Entrepreneurial Finance Venture Capital

Learn the VC Term Sheet´s key sections: valuation, vesting, participating preferred equity and antidilution provisions

Last updated 2022-01-10 | 3.6

- VC Valuation Model
- VC Investment Decision-Making Process
- Key Sections of the VC Term Sheets

What you'll learn

VC Valuation Model
VC Investment Decision-Making Process
Key Sections of the VC Term Sheets
Vesting
Participating Preferred Equity
Antidilution Provisions

* Requirements

* Basic use of spreadsheets

Description

*** All the Excel files used on the videos are available in the resources section of the respective lessons***

Welcome to the Venture Capital course, where you will learn to evaluate the different sections of the term sheets. My name is Carlos Martínez, I have a Ph.D. in Management from the University of St. Gallen. During my doctoral studies, I delved into access to entrepreneurial financing in contexts with institutional voids, research that I presented at some of the most prestigious academic conferences and doctoral colloquiums held at the University of Tel-Aviv (Israel), Politecnico di Milano ( Italy), University of Halmstad (Sweden) and MIT (USA), and which was also partially published as a chapter of the book "New Frontiers in Entrepreneurial Finance Research," co-edited by established Professors in the Entrepreneurial Finance literature.

I designed this course for potential entrepreneurs, and university students interested in pursuing a career in Venture capital funds. At the end of this course, you will understand the Venture Capitalists' investment decision-making process and be able to evaluate the different sections of a term sheet: the valuation, vesting, convertible preferred equity, and anti-dilution provisions.

The course has a practical approach and uses the teaching case method. First, we will review the VC decision making process. Secondly, you will learn the VC valuation model. After that, you will take the role of one of the entrepreneurs and evaluate different scenarios according to the vesting clauses. Then, you will estimate different investment vehicles such as simple and participating convertible preferred stocks under different exit values. Finally, we will illustrate the full ratchet and weighted average anti-dilution provisions. In addition to the video sessions, you will have access to all the Excel files that we will develop in the course.

The ideal students of this course are early-stage entrepreneurs interested in getting funding to scale, and young professionals pursuing careers in early-stage financing. The only requirement is a basic use of spreadsheets.

Feel free to take a look at the course description and I am looking forward to seeing you soon!

Who this course is for:

  • Entrepreneurs and potential entrepreneurs looking for funding
  • University students and young professionals pursuing careers at investment banking or VCs funds

Course content

7 sections • 32 lectures

Welcome to the Venture Capital Course! Preview 02:39

Introduction to Entrepreneurial Finance and Venture Capital Preview 03:45

VC Decision-Making Process Model Preview 01:44

Origination Preview 02:55

Firm-Specific and Generic Screening Preview 01:48

First-Stage Evaluation Preview 04:48

Second-Stage Evaluation/Due Diligence Preview 02:33

Deal Structuring and Closing Preview 02:21

Teaching Case: GreenTech Preview 02:31

Venture Capital Valuation Model: Lecture I Preview 08:06

Venture Capital Valuation Model: Lecture II Preview 06:20

Venture Capital Valuation Model: Lecture III Preview 05:33

Scenario Analysis Preview 03:56

Implicit Valuation of the Venture Capitalist Preview 04:42

Introduction to the Vesting Section Preview 03:02

Scenario I: Anna as CEO Preview 04:12

Scenario II: Anna is Replaced Preview 04:25

Scenario III: Anna is Replaced (without Valuation Restriction) Preview 04:48

Introduction to the Section Preview 03:51

Plain Preferred Equity Session A Preview 08:14

Plain Preferred Equity Session B Preview 06:24

Plain Preferred Equity Session C Preview 09:48

Indifference Acquisition Price for Conversion Preview 04:54

Participating Preferred Equity Preview 08:15

Introduction to the Section: Antidilution Provisions Preview 03:30

Standard Valuation Model Preview 08:54

Full-ratchet Antidilution with James´ Assumptions Preview 04:49

Weighted Average Antidilution with James´ Assumptiions Preview 05:54

Full-ratchet Antidilution with Anna´s Assumptions Preview 06:57

Weighted Average Antidilution with Anna´s Assumptiions Preview 09:00

Course Project: SharingSkills, Inc Case

As a course project, you will have to assume the role of one of the founders of the startup SharingSkills and analyze the term sheets that SharingKnowledge Ventures has offered (you can find it as an attachment).

Conclusion Preview 00:54