Course: ENT395
Instructor: Shahram Hejazi
F 2019

Description of Course Goals and Curriculum

This class is great for introducing basic venture capital concepts including how to invest money in startups, different types of fundraising, how to assess risks, how to create a Profit & Loss statement and milestone plan, and understanding valuations and term sheets. You will be able to learn about venture capital from both the startup fundraising side and also the VC firm investment side. The class helps you think about what the right type and amount of investment is for a business. Overall, Shahram makes the class particularly interesting because he introduces you to many real life venture capitalists from extremely successful VC firms who talk about their different strategies for investment and also startup leaders who can talk about their methods for fundraising. You should take this class if you want to know what it takes to become a venture capitalist or if you are interested in knowing how to raise money for a startup.

Learning From Classroom Instruction

There is one 3 hour seminar on Friday afternoons, which can be a bit long to stay through sometimes. However, half of each lecture is a guest speaker and is usually very interesting. Speakers I had were from Andreesen Horowitz, Bain Capital, 645 Ventures, NEA, Susquehanna, and more. You get to hear about different investment thesis at each of the VC firms along with their portfolios and any tips or big investment misses and failures that each speaker has. The best part is the diversity in venture firms represented by the speakers brought in by Hejazi -- there are speakers hailing from old, established, giant firms who invest mostly on experience, instinct, and connections while there are are also newer avante garde firms like 645 ventures that brings in AI technology as part of their investment strategy. As part of the class lectures, you get to evaluate the strategies that the venture firms use and what’s good and bad about each.

Despite the seminars being very long, Hejazi gives everyone a 10 minute break after each speaker finishes. And during this time, you can go and talk with the speakers for a bit if they are someone you want to make a connection with or simply ask questions. Usually, I took notes on anything interesting that the speaker said during lecture but there is no pressure at all to memorize all details about their presentation. It’s largely about taking what you want from them.

The second half of each seminar is dedicated to Hejazi lecturing about important concepts. About half of the lectures take you through the financial knowledge needed to understand valuations, term sheets and calculating Profit & Loss statements. The lectures are all posted on BlackBoard so don’t feel the need to memorize everything or write everything down. It helps to understand the flow and concepts behind each lecture and then you can review the equations and details later, which are all very basic. No big math knowledge is needed at all to understand the financials. The rest of the lectures focus on topics like building a venture firm, coming up with an investment thesis, and assessing market and risk. As the semester goes on, you’re able to have a better understanding of speaker presentations because you have the knowledge from Hejazi’s lectures.

Learning For and From Assignments

One to two Harvard Business School cases are assigned each week as assignments to read before lecture and the cases usually are discussed shortly during Hejazi’s lecture or just supplement your understanding conceptually. The cases do not take very long to read, so try to do them all before lecture in case part of the discussion includes material from them. The other assignment you have weekly is meeting with an assigned team to pick one of three startups that you would “invest” in and be prepared to answer Hejazi in class about why you chose that startup and not the other ones. Usually, around 15 minutes of lecture time will be dedicated to discussing the three startups for the week. Your participation is noted by the TA so go to class with a decision in mind and having done some research. The most important thing for the startup evaluations is to bring in concepts from class about risk evaluation and being able to argue what you would put the money toward in a particular investment.

The midterm is a team presentation. You will come up with an investment fund and investment thesis and present to the class in 10 minutes. Some teams dressed up to look super professional for their part, which you can choose to do but it’s not absolutely necessary for a good grade. Just look put together and focus on having key metrics and financial benchmarks in your presentation that make sense. Really try to make your fund unique and different from any of the speakers that came to class but be able to back up your thinking on how your fund will make investments, source, and have good real life example startups to show that you can make real investments. It matters less what kind of fund you come with as long as you can show your logic and able able to answer the questions that Hejazi asks you.

The final is similar but this time you are presenting on a particular startup that you would invest in. Hejazi expects you to have talked to someone at the startup, so make sure to contact at least 10 startups a month before the final to allow people to get back to you. Unless you have connections to a particular startup that you want to present on, it takes a bit of effort to find a good startup that responds to you. Again, just make sure to be able to back up your presentation with logic on why you would make an investment, what the risks are, and what you would put your money toward. It matters less what the exact startup is and more about your thinking behind your choice.

The assignments overall in this class are super low-demand but the midterm and final take some extra time to work on. Make sure to allow like 1 hour per a week for regular assignments and allow for like 6-8 hours to make the midterm and final presentations and practice. It’s super important to contact startups early for the final if you don’t know any personally.


External Resources

I didn’t need outside resources to do well in the class. Just buy the Harvard Business School case studies packet at the beginning and you will be all set. Also if you happen to have any personally connections at successful startups, that will come in handy later for the final project.

What Students Should Know About This Course For Purposes Of Course Selection

I took this class without much previous academic knowledge about entrepreneurship. I did work at a tech startup for 6 months so some of the concepts and terms from class I had heard before. If you come into this class knowing absolutely nothing about startups and entrepreneurship, you might have a hard time understanding the speakers and Hejazi’s lecture especially at first because there’s a lot of lingo that’s used. If you really want to take this class without previous experience or knowledge, I suggest doing research on venture capital and startups before starting the semester. It is doable however, and I would definitely suggest taking the class to anyone interested. The workload is very light during the semester so it’s not hard to spend time familiarizing yourself with concepts outside of class. The financials talked about in this class are understandable at a basic level, so taking econ classes is helpful but absolutely not needed to do well.
Venture Capital and Finance of Innovation

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