港中大MBA创业金融讲义AEntrepreneurStartup.pptVIP

ENTREPRENEURIAL FINANCE – AN INTRODUCTION What is an entrepreneur? French origin:”Undertaker” 1700s: “bearer or undertaker of risk, particularly with respect to provision of capital 1800s: “a person who seeks to shift economic resources from areas of low to high productivity” What is an entrepreneur 1930s: “Driver of economic progress, continuously seeking to disturb the status quo in a quest for profits from deliberate and risky efforts to combine society’s resources in valuable ways that are not yet perceived by others” Most recent thought: “individuals who create something new, something different; they change or transmute values.” What is an entrepreneur “Pursuit of opportunities to combine and re-deploy resources, without regard to current ownership or control of resources.” A Multi-step Process 1. Opportunity – value 2. Formulating strategy 3. Implementation 4. Harvesting A Multi-step Process Successful innovation =/= reward Strategic choices + implementation Common view of venture capitalists: good ideas are easy to find but people who can implement the ideas are hard to find Cases of POEs failure – poor financial management! Financial Decision Making Guiding principles: (a) more of a good is preferred to less (b) present wealth is preferred to future wealth (c) safe assets are preferred to risky assets 2 Distinct Kinds of Decisions Investment Decision - Acquire assets that are worth more than they cost. - Value of the investment depends on its ability to generate cash flows for the investors in the future and on the riskiness of those cash flows 2 Distinct Kinds of Decisions Financing decisions - most desirable way to structure the ownership or finance the acquisition Entrepreneurial Decisions Financial, management, strategy, marketing paradigm Tools of finance – powerful and can contribute significantly to the value of new ventures (Again, think about those failed POEs) Entrepreneurial Finance vs Corporate Finance Interdepend