Higher Education

Entrepreneurial Finance, 5th Edition

  • J. Chris Leach University of Colorado at Boulder
  • Ronald W. Melicher University of Colorado at Boulder
  • ISBN-10: 1285425758  |  ISBN-13: 9781285425757
  • 752 Pages
  • Previous Editions: 2012, 2009, 2006
  • © 2015 | Published
  • College Bookstore Wholesale Price = $247.25
  • Newer Edition Available
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About

Overview

This accessible, reader-friendly text guides students through a complete "life cycle of the firm" as it introduces the theories, knowledge, and corporate finance tools and techniques an entrepreneur needs to start, build, and eventually harvest a successful venture. With a strong emphasis on sound financial management practices, the text explores important issues entrepreneurs face, including how and where to obtain financing, using business cash flow models, and positioning the early-stage company strategically. Students will also gain an understanding of how to interact effectively with financial institutions and regulatory agencies that can affect venture growth and enable liquidity for investors. Drawing on real-life entrepreneurial ventures and common financial scenarios, the authors include an in-depth capstone case, numerous mini-cases, and abundant examples to engage students' interest and vividly illustrate key concepts such as venture capital funds, institutional investors, strategic alliances, the role of business angels, licensing agreements, and exit strategies. Trust ENTREPRENEURIAL FINANCE, Fifth Edition, to provide the skills and confidence your students need for entrepreneurial success in today's markets.

Features and Benefits

  • THREE CAPSTONE CASES PROVIDE OPPORTUNITIES FOR STUDENTS TO SYNTHESIZE ESSENTIAL IDEAS. In addition to thorough coverage of essential concepts and engaging, real-world examples to bring them to life, the text includes three in-depth capstone cases to provide students with an invaluable opportunity to integrate and apply the numerous concepts they have explored.
  • WEALTH OF END-OF-CHAPTER MATERIALS PROVIDES SIGNIFICANT OPPORTUNITIES TO APPLY CONCEPTS. Each chapter concludes with a variety of learning features to help students review and apply the material, assess their understanding, and identify any areas in need of additional attention. Highlights include Chapter Summaries, Key Terms, Discussion Questions, Internet Activities, Exercises and Problems, Supplemental Exercises, and Mini Cases.
  • ENGAGING, CONVERSATIONAL STYLE MAKES THE TEXT REMARKABLY READER-FRIENDLY. The authors' conversational, reader-friendly tone and straightforward explanations make even complex concepts easier to understand, apply, and retain.
  • TIME-SAVING INSTRUCTOR MATERIALS MAKE CLASS PREPARATION EASIER AND MORE EFFECTIVE. A robust text companion website includes a variety of resources to help enhance your teaching experience and reduce preparation time. The dynamic author-written Instructor's Manual includes answers to end-of-chapter questions and problems, while an extensive Test Bank provides proven true-false and multiple-choice questions, as well as short test problems. Microsoft® PowerPoint® lecture slides are available to aid with lecture planning and classroom activities, while supplementary Excel® spreadsheet models allow students to complete exercises linked to specific text chapters.

Table of Contents

Part I: THE ENTREPRENEURIAL ENVIRONMENT.
1. Introduction to Finance for Entrepreneurs.
2. Developing the Business Idea.
Part II: ORGANIZING AND OPERATING THE VENTURE.
3. Organizing and Financing a New Venture.
4. Preparing and Using Financial Statements.
5. Evaluating Operating and Financial Performance.
Part III: PLANNING FOR THE FUTURE.
6. Managing Cash Flow.
7. Types and Costs of Financial Capital.
8. Securities Law Considerations When Obtaining Venture Financing.
Part IV: CREATING AND RECOGNIZING VENTURE VALUE.
9. Projecting Financial Statements.
10. Valuing Early-Stage Ventures.
11. Venture Capital Valuation Methods.
Part V: STRUCTURING FINANCING FOR THE GROWING VENTURE.
12. Professional Venture Capital.
13. Other Financing Alternatives.
14. Security Structures and Determining Enterprise Values.
Part VI: EXIT AND TURNAROUND STRATEGIES.
15. Harvesting the Business Venture Investment.
16. Financially Troubled Ventures: Turnaround Opportunities?
Part VII: CAPSTONE CASES.
Case 1. Eco-Products, Inc.
Case 2. Coral Systems, Inc.
Case 3. Spatial Technology, Inc.

What's New

  • CURRENT, UP-TO-THE-MINUTE COVERAGE HELPS YOU ADDRESS TODAY'S MOST RECENT FINANCIAL DEVELOPMENTS. The Fifth Edition includes some of the most current information on economic and business developments that are influencing the way successful entrepreneurs fund, launch, grow, and harvest ventures today.
  • UPDATED "FROM THE HEADLINES" FEATURE HIGHLIGHTS INTRIGUING ENTREPRENEURIAL VENTURES. Each chapter includes special features that demonstrate practical applications of key concepts through stories and examples highlighting real entrepreneurial ventures. Corresponding new "Discussion Questions" conclude each chapter to help students review chapter material and further explore important concepts.
  • UPDATED PERSONAL AND CORPORATE INCOME TAX INFORMATION AS IT RELATES TO ORGANIZING AND FINANCING A NEW VENTURE. This chapter also includes recent changes in how the patent system operates.
  • UPDATED MATERIAL REFLECTING THE SIGNIFICANT IMPACT THE JUMPSTART OUR BUSINESS STARTUPS (JOBS) ACT OF 2012 has on raising venture financing.
  • NEW SEPARATE CHAPTERS ON SHORT-TERM AND LONG-TERM FINANCIAL PLANNING. Chapter 6 (Managing Cash Flow) now focuses only on short-term financial statement projections and recognizes the need to generate, or plan for obtaining, sufficient cash flow to survive. Chapter 9 (Projecting Financial Statements) focuses on long-term financial statement projections in order to anticipate additional financing needs and to provide insights into possible value creation.
  • PEDAGOGICAL DESCRIPTIONS BEFORE EACH EXERCISE OFFER STUDENTS VALUABLE GUIDANCE. End-of-chapter exercise and problems are preceded by brief, italicized descriptions that point out the main idea and/or relevant chapter content. In addition, all problems and mini-cases throughout the Fifth Edition reflect contemporary dates and timelines.
  • NEW AND UPDATED INFORMATON ON KEY TOPICS, TOOLS, AND TECHNIQUES THAT TODAY'S ENTREPRENEURS NEED TO SUCCEED. The current edition includes additional detail and revised material on key topics such as "clean tech," "clean energy," environmentally friendly products, cash burn, sustainable sales growth rates, free cash flow valuation methods, the enterprise method of valuing ventures with complex capital structures, employee stock ownership plans (ESOPs), and more.

Meet the Author

Author Bio

J. Chris Leach

J. Chris Leach is Professor of Finance and the Robert H. and Beverly A Deming Professor in Entrepreneurship at the Leeds School of Business, University of Colorado at Boulder. He received a finance Ph.D. from Cornell University, began his teaching career at the Wharton School, and has been a visiting professor at Carnegie Mellon, the Indian School of Business, and the Stockholm Institute for Financial Research (at the Stockholm School of Economics). His teaching experience includes courses for undergraduates, MBAs, Ph.D. students, and executives. A former Graduate Professor of the Year, he has received multiple awards for MBA Teaching Excellence. Dr. Leach's research on a variety of topics has been published in THE REVIEW OF FINANCIAL STUDIES, JOURNAL OF FINANCIAL AND QUANTITATIVE ANALYSIS, JOURNAL OF BUSINESS, JOURNAL OF ACCOUNTING, AUDITING AND FINANCE, REVIEW OF ECONOMIC DYNAMICS, and JOURNAL OF MONEY, CREDIT AND BANKING, among others. His business background includes various startups dating back to his early teens in the 1970s. During his transition to the University of Colorado, he was chairman of a New Mexico startup and later participated as an investor and advisor in a late-1990s Silicon Valley startup that subsequently merged into a public company. Dr. Leach's consulting activities include business and strategic planning advising, valuation, and deal structure for early stage and small businesses. In addition, he is a member of the Deming Center board of directors and a faculty advisor for the Deming Center Venture Fund, where his MBA teams have qualified for nine international championships for the Venture Capital Investment Competition.

Ronald W. Melicher

Ronald W. Melicher is Professor Emeritus of Finance in the Leeds School of Business at the University of Colorado at Boulder. He earned his undergraduate, MBA, and doctoral degrees from Washington University in St. Louis, Missouri. While at the University of Colorado, he received several distinguished teaching awards and was designated as a university-wide President's Teaching Scholar. A former president of the Financial Management Association, Dr. Melicher has taught entrepreneurial finance at MBA and undergraduate levels, corporate finance and financial strategy in MBA and Executive MBA programs, and investment banking to undergraduate students. While on sabbatical leave from the University of Colorado, he taught at the INSEAD Graduate School of Business in Fontainebleau, France, and at the University of Zurich in Switzerland. He has delivered numerous university-offered executive education non-credit courses and has taught in-house finance education materials for IBM and other firms. Dr. Melicher has given expert witness testimony on cost of capital in regulatory proceedings and provided consulting expertise in the areas of financial management and firm valuation. Focusing on mergers and acquisitions, corporate restructurings, and the financing and valuation of early-stage firms, his research has been published in such major journals as the JOURNAL OF FINANCE, JOURNAL OF FINANCIAL AND QUANTITATIVE ANALYSIS, and FINANCIAL MANAGEMENT. In addition, he is the co-author of INTRODUCTION TO FINANCE: MARKETS, INVESTMENTS, AND FINANCIAL MANAGEMENT, 15e (John Wiley & Sons, 2014).