Contents
Section 001: 12:30 pm - 1:45 pm TR, Bidgood Hall 125
Date range: August 21 - December 4ish, 2025
New Venture Finance (MGT 481) provides students with working knowledge of financing mechanisms such as friends and family, venture capital, angel investments, and debt instruments for creating and operating a new venture; valuation methods for determining pre- and post-money; creating capitalization tables to track equity ownership assignments and investment rounds.
MGT 300 and MGT 386, MGT 387 may be taken as co-requisite
see this Google doc
Three paperback (or ebooks) available at Amazon.com
Founder’s Pocket Guide: Friends and Family Funding $7.99 ($3.03)
ISBN 978-1-938162-11-4
Founder’s Pocket Guide: Startup valuation $7.99 ($3.99)
ISBN-13: 978-1938162046
ISBN-10: 1938162048
Founder’s Pocket Guide: Term sheets and preferred shares $7.99 ($3.99)
ISBN 978-1-938162-06-0
The lowdown: You can probably get through this course without these books, but I purposely chose these books because of their quality, conciseness, and price.
Professor Craig E. Armstrong, Ph.D. | Alston 155 | MGT481BAMA@gmail.com for "formal" course communications | profcraigarmstrong@gmail.com for after course| Group.me for informal communications - quick answers and sudden announcements - I will invite you to the group by the first day of class or sooner by email. Everyone should be in the groupme for this course.
Add MGT481BAMA@gmail.com to your address books now
I have organized this course into modules that present topics in "bite-sized" portions. A module usually covers a well-defined topic over a short period with defined objectives and graded activities. You should refer to this section of the course web site a few times a week to keep up with updates and to prepare yourself in advance for upcoming activities and assignments.
You will turn in a graded activity nearly every week of the semester beginning later in January. I generally offer practice quizzes, which are not required, for each module. I provide practice quizzes because it's proven to to help reinforce what you've learned. After viewing the assigned readings and videos and attending lectures in class, you'll have a graded assessment activity. This could be in the form of a written analysis, a brief case write-up, or an additional graded quiz. All assignments are due by 11:59 pm, Sunday evenings, unless I specify a different day (rarely). The points I've assigned to each module are intentionally set so that messing up on any one particular assessment won't crush your grade (or your soul). Ten assignments each each worth 10 points - usually as quizzes - all add to 100 total points for the course.
(tentative, I have a busy travel schedule this semester)
Since we're talking schedules, here's a link to the UA academic calendar page.
This section last updated: August 21, 2025
Aug 21 - Review syllabus - Possible ice breaker..Some thoughts on entrepreneurship education.Here are the slides I used for the introduction
Aug 26: Course opener - Proof Eyewear on Shark Tank - Skills: Simple income statement, backing into numbers, working capital. The first in a series of Shark Tank cases.
Aug 28: Follow-up skills on thinking like a Shark Tank Shark - First, a review of last lecture's lessons - Then See "Shark Tank II" for group activity. Speaking of trade shows, what can we learn about the "trade show industry" that informs our assessment of selling at trade shows? See this google doc for some answers.
Sep 2 - Financial statements and analysis, here is a link to a write-up overview of financial analysis methods to help you reinforce learnings associated with vertical, horizontal, and ratio analyses (google doc),
Sep 5 - In-class non-graded activity for applying financial analysis to business models and companies activities. Use this google doc to answer questions about Proof Eyewear's pro forma financials. When you are done, please turn in your docs to profcraigarmstrong@gmail.com. I will send out a GRADED QUIZ to you later on Sep 5. (10 points)
NOTE: Please do not use my @ua.edu email address for class communications! See above.
Sep 9 - Lecture First: Ratio analysis for restaurants you (might) love. You can tell a lot about the business model a business uses to deliver a value proposition based on its revenue and costs structure;
New Venture Finance Financial Analysis Vignettes - Practical situations for startup founders.
Happy Go Fun Time: You will work in student teams and use A.I. assistance to create (1) a unique type of shoe that meets a customer group's specific unmet needs to sell in a "crowdfuncing campaign;" (2) create a prototype image using A.I.; (3) get estimates to build out a prototype of your shoe.Here is the link to the Netflix design documentary on Nike shoe designer Tinker Hatfield
Want an overview of financial analysis methods? (SUPPLEMENTAL: here is a link to a write-up overview of financial analysis methods (google doc).
Sep 11 - Iterate from Problem to Solution toward Product-Market Fit with a Kickstarter campaign. Open this script to use for your AI session.
(Bonus Material: navigate to Ridge and watch the video, read the transcript, live the dream)
I am thinking about how some individuals navigate the "influencer" path as a way to magnify public exposure and promote products or services for a living. Here are Closing Prompt: Steps to Become an Influencer and Closing: How to Start Becoming an Influencer. Both documents are step by step instructions you can follow to experiment with becoming an influencer.
Optional reading: The college-to-corporate pipeline is facing extinction. Here's why. (Fast Company, 7/10/2024)
No QUIZ THIS WEEK!
Sep 16, begin Pro Forma Financials topic with Krabby Patties build up method and Beatbox Beverages example,
Sep 18 In-class pro formas activity using AI tools. We will watch the Autoshop business plan presentation, you will complete the AI prompt deck session, and share the URL for your AI session including all of your queries and responses with me at MGT481BAMA@gmail.com. I will follow up with a quiz later today that includes questions related to this AI activity. (followed by graded weekend quiz, 10 points) Update: I sent the quiz out at 8:20 PM today
Sep 23; Intro to working capital management
Sep 25, More working capital management; Working Capital Management Quiz, sent out Thursday, Sep 25, due midnight, Sep 28, (10 points).
Sep 30 Overview of Sources of Financing,
One of you asked in class yesterday about the tax structure of LLCs, which are a flexible, less costly way to create a legal entity than C Corporations. The net incomes of LLCs 'pass through' to the 'members' of the LLC. If you have multiple members then there are special IRS forms you can use to report income from your LLC in your own personal taxes. I queried ChatGPT with a lot of questions and now have this document to share for those who are interested.
And, one of you asked what keeps VC firms from using their serial fund structure from engaging in pyramid schemes (an intriguing question!). Venture capital (VC) firms raise multiple funds over time, often referred to as "serial funds" or "vintage funds." While, in theory, this structure might resemble aspects of a pyramid scheme—raising new funds while older ones are still active—several structural, legal, and market-based factors prevent VC firms from operating as pyramid schemes. A rather detailed examination of this question and the multiple safeguards that prevent this behavior is provided in this doc. Thank you both for your questions!
Oct 2: No in-class lecture; Here is our in-class activity on Sources of Financing for Autoshop. On 3pm-ish look for Quiz in your email on Sources of Financing, Out of class (10 points), due midnight Sunday, Oct 5. Listed on Bb as Sources of Financing (or close to that).
Oct 7: Cap Tables: who invested how much at what stage of financing at what share price? Navigate to Cap Tables (short deck of lecture slides), and explore a generic cap table here; Here is a text explanation of how to calculate new number of shares and share price. Other topis for discussion: The importance of "breaking out" so you don't follow value-enhancing investment rounds with dilutive ones.
Oct 9: Read Understanding Capitalization Tables. Cap Tables In-class non-graded activity to immerse you in cap table logic (team activity); On Thursday afternoon I'll send out an Out-of-class quiz, 10 points, listed on Bb as "Cap Tables," complete by Sunday, midnight.
Oct 14 No in-class lecture; How to talk to investors; Founders
Oct 16: How entrepreneurs finance their ventures in earliest stages (google slides)
Resourceful entrepreneur: Just launched Jamie Siminoff (2:27); Shark Tank appearance in 2013 (9:42)(Read comments below YouTube video); 3 years later From Garage to 150+ employees "Look at that...now there is a like whole f***ing building..." (5:42). Amazon purchased Ring on April 12, 2018 for approximately $839 million. Armstrong estimated Cap Table
Read: Jamie Siminoff '99 and the Power of Entrepreneurial Thinking (Babson.edu, 4/19/21); Working on Cap Tables with ChatGPT (Armstrong, 3/6/2025)
END of WEEK 9 - Quiz on Founders and Earliest Stage Financing (sent to you Oct 16, due midnight Oct 19)
Also this lecture: New skills for new problems. (presentation)
BONUS: Biggest mistakes first time founders make (7:10). Tentative: How startup fundraising works (29:00) How to build an MVP (16:52; related Bar Tap MVP) POSSIBLE in-class activity (not graded), Bonus reading: Crunchbase Explainer: How To Sell Your Stock Options On A Secondary Market (Crunchbase, 2/6/23)
Suggested Readings: 16 Startup Metrics from A16Z.com;
Oct 21: Friends and Family,
Oct 23: No lecture this day. Otherwise, Early stage valuation: Early Stage Valuation
You'll take a quiz on Friends and Family that I will send out on Thursday, October 23 (due October 26)
Optional reading: Silicon Valley's Elite Pour Money into Blotting out the Sun, Get ready for solar radiation management (SRM) Bloomberg.com or here, 10/25/24. Topics: Permissions, SRM credits sales, climate change, monetization - a unique business model
Oct 28: Early-stage valuation
Oct 30: Fall Break
Nov 4:More Early Stage Valuation -
Viewing in class ; + Read all of this article on Objectives and Key Results (OKRs) = Determining what milestones to pursue at which points in your venture's development to optimize use of investor funds and valuation
Nov 6: Out-of-class quiz on early-stage valuations, due by midnight, Sunday, Nov 9, emailed to you around 3:00 pm, Nov 6.10 points (on Bb as "Early Stage Val")
Nov 11 More methods of early-stage startup valuation; In-class activity: Early stage valuation methods in class
Nov 13: Angel Investors, Variations in Angel Ownership Percentage Out of class quiz, sent out to you around 3:30pm, Apr 10, and due by midnight, Sunday, Apr 13: 10 points (on Bb as "Angel")
Nov 18 Venture Capital (for slides), Read also: Series A Term Sheet Template (Y Combinator)
Nov 20: More venture capital Read before class to help you understand the mechanics of Total Wave Fund One. (here is an example of how the mechanics work) (Turn in QUIZ on venture capital by midnight, Nov 23, 10 points (On Bb as "Venture Capital").
Nov 22 - 30: Thanksgiving Break
Nov 2 - 4: Special Topics week; possible: Entrepreneurship through acquisition, aka "Search Funds," or VC Challenge Game
Mark Suster
Resources you can (should) use in addition to assigned readings and activities, but not required for this course. I want to help you on your entrepreneurial journey in this class, your other classes, and into your future.
Seraf is committed to professionalizing early stage startup investing
Approximations, Assumptions and Aspirations: Methods For Valuing Startups [Part I]. Part of a series on valuation and capitalization. Links to free ebooks on angel investing, portfolio construction, startup economics.
7 Key Risks in Early Stage Investing [Infographic] Technical, Market adoption, Team, Financial, Regulatory, Competition, and Intellectual Property Risk.
Stones Unturned: An investor's guide to due diligence in early stage companies
PaulGraham.com. Mostly longform essays on topics related to startups, the philosophy of startups, phenomena related to the startup context, and being a better prepared founder.
(Some of) My Favorites
How to do great work (for young people, figure out what you're good at. Find your aptitudes. Play to your strengths.)
Startup = Growth. IOW, how do we define a startup? and Why should we care? Everything we assoiate with startups follows growth
Ramen profitable. Ramen profitability buys you time. This essay led me to coin one of my favorite expressions: Live like a student, work like a founder.
Select posts by Marc Andreessen 2007-2009; peer into the thoughts of one of the most influential entrepreneurs over the past three decades on a variety of topics.
A resource for instructional materials and videos of classroom lectures in the STVP program.
Specific resources
Blank, S., Engel, J., & Hornthal, J. 2014. Lean LaunchPad: Evidence-based entrepreneurshipTM educators guide (6th ed.). VentureWell. (full text!)
US Small Business Association (SBA.gov): Financing Options for Small Businesses (45-minute course).
This self-paced training exercise is an introduction to financing options for your business. Topics include; determining your financial needs, loans, grants, venture capital, angel investors, crowd funding and other financial options available to small businesses.
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