The Federal State Autonomous Institution of Higher Education ""National Research University - Higher School of Economics"

The Government of the Russian Federation

The Federal State Autonomous Institution of Higher Education ""National Research University - Higher School of Economics"

Faculty Management

Master Education Program 080200.68 «Management»

Master Program “Project management: analysis, investments, and technologies of realization”

Program of Course M2.2.2.2 “Venture Project Management”

Author:

Dagaev A. A., PhD (candidat nauk) in Technical Sciences, The senior lecturer (Docent),

phone number - +5-89, e-mail - *****@***com

Approved by the meeting of the Department «___»____________ 2011

Head of the Department _prof. Anshin V. M. __________________[signature]

Recommended by the section of Academic Council «___»____________ 20

Chairman ________________________________ [signature]

Approved by the Academic Council of the Faculty «___»_____________20

Academic Secretary ________________________ [signature]

Moscow, 2011

1  Course Summary

This course provides an introduction to the management of innovative projects realizing by entrepreneurs in wide cooperation with Business Angels and Venture Capital Funds (Start-ups and Later Stages). The students study the history of venture capital and its role in modern knowledge-based economy, basic principles of interaction between entrepreneurs and venture funds, including the organization of project management processes. The special attention is paid to the study of research papers published in recent years by American and European scientists. The state of art of Russian VC market is considered too in the seminars.

The students discuss the purpose, processes and methodologies of venture project management in terms of both relevant theory and as evidenced within practice. Through presentation and discussion of examples of good practice, the students accumulate the special knowledge needed to become successful innovative project’s manager.

The module seminars cover a wide range of topics, within the following key themes:

·  introduction to the venture capital market development in Russia and abroad;

·  business angels and their participation strategy;

·  venture fund organization and sources of venture capital;

·  principles of venture capital investments;

·  stages of venture projects development;

·  venture capital cycle;

·  principles of venture project evaluation;

·  risk management from Start-up stage to Exit stage;

·  VC infrastructure;

·  professional VC society development in Russia;

·  government regulation of entrepreneurial activities;

·  problems of Start-ups and Later stage’s projects development in Russia;

·  world financial crisis and its influence on VC markets in Russia and abroad.

Each of these critical aspects of VC project management is explored from conceptual and practical perspectives.

2  Area of Application and Regulatory References

This Course Program establishes minimum requirements for skills and knowledge of the student and determines the content and the forms of educational activities and reporting.

The Course Program is designed for Master Program students «Project management: analysis, investments, and technologies of realization" within the Course Venture Project Management.

The Course Program has been developed in accordance with:

·  NRU-HSE Curriculum;

·  Master Educational Program «Management» 080200.68

·  University Academic Plan of the Education Program (approved in year 2011)

3  Course Goals

The course designed to achieve the general learning goals of better understanding the actual mechanisms of business creation on the basis of R&D, projects selection and evaluation, cooperation of entrepreneurs and VC investors, development of new projects through venture cycle, skills formations for innovation management. During this term the students get acquainted with a history of venture business formation and development in Russia and abroad, study statistical data and scientific publications devoted to development of venture business, learn to select the new perspective ideas and evaluate business projects, study and compare some best practices of hightech projects management.

4  Students' Competencies to be Developed by the Course

The student is supposed to:

•Know

the role of venture capital in the implementation of technological innovation; the main features of the venture mechanism of projects development; the organization of venture capital in Russia;
• Be able to

plan and organize the implementation of new innovative projects with the involvement of venture capital; negotiating with potential investors; assess the value of new business; distribute the shares of innovative firms between entrepreneurs and investors;
• Gain skills (experience)

in formation of investment proposals; negotiating with investors; distributing of authority and responsibility for project management between the entrepreneur and investor.

The Course develops the following competencies:

Competencies	NC/NRU-HSE Code	Descriptors - the learning outcomes (the indicators of achievement)	Teaching forms and methods of that contribute to the development of a competence
System competences	СК-М2	After the study of this course the students is able to develop the models, to invent and apply methods and tools for professional activities	Lectures, reports on the seminars
System competences	СК-М5	He is able to make management decisions, evaluate their possible consequences and take responsibility for their implementation	Business games, case studies
System competences	СК-М6	He is able to analyze, verify, evaluate the completeness of the information in the course of professional activities, if necessary, to fill and to synthesize the missing information and work in conditions of uncertainty	Case studies, seminars
Socio-personal competences	СЛК –М8	He is able to generate completely new ideas and products, to be creative and initiative	Business games, case studies
Socio-personal competences	СЛК –М9	He is able to create, to describe, and to monitor the implementation of technological requirements and standards in the professional spheres	Lectures, seminars
Instrumental competences	ИК-М1.2пиэк	He is able to organize the project, research, expertise and consulting activities	Seminars
Instrumental competences	ИК-М1.3пиэк	He is able to lead the design, research, expertise and consulting activities	Lectures
Instrumental competences	ИК-М2.1.1	He is able to perceive texts and messages in verbal form	Reports on the seminars
Instrumental competences	ИК-М2.2.2	He is able to create texts and messages in written form	Essays
Instrumental competences	ИК-М2.3.2	He is able to process texts and messages in written form	Home works
Instrumental competences	ИК - М2.4.2. -2	Is able to freely use multiple languages for the purposes of professional and scientific communication	Seminars
Instrumental competences	ИК - М1.2.пр_6.1	He is able to organize self-autonomy of professional activities on the basis of legal and professional standards and responsibilities	Business games
Instrumental competences	ИК-М2.1/2._2.4.1	He is able to conduct written and oral communication in the Russian (state) language in the professional and scientific relations	Seminars
Instrumental competences	ИК-М3.2	He is able to use the methods and techniques of presenting the results of professional activities	Reports on the seminars
Instrumental competences	ИК-М4.1-М4-3	He is able to use ICT methods for searching and processing information, working with databases and presentations	Report’s preparation
Instrumental competences	ИК-М5.1, М5.4, М5.6	He is able to use mathematical, economic and social knowledge to solve problems related to occupational areas	Home works
Instrumental competences	ИК-М6.2	He is able to create and use regulations within his professional activities	Seminars, business games

5  How the Course Fits in with the Curriculum

The present Course is Optional for Specialization «Project management: analysis, investments, and technologies of realization" of Master Education Program 080200.68 «Management»

The Course is to be based on the acquisition of the following Courses:

·  The theory of investment analysis and project financing

·  Processes and tools of project management

·  Organization of business investment projects

·  unusual design solutions methods in project management

·  Management of an innovative project

The Course requires the following students' competencies and knowledge:

students should have a general understanding of management principles, business processes, be able to predict cash flow, understand the role of leadership skills and creative abilities in realization of business projects

The main provisions of the Course should be used for further studies of the following Courses:

·  Management of real investments

·  Business Assessment and Development

·  New products development and marketing

6  Course Schedule

[Course Schedule contains the content (major topics), being structured according to types and forms of educational activity (hours are taken from the Academic Plan)]

[ One-Department Course]

№	Topic	Total amount of hours	Classroom Activities	Self-Study
Lectures	Seminars	Workshops
1	Introduction		2	2		8
2	Venture business: History and prominent features		2	2		8
3	Source of VC		2	2		8
4	VC fund organization and management		2	2		8
5	Project selection by VC investors		2	2		8
6	New business project evaluations		2	2		8
7	VC cycle		2	2		8
8	How to monetize new business?		2	2		8
9	Subject to change		2
10	VC market development in Russia		4	2		8
11	World financial crisis and its influence on VC markets		2	2		8
12	Summarizing.		24	20	2	80

Forms and Types of Testing

Type of testing	Form of testing	modules	Parameters **
3	4
Current (weekly)	Test of 6-10 questions			a 10-minute written tests near each week
Intermediate	Homework assignment			Problems solving, Reports preparations
Final	Test of 40-60 questions			60 min test, verification, appellation

6.1  Grading Criteria

Criteria for assessing student work in seminars and at home are used to determine the achieved level of most system, socio-personal and instrumental competence mentioned above.

The system of criteria designed to ensure real control over the students work throughout the modules. Each week, students study one of the research papers devoted to various aspects of the venture projects management. The classroom tests can assess the ability of students to organize their work on a regular basis, their ability to work with scientific literature in English, understanding the logic of VC project management. The regular tests promote a work discipline. Skipping classes, and thus test for homework without rational reason will automatically reduce the amount of points received by a student.

In the case of illness or other rational reasons a student could write the missed tests before the final testing.

The results of intermediate tests are summarized with the final test results and the results demonstrated by a student in team business games.

The final personal value of student can be extended by the teacher on a certain number of points (from 1 to 5) for the interesting and informative presentation made at the seminars.

7  The Course Content

Part 1. Introduction

Topics:

Innovation and Economic Growth; K-waves; Broad view on innovation role in modern economy; Economic Perspectives of Nanotechnology, Biotechnology, ICT, New sources of energy

The number of the classroom hours distributed by the topics: 4 hours.

The total amount of independent work (self-study): 8 hours

Readings:

Required: [1]; [2], Ch.5; [3], Ch.9.

Supplemental:

Кондратьев циклы конъюнктуры и теория предвидения. М.: Экономика, 2002.

Forms and teaching methods of classes, applied educational technologies:

Lecture, film

Business game

Part 2. Venture business: History and prominent features

Topics:

The reasons of VC mechanism formation and development, prominent features of venture mechanism; it's difference from classical investments; examples of successful businesses in USA and Russia.

The number of the classroom hours distributed by the topics: 4 hours.

The total amount of independent work (self-study): 8 hours

Readings:

Required: [1], [2], ch.5, [4], Ch.1

Supplemental: [6]

Forms and teaching methods of classes, applied educational technologies:

Lecture, film from NVCA

Test for knowledge from research paper [6]

Part 3. Source of VC

Topics:

Types of Investors: entrepreneurs, 3F, business angels, VC funds (independent), Captive funds, Government. Where to find support for Start-up development in Russia and abroad?

The number of the classroom hours distributed by the topics: 4 hours.

The total amount of independent work (self-study): 8 hours

Readings:

Required: [1], [3], Ch.11; [5], ch.1

Supplemental: [7]

Forms and teaching methods of classes, applied educational technologies:

Lecture

Test [7]

Part 4. VC fund organization and management

Topics:

Understanding of investor’s goals, interests and restrictions, LLP, venture firms.

The number of the classroom hours distributed by the topics: 4 hours.

The total amount of independent work (self-study): 8 hours

Readings:

Required: [1], [2], Ch.9, [4], ch.2

Supplemental: [23]

Forms and teaching methods of classes, applied educational technologies:

Lecture

Exercise: Venture Fund models development

Part 5. Project selection by VC investors

Topics:

Projects selection criteria. Business plan: form, structure, content, presentation to investors;

How to draw attention of investors? How negotiate with investors? Models of Project Selection. Weightting of risk and reward factors.

The number of the classroom hours distributed by the topics: 4 hours.

The total amount of independent work (self-study): 8 hours

Readings:

Required: [1]; [3], ch.11, [5], ch.4.

Supplemental: [12], [16], [18].

Forms and teaching methods of classes, applied educational technologies:

Lecture, Case Study, Business game.

Test [12]

Part 6. New business project evaluations

Topics:

How to share business between the entrepreneur and investors? New business evaluation: VC methods, “Hockey stick” method, “First Chicago”, etc. Other methods. New rounds of VC investments.

The number of the classroom hours distributed by the topics: 4 hours.

The total amount of independent work (self-study): 8 hours

Readings:

Required: [1], [3], Ch.11; [5], ch.4

Supplemental: [8], [18].

Forms and teaching methods of classes, applied educational technologies:

Lecture, estimations of the new business ventures (examples).

Test [8]

Part 7. VC cycle

Topics:

Stage of new project development; new investor attraction and shares distribution. How to find money for business growth at later stages?

The number of the classroom hours distributed by the topics: 4 hours.

The total amount of independent work (self-study): 8 hours

Readings:

Required: [1], [3], Ch.11; [4], ch.5

Supplemental: [11], [19-20].

Forms and teaching methods of classes, applied educational technologies:

Lecture, Case Study

Test [11]

Part 8. How to monetize new business?

Topics:

Exit mechanisms, M&A, IPO organization, NASDAQ, LSE. Exits from new VC projects in Russia.

The number of the classroom hours distributed by the topics: 4 hours.

The total amount of independent work (self-study): 8 hours

Readings:

Required: [1], [3], Ch.11; [5], ch.1

Supplemental: [13]

Forms and teaching methods of classes, applied educational technologies:

Lecture, film

Test [13]

Part 9. Subject to change

(optional)

Part 10. VC market development in Russia.

Topics:

History of VC in Russia, Source of VC capital, big players (RVC, Rusnano, etc), Government regulations. VC and Private fund problems and perspectives in Russia. Alternative models of new projects support.

The number of the classroom hours distributed by the topics: 4 hours.

The total amount of independent work (self-study): 8 hours

Readings:

Required: [1], [3], Ch.11; [5], ch.1, [15].

Supplemental: [14], [21-26]

Forms and teaching methods of classes, applied educational technologies:

Lecture, film

Test [14]

Part 11. World financial crisis and its influence on VC markets

Topics:

VC investments dynamics. New VC capital, IPO and M&A in years. Why financial crisis has changed the strategy of VC investors?

The number of the classroom hours distributed by the topics: 4 hours.

The total amount of independent work (self-study): 8 hours

Readings:

Required: [1], [3], Ch.11;

Supplemental: [9], [19-22]

Forms and teaching methods of classes, applied educational technologies:

Lecture, film

Test [9]

Part 12. Summarizing.

In-class final exam, verification, appellation.

8  Educational Technologies

All students study each week at home one of research paper from the list mentioned above. The tutor propose a quizzes at the beginning of lecture or seminar composed of 6-8 questions related to research paper studied.

Two team business games are carried out: one devoted to influence of new technologies on capitalization of the large companies in Russia and abroad (the task of this game is to show advantages of hi-tech business and diversified economy) and second - to a choice by students of perspective innovative projects for venture investments (all project proposed were realized in Russia with a various grade of success).

The student will see several films, devoted to VC business and history of innovations.

The meeting with representatives of Russian companies, master classes of experts and specialists are included in the Course.

9  Methods and Materials for Current Testing and Attestation

9.1  Current Testing Assignments

Examples of questions / assignments for weekly tests:

Questions to monitor the study by students of NBER research paper w-6848:

13. What was a ratio (in %) of venture capital investment and corporate R&D expenditures in the 90- years?

A) 1%; B) 3%; C) 10%; D) 30%; D) 60%.

14. Is it fair to claim that higher patent activity of companies backed by venture capital investors, aims to draw attention of new investors?

A) it is true; b) it is not valid

15. What proportion of the firm’s business plans, received venture capital investment in 90 years?

A)  1%; B) 5% ;C) 10%; D) 30% ;E) 0.01%.

…………………………………….

9.2  Questions for Assessment of Quality of the Course Acquisition

A sample list of questions to the Quiz (Exam) on the entire Course or to each intermediate and final testing as a self-assessing exercise.

The test include from 40 to 60 questions.

Examples:

1. The entrepreneur needs to attract about 100000 euros to implement its innovative project. Which of the potential investors would give the money more likely?

A) the relatives and friends; B) a business angel; C) venture capital funds; D) private equity fund; E) commercial bank.

……………………………

13. Select two of the most important section of the business plan in terms of investment decisions making by venture capital funds:

A) review of firm business to date; B) products and services; C) market analysis and marketing strategy; D) management, E) finance.

……………………………...

17. The value of p/e for the two companies of different economy sectors is 12 and 6, respectively. What conclusion can be done by an investor about the prospects of their shares?

A) is preferable to buy shares of the first company, B) is preferable to buy shares of the second company, B) the difference of p/e multiplier does not matter.

………………………….......

40. Which factor contributes more to attract venture capital investments in start-up?

A) the potential growth of the firm, B) the amount of profit already received by the firm.

9.3  Examples of assignments for the intermediate / final testing

These are given optionally by the Author. The students are given the examples of cards with questions and tasks, assignments for exams or quiz, practice tests.

10  Grading Procedures

Current testing grading has 10 ranks.

The final Grad of students takes into account all kinds of students work:

N= αn1 + βn2 +γn3,

Where N – is a final score of student;

n1 – the score, obtained by results of final testing;

n2 – the score, obtained by results of all weekly tests;

n3 – the score, obtained by results of all business games;

α, β, γ, – the normalized weight factors of tasks complexity which can be varied by tutor (α + β + γ = 1);

For example: α = 0,5, β=0,3, γ=0,2.

The final students estimates are defined on the following scale (under condition of accepted in HSE 10-grade system of estimations):

Nmax – maximum possible score (determined by tutor).

N ≥0,95 Nmax = 10

Excellent

0,95 Nmax >N≥0,9 Nmax = 9

0,9 Nmax >N≥0,85 Nmax = 8

Good

0,85 Nmax >N≥0,75 Nmax = 7

Satisfactory

0,75 Nmax >N≥0,65 Nmax = 6

0,65 Nmax >N≥0,55 Nmax = 5

0,55 Nmax >N≥0,45 Nmax = 4

Bad

0,45 Nmax >N≥0,35 Nmax = 3

0,35 Nmax >N≥0,25 Nmax = 2

0,25 Nmax >N≥0,15 Nmax = 1

0,15 Nmax >N= 0

The value of N can be extended by the teacher on a certain number of points (from 1 to 5) for the interesting and informative presentations made by a student at the seminar.

The Diploma Certificate contains the Course final grade, which is the Course resulting score.

11  Teaching Methods and Information Provision

11.1  Core Textbook

1.  Дагаев презентаций к лекционному курсу. М.: ВШЭ, 2012.

2.  Венчурный инновационный бизнес / Инновационный менеджмент // Ред. , , М.: Дело: 2007. Глава 9, С. 363-404. 3 издание.

3.  Дагаев обеспечение инновационных проектов / Основы инновационного менеджмента // Ред. проф. . М.: Магистр, 2009. Гл.11, С. 354-383.

4.  Kемпбелл K. Венчурный бизнес: новые подходы / пер. c англ. Д. Липинского // М.: Альпина Бизнес Букс, 2004, 2е изд.).

5.  , В поисках бизнес-ангела. Российский опыт привлечения инвестиций. М.: Вершина, 2008.

11.2  Required Reading

Research Papers of National Bureau of Economic Research, USA:

6.  S. Kortumand, J. Lerner (1998), Does Venture Capital Spur Innovation? December, 1998.

7.  R. Halland, S. Woodward (2007), The Incentives to Start New Companies: Evidence from Venture Capital. April, 2007.

8.  P. Gompersetal (2006), Skill vs. Luck in Entrepreneurship and Venture Capital. October, 2006.

9.  J. Aizenman and Jake Kendall (2008). The Internationalization of Venture Capital and Private Equity. September, 2008.

10.  B. Jovanovic and Balazs Szentes (2007). On the Return to Venture Capital. January, 2007.

11.  P. Gompersetal (2005). Venture Capital Investment Cycles: The Impact of Public Markers. May, 2005.

12.  M. DaRinand, M. F.Penas (2007), The Effect of Venture Capital on Innovation Strategies. November, 2007.

13.  M. Puriand, R. Zarutskie (2008), On the Life Cycle Dynamics of Venture Capital and Non Venture Capital Financed Firms. August, 2008.

14.  H. Chenatal. (2009), BuyLockal? The Geography of Successful and Unsucsessful Venture Capital Expansion. June, 2009.

Electronic versions of these papers are available on the Internet site of National Bureau of Economic Research, USA (http//www. nber. org)

11.3  Supplementary Reading

15.  .Осипович A. Рискованный бизнес: новые российские предприниматели рассказывают свои истории. М.: Альпина Бизнес Букс, 2005.

16.  Как составить наилучший бизнес-план для любой отрасли и сферы деятельности. Forbes и Стэнфордская школа бизнеса рекомендуют / СПб: Прайм – ЕВРОЗНАК, 2008.

17.  Brian G. Atwood (2002), The Venture Capital Deal valuation, Ownership and Round Dynamics. UC San Francisco Bioentrepreneurship Symposium.

18.  http://www. -Gate2Growth Academic Network Board and the European Commission’s Innovation Policy Unit.

19.  http:// – Global Media Group “ThomsonReuters”.

20.  http://www. - Venture Capital Journal.

21.  http://www. nvca. org – National Venture Capital Association (USA).

22.  http://www. – European Venture Capital Association.

23.  http://** – Российская венчурная компания.

24.  http://www. ***** – Фонд содействия развитию малых предприятий в научно-технической сфере.

25.  http://www. - .

26.  http://www. ***** - Российская Ассоциация Прямого и Венчурного Инвестирования.

11.4  Directories, dictionaries, encyclopedias

, ВЕНЧУРНЫЙ БИЗНЕС. Толковый словарь труднопереводимых англоязычных терминов. М.: Финансы и статистика, 2006.

11.5  Software

For successful acquisition of the Course the student uses the following software:

·  Microsoft Office ;

·  Adobe Acrobat 8,0 and later version;

·  Media Player for processing flv. and avi. files

·  Special software tools for scientific research: Statistica, SPSS.

11.6  Distance Learning

Distance Learning is not applicable for the Course]

12  Technical Provision

PCs, Projector (for lecturers and seminars), auxiliary materials for tests.

13  Academic Integrity

14.1 Each student in this course is expected to abide by the Higher School of Economics’ Academic Honesty Policy. Any work submitted by a student in this course for academic credit will be the student's own work.

14.2 You are encouraged to study together and to discuss information and concepts covered in lecture and the sections with other students. You can give "consulting" help to or receive "consulting" help from such students. However, this permissible cooperation should never involve one student having possession of a copy of all or part of work done by someone else, in the form of an e-mail, an e-mail attachment file, a diskette, or a hard copy. Should copying occur, both the student who copied work from another student and the student who gave material to be copied will both automatically receive a zero for the assignment. Penalty for violation of this Policy can also be extended to include failure of the course and University disciplinary action.

14.3 During examinations, you must do your own work. Talking or discussion is not permitted during the examinations, nor may you compare papers, copy from others, or collaborate in any way. Any collaborative behavior during the examinations will result in failure of the exam, and may lead to failure of the course and University disciplinary action.

14  Accommodations for Students with Disabilities

The Higher School of Economics is committed to ensuring equal academic opportunities and inclusion for students with disabilities based on the principles of independent living, accessible universal design, and diversity. I am available to discuss appropriate academic accommodations that may be required for student with disabilities. Requests for academic accommodations are to be made during the first three weeks of the semester, except for unusual circumstances. Students are encouraged to register with Disability Services Center to verify their eligibility for appropriate accommodations.