private equity investors. The course will devote some attention to the recent fintech revolution that is changing the entrepreneurial finance landscape. The second part of the course will present advanced material in corporate finance theory, such as financing decisions in imperfect markets, investment analysis under uncertainty and fundamentals of corporate governance, such as the design of appropriate managerial incentives and takeovers.

The specific learning outcomes of the course are the following ones: 1. to learn how to evaluate a company, and how to generate a return for limited partners 2. to understand alternative sources of finance for start-ups, depending on the stage of development of the business 3. to understand the functioning of the most established financial alternatives, such as bank finance, venture capital, private equity, secondary markets 4. to provide the theoretical and operational concepts necessary in order to compute the cost of financing in imperfect capital markets and to take an investment decision under uncertainty 5. to understand the functioning and the cost of structural financial decisions such as IPOs and acquisitions 6. to provide an in-depth knowledge of the incentive packages paid to executives and their impact on corporate decisions 7. to illustrate how the control of corporation is contested in the financial markets, and the consequences of this mechanism for the governance of firms At the end of the course, the student will have acquired the methodological and theoretical competences to evaluate the financing and investment opportunities of the firm, the main financial operations on the public markets, and the ways to control the inherent conflicts of interests internal to corporations.

Concepts developed in the course “Accounting and Corporate Finance”

The first part of the course offers a comprehensive view of the providers of finance for entrepreneurial ventures. The course is covering why Venture Capital and Private Equity investors are better equipped to provide finance to such companies than traditional providers, such as banks. The course will consider alternative sources of finance, depending on the stage of development of the business and will discuss how in recent years the fintech revolution is shaping entrepreneurial finance and allowing companies to raise money in innovative ways. For each topic, theoretical argumentations will be covered, but also recent trends and figures will be analysed and real cases will be discussed. The second part of the course will address both financing and investment decisions of the firm, and explain why corporate governance matters for managing firms. This second part starts presenting the methods of firm financing in presence of transaction costs, agency costs and asymmetric information. Then it covers real options techniques for the firm investment decisions under uncertainty. Finally, it shows the importance of governance systems, which are based on internal and external control mechanisms. The main governance tools, such as the design of top-management compensation, the role of active shareholders and of the Board of Directors, are covered. This part concludes illustrating the functioning of the market for corporate control.

The lectures will be “interactive” in that the instructor will periodically ask students to pause the presentation and make classroom exercises on the different modules taught.

First part: 1. Bootstraping and debt finance 2. An overview of Private Equity and Venture Capital: the role of PE and VC in the entrepreneurial finance ecosystem, history, legal and fiscal frameworks, market trends and figures, in Europe and in the USA 3. Venture Capital financing: the VC cycle, fundraising, investing, contracting, monitoring, exiting 4. Venture Capital valuation techniques 5. Later stage Private Equity 6. Other equity investors: corporate venture capital investors, governmental and bank-affiliated venture capital investors, university-affiliated venture capital investors 7. Business angels 8. Fintech revolution: crowdfunding, peer to peer lending and ICOs Second part: 1. Financing decisions of the firm in frictionless markets 2. Financing decisions of the firm in imperfect markets: bankruptcy costs, agency costs of debt and agency costs of equity, firm financing under asymmetric information 3. Raising equity: IPOs and SEOs 4. Investment decisions of the firm: internal investment using the real options approach 5. Investment decisions of the firm: external investment through M&As 6. Corporate Governance: definitions and why do we need a governance system 7. Internal governance mechanisms: managerial compensation, ownership structure and the role of the Board of Directors 8. External governance mechanisms: takeovers and the market for corporate control

First part: 1. Metrick A., Yasuda A. Venture Capital and the Finance of Innovation, Wiley (2010) 2. Prahl M., White B., Zeisberger C. Transformation via Private Equity, Venture Capital, Minority investments and Buyout, Wiley (2017) 3. Course slides and supplementary readings Second part: 4. Berk, J., and P. DeMarzo, Corporate Finance, IV Global Ed., Pearson Education, Selected Chapters: 14-15-16-22-23-28. 5. Copeland,T. E., J. F. Weston and K. Shastri, Financial Theory and Corporate Policy, Pearson Education, Selected Chapters: 9-18 6. Larcker, D., and B. Tayan, Corporate Governance Matters, II Ed., Pearson Education, Selected Chapters: 3-4-5-7-8-9-11-12 7. Slides Integration

Modalità di esame: Prova scritta (in aula);

Exam: Written test;

... The exam is based on a written test of 2 hours.

Gli studenti e le studentesse con disabilità o con Disturbi Specifici di Apprendimento (DSA), oltre alla segnalazione tramite procedura informatizzata, sono invitati a comunicare anche direttamente al/la docente titolare dell'insegnamento, con un preavviso non inferiore ad una settimana dall'avvio della sessione d'esame, gli strumenti compensativi concordati con l'Unità Special Needs, al fine di permettere al/la docente la declinazione più idonea in riferimento alla specifica tipologia di esame.