Financial decision making in and around technology ventures

New technology ventures and early-stage tech investors are faced with financial decision-making processes that are fundamentally different from those of conventional, established firms. In this course you will develop a solid understanding of key issues related to financial decision making in and around new technology ventures.

You will become familiar with the valuation of emerging technology (R&D) and business opportunities, as well as the funding process of new technology-based ventures, including the venture capital industry. You will understand the financial decision-making processes from the perspectives of investors, entrepreneurs, and scholars – including the role of decision criteria on, for example, the technology, sustainability, competition, and the founding team.

Furthermore, you will develop the analytical skills and tools to perform basic valuations of emerging technologies and ventures - along with more sophisticated approaches that incorporate decision trees, real options analysis, and game theory to account for the high levels of uncertainty in the technology commercialization process.

As such you will be able to analyze and evaluate practical situations such as investment decisions from multiple angles, including sustainability aspects. By developing the knowledge and skills to deal with uncertainty in the financial evaluation of strategic alternatives, this course thus enables you to become a better strategic decision-maker in innovation and technology commercialization.

In addition to weekly in-class lectures, you will get to attend guest lectures from experienced investors and finance professionals. As part of group assignment 1, you will prepare and give a mini-lecture, where you will explain theoretical insights on financial decision-making processes in and around technology ventures. As part of group assignment 2, you will thoroughly analyze a business/investment case. And finally, we work towards enabling you to put your newly developed knowledge and skills to practice during a fieldtrip to a venture investment fund, to evaluate a real-life tech investment opportunity under the supervision of renown investors.

At the end of the course you will master the unique aspects of technology venture investments, leading to better substantiated investment decisions.

The aim of this course is to provide you with a solid understanding of key issues related to investments and financial decision making in and around new technology ventures.

After this course, the student will be able to:

1. Apply key concepts related to technology investment decisions of tech entrepreneurs and investors
2. Apply key concepts related to the valuation of new technology and technology ventures
3. Explain dynamics between entrepreneurs and private equity investors (e.g. VC’s and business angels)
4. Apply investment criteria including sustainability, competition, customers, competitors, and the entrepreneurial team
5. Apply basic analyses related to the financing and valuation of new technology and technology ventures
6. Apply basic (real) options analysis and game theory to evaluate technology investment decisions and strategic alternatives
7. Evaluate practical investment situations and come to a justified investment recommendation
8. Apply relevant scientific literature and theoretical insights

You must meet one of the following collections of requirements

• Collection 1
• Completed Final examination Bsc program
• Collection 2
• Completed Pre-Master

• Metrick,A. and A. Yasuda, 2021, Venture Capital & the Finance of Innovation, New York: John Wiley & Sons, 3rd edition (also available as ebook via Wiley) (ISBN 978-1-119-49437-9)
• Lecture slides (incl. guest lectures)
• Selected academic articles