This course illustrates various theories and practices of business financing. In particular, it shows how financial instruments used to finance firms vary with the firm size and its development stage. The course, therefore, is divided into two parts. The first part covers the financing decisions of medium and large firms, that can access the financial markets. The second part focuses on entrepreneurial finance that is relevant for younger and more innovative firms which have limited access to bond and equity public markets. The first part of the course covers firms optimal financing decisions and their cost of capital. It also illustrates the main instruments used by firms to raise capital. The objectives of the first part of the course are the following: 1- to explain the effects of asymmetric information and of the agency costs on the firm's access to credit; 2- to review the main theories of credit rationing, together with an illustration of the existing banking regulation and its effects on the relationship between banks and firms in Italy and in the EURO area; 3- to illustrate how bonds and equities are raised on the capital markets; 4- to illustrate how intermediated credit is granted by the banking system. The second part of the course covers financing decisions of start-ups and of small and medium firms. It also illustrates the financing constraints to innovation and explains the role of different investors and financing instruments specific for firms in an early stage, and during the expansion, growth, and consolidation phases. The objectives of the second part of the course are the following. 1- To provide the student with precise knowledge of the financing cycle of a firm; 2- to illustrate the characteristics of the different financing tools that a firm encounters during its life cycle (business angels, crowdfunding, venture capital); 3- to explain the investment strategies and the instruments used by private equity investors and other institutional investors; 4- to explain the new challenges related to the fintech revolution and of socially responsible finance. The course also includes a review of practical applications and tutorial exercises in class (or at distance, if the emergency due to COVID-19 will persist). Moreover, the course includes some case studies and teamwork that will ask the students to simulate the pitch of a business idea to a group of investors potentially interested in the financing of the new venture.

This course aims to provide the following notions and competencies: 1. The ability to understand the reasons for credit constraints that firms may suffer, also as a consequence of the existing macroeconomic condition and the existing banking regulation; 2. The ability to compute and forecast correctly the cost of capital and the credit and counterparty risk when information on the financial markets is asymmetric; 3. The structuring of IPOs and SEOs, and their costs for firms who want to be listed on the stock market for the first time, or who issue new equity 4. The characteristics and pricing of bonds and bond issuing 5. The characteristics, costs, and benefits of Mergers and Acquisitions, and their financing; 6. To know how a company is valued and how limited partners earn returns; 7. To be aware of alternative sources of financing for start-ups, also depending on their life cycle; 8. To be aware of the structure of the most innovative and popular financing tools. At the end of the course, the student is expected to have acquired the tools to understand why firms may be constrained in their access to credit. Moreover, the student is expected to know how to evaluate the cost of equity and debt financing, as well as the correct valuation of different financing tools for firms, both public and private.

Basics of corporate finance and investment analysis.

The course is divided into two parts. The first part aims to provide the students an in-depth knowledge of the various financing tools that medium and large public companies can use, focusing on the study of the interaction between firms, financial markets, and financial intermediaries. The second part aims to provide the students an in-depth knowledge of start-up financing, and of the problems that small, medium and very young companies have when they require external finance. The main financial constraints to innovation will be explained, as well as the characteristics of investors, and financial instruments specifically oriented to early-stage companies, and firms going through expansion, growth, or consolidation. More precisely, the program is the following. First part: • Firm financing in imperfect markets: the effects of information asymmetries and of moral hazard on firms' debt capacity and limits to external finance; • Credit rationing: main theories, the relation with banking regulation, and a description of the interface between firms and banks; • The possible role of crypto-currencies issued by Central Banks on the credit market; • Equity financing: IPOs e SEOs; • Debt financing: bonds, loans, and securitization (some elements). Second part: • Financial constraints and the financing of innovation • IP backed securities and technology markets • Bootstrapping and bank debt • Crowdfunding: equity, reward-based e donation based • The role of business angels • Venture Capital: what is the role of VD funds in the entrepreneurial world, their legal and fiscal framework, market trends in Europe and in the US, and different kinds of VC funds. • Venture Capitalists' strategies and investment decisions: fundraising, investments, contracts, monitoring activity, exit strategies, and valuation techniques • The FinTech revolution: peer to peer lending e ICOs • ESG financing: some preliminaries

This course is composed of lectures and tutorials. Tutorials aim to explain exercises related to the comprehension of the notions and of the methodology illustrated during the lectures.

First part: 1. Berk, J., e P. DeMarzo, Corporate Finance, IV Global Ed., Pearson Education, Chapters: 16-23-24-30(30.4). 2. Slides and notes distributed by the instructor. Second 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. Slides and notes distributed by the instructor.

Slides; Esercizi; Esercizi risolti;

Modalità di esame: Prova scritta (in aula); Elaborato scritto prodotto in gruppo;

Exam: Written test; Group essay;

... There will be a written exam lasting one hour. The exam is composed of a minimum of 2 up to a maximum of 4 questions on the first part, and of a minimum of 2 up to a maximum of 4 questions on the second part. The final exam aims to (1) evaluate the student’s knowledge and comprehension of the theories illustrated during the lectures and described in the textbooks; (2) verify the student’s ability to solve numerical problems on the various topics illustrated during the course. Therefore, the exam questions can be open ones as well as numerical exercises. The course has been introduced only a couple of years ago and therefore only a limited number of past exams are available. Some examples of exam questions will be offered during the tutorials. During the written test students cannot use any external material, apart from scientific calculators that cannot be programmed and cannot access the internet. In the second part of the course also a group work is scheduled. During this group work, the students are required to pitch a business idea to a group of investors potentially eager to finance the new venture. The maximum students will be able to earn with this group work is 2/30 points. In case of a very limited number of students registered for a particular exam session, the instructors may decide to offer an oral exam.

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.