Higher Education

Entrepreneurial Finance, 4th Edition

  • J. Chris Leach University of Colorado at Boulder
  • Ronald W. Melicher University of Colorado at Boulder
  • ISBN-10: 0538478152  |  ISBN-13: 9780538478151
  • 688 Pages
  • Previous Editions: 2009, 2006, 2003
  • © 2012 | Published
  • College Bookstore Wholesale Price = $240.00
  • Newer Edition Available
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About

Overview

Show your students how to apply today’s most effective corporate finance tools and techniques to their own entrepreneurial ventures with Leach/Melicher’s ENTREPRENEURIAL FINANCE, 4E. This accessible, reader-friendly edition closely follows a “life cycle of the firm” approach as it introduces the theories, knowledge, and financial tools an entrepreneur needs to start, build, and eventually harvest a successful venture. This edition clearly focuses on sound financial management practices, showing students how and where to obtain the financial capital necessary to run and grow a venture. This edition explores the most important financial issues that entrepreneurs face, particularly the stages of financing, business cash flow models, and strategic positioning of the early-stage company. Students gain the knowledge to interact successfully with financial institutions and the regulatory agencies that are central to financing ventures as they grow and, ultimately, look for liquidity for their investors. A new capstone case and updated mini-cases, as well as engaging entrepreneurial ventures lifted from the latest headlines keep students involved and learning as they examine concepts such as venture capital funds, institutional investors, and strategic alliances. This edition also provides your student with a thorough understanding of the role of business angels, licensing agreements, and exit strategies. Trust ENTREPRENEURIAL FINANCE, 4E to provide the knowledge and skills today’s students need for entrepreneurial success.

Features and Benefits

  • THREE CAPSTONE CASES PROVIDE OPPORTUNITIES FOR STUDENTS TO SYNTHESIZE THE TEXT’S MATERIAL. With this edition’s significant coverage, three proven capstone cases offer important opportunities to integrate and apply the numerous concepts students have learned. New case, Eco-Products, Inc. represents a company that produces and sells environmentally sound food service products from renewable resources.
  • NEW “FROM THE HEADLINES” FEATURE IN EACH CHAPTER HIGHLIGHT INTRIGUING ENTREPRENEURIAL VENTURES. Students see chapter content put into practice as each entrepreneurial venture relates to concepts presented within the chapter. Corresponding new “Discussion Questions” conclude each chapter and demonstrate to students what they have learned.
  • WEALTH OF END-OF-CHAPTER MATERIALS PROVIDES SIGNIFICANT OPPORTUNITIES TO APPLY CONCEPTS. Each chapter concludes with a Chapter Summary, Key Terms, Discussion Questions, Internet Activities, Exercises and Problems as well as Supplemental Exercises and Mini Cases to give you and your students a significant choice of applications.
  • INSTRUCTOR MATERIALS you need to enhance your teaching experience and reduce preparation time are available on the companion website. The dynamic author-written Instructor’s Manual includes short answers to end-of-chapter questions and answers to end-of-chapter problems, while this edition’s Test Bank provides proven true/false and multiple-choice questions as well as short test problems. PowerPoint® lecture slides further reinforce concepts and exhibits from the text. Your students further save time as they work with supplementary Excel® spreadsheet models that correspond with specific text chapters.

Table of Contents

PART I: BACKGROUND AND ENVIRONMENT.
1. Introduction and Overview.
2. From the Idea to the Business Plan.
PART II: ORGANIZING AND OPERATING THE VENTURE.
3. Organizing and Financing a New Venture.
4. Measuring Financial Performance.
5. Evaluating Financial Performance.
PART III: PLANNING FOR THE FUTURE.
6. Financial Planning: Short Term and Long Term.
7. Types and Costs of Financial Capital.
8. Securities Law Considerations When Obtaining Venture Financing.
PART IV: CREATING AND RECOGNIZING VENTURE VALUE.
9. Valuing Early-Stage Ventures.
10. Venture Capital Valuation Methods.
PART V: STRUCTURING FINANCING FOR THE GROWING VENTURE.
11. Professional Venture Capital.
12. Other Financing Alternatives.
13. Security Structures and Determining Enterprise Values.
PART VI: EXIT AND TURNAROUND STRATEGIES.
14. Harvesting the Business Venture Investment.
15. 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. This edition offers some of the most current information and developments available for this course, enabling you to prepare your students with the latest financial tools and knowledge.
  • NEW DISCUSSION HIGHLIGHTS THE SPECIFICS AND ENTREPRENEURIAL OPPORTUNITIES PRESENTED WITH THE 2007-2009 FINANCIAL AND ECONOMIC CRISIS. Students examine the financial crises, resulting entrepreneurial venture opportunities and effective methods for dealing with tighter capital.
  • NEW “FROM THE HEADLINES” FEATURE IN EACH CHAPTER HIGHLIGHT INTRIGUING ENTREPRENEURIAL VENTURES. Students see chapter content put into practice as each entrepreneurial venture relates to concepts presented within the chapter. Corresponding new “Discussion Questions” conclude each chapter and demonstrate to students what they have learned.
  • NEW CAPSTONE CASE PROMPTS STUDENTS TO MAKE EARLY-STAGE SOUND FINANCING DECISIONS. This edition’s new capstone case features Eco-Products, Inc., a company that produces and sells environmentally sound food service products from renewable resources. Students make early-stage financing decisions, including raising funds through a private placement memorandum, and handling a proposed private placement with an investment firm utilizing a term sheet. Useful excerpts from the private placement memorandum and term sheet allow you to guide student review and analysis.
  • NEW PEDAGOGICAL DESCRIPTIONS BEFORE EACH EXERCISE OR PROBLEM OFFER STUDENTS VALUABLE GUIDANCE. Each end-of-chapter exercise or problem is now preceded by a brief, italicized description that directs students to the key content or focus of the exercise or problem. In addition, all problems and mini-cases throughout this edition reflect contemporary dates and timelines.
  • SUBSTANTIALLY REWRITTEN “INTRODUCTION AND OVERVIEW” (CH. 1) NOW REFLECTS TODAY’S FOCUS ON ENVIRONMENTALLY FRIENDLY PRODUCTS. Students become familiar with “clean tech” and “clean energy” potential applications as well as entrepreneurial venture opportunities related to environmentally friendly products.
  • UPDATED PERSONAL AND CORPORATE INCOME TAX INFORMATION REFLECTS THE LATEST CHANGES. Chapter discussion guides students through effectively organizing and financing a new venture (Ch.3) with fresh, contemporary references and information.
  • IMPROVED CLARITY OF CASH BURN DISCUSSION. (CH. 5) with the addition of new financial ration problems and restructured minicase.
  • ADDED PROBLEM MATERIALS ON SUSTAINABLE SALES GROWTH RATES AND ADDITIONAL FUNDS NEEDED. (CH. 6)
  • REORGANIZED CHAPTER ON VALUING EARLY-STAGE VENTURES (CH. 9) IS NOW CONSOLIDATED FOR CLEARER UNDERSTANDING OF FREE CASH FLOW VALUATION METHODS. Concept is supported by restructured end of chapter minicase.
  • SUBSTANTIALLY REWRITTEN SECTION ON “VALUING VENTURES WITH COMPLEX CAPITAL STRUCTURES NOW FOCUSES ON THE ENTERPRISE METHOD. This coverage (CH.13) presents the method consistent with Chapter 9’s streamlined coverage. An alternative enterprise valuation method now presented as a Learning Supplement to the chapter.
  • NEW COVERAGE OF “EMPLOYEE STOCK OWNERSHIP PLANS (ESOPS) FAMILIARIZES STUDENTS WITH THIS OPTION. Updates to “Post-IPO Trading” (Ch. 14) also now reflect current NYSE and Nasdaq listing requirements data.

Efficacy and Outcomes

Reviews

“I have a strong preference for your text. You have better examples and cover more relevant content.”

— Robert M. Patterson, CFA, Westminster College

“I like content; I like the finance involved and I like valuation which is so necessary for this class.”

— Srinivasan Sundaram, Ball State/Miller College

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 at the University of Colorado at Boulder. He received a finance Ph.D. from Cornell University, began his teaching career at the Wharton School, and has served as a visiting professor at Carnegie Mellon, the Indian School of Business, and the Stockholm Institute for Financial Research. Dr. Leach's teaching experience includes courses for undergraduates, MBA students, executives, and Ph.D. students. He has been recognized as Graduate Professor of the Year and has received an award for MBA Teaching Excellence. His research on a variety of topics has been published in The Review of Financial Studies, Journal of Business, and Journal of Financial and Quantitative Analysis, among others. Dr. Leach's business background includes various startups dating back to the 1970s. More recently, he served as chairman of a New Mexico startup and, as an investor and advisor, participated in a late 1990s Silicon Valley startup that subsequently was merged into a public company. His consulting activities include business plan advising, valuation, and deal structure for early stage and small businesses.

Ronald W. Melicher

Ronald W. Melicher is professor of finance and chair of the Finance Division at the Leeds School of Business at the University of Colorado at Boulder. He earned his undergraduate, MBA, and Ph.D. degrees from Washington University in St. Louis. At the University of Colorado, he has received several distinguished teaching awards and was designated as a university-wide President's Teaching Scholar. Dr. Melicher also has held the William H. Baugh Distinguished Scholar faculty position, served two terms as chair of the Finance Division, served as the faculty director of the Boulder Campus MBA Program, and was the academic chair of the three-campus executive MBA program. Dr. Melicher teaches corporate finance and financial strategy in the MBA and executive MBA programs and investment banking to undergraduate students. While on sabbatical from the University of Colorado, Dr. Melicher has taught at the INSEAD Graduate School of Business in Fontainebleau, France, and at the University of Zurich in Zurich, Switzerland. He has presented expert witness testimony on the cost of capital in regulatory proceedings and has provided consulting expertise in the areas of financial management and firm valuation. Dr. Melicher has published articles in the Journal of Finance, Journal of Financial and Quantitative Analysis, and Financial Management.