Syllabus

Course Description

The VC University course provides an overview of venture finance through lectures, interviews with leading venture capitalists, and interactive assessments. Participants will learn the nuts and bolts of venture finance and earn a certificate of completion from Berkeley Law, the National Venture Capital Association (NVCA), and Venture Forward. The course examines the economics of U.S. venture capital (“VC”) finance with a focus on developing financial models on how various provisions affect investor and founder valuation and cash flows. For example, students will learn how VC contract provisions are designed to protect investors from economic and voting dilution.

Learning Outcomes

This class is designed to provide an introduction to venture finance as it is used in practice. The course focuses on the application of the terms and processes and the economics of what is included and considered in a standard VC “term sheet.” The course aims to provide its students with a core set of practical skills that every venture capitalist, investor, and entrepreneur should master.

Format of Class

This class combines lectures, exercises, and in-person discussions — delivered online. This class is largely asynchronous, which means that you choose what time of day you are “in class.” We recommend setting a daily class/study time that fits your schedule and to adhere to it during the course, setting aside roughly 3-4 hours each week. The program is designed to be completed in approximately 10 weeks, but you will have access to the platform for five months to complete all of the requirements. The modules must be done in order (i.e., completing one module will “unlock” the next).

Instructor Office Hours and Communication

We have scheduled weekly office hours with instructors to provide opportunities for “live” discussion with them and your classmates that occur at scheduled times. Most of the office hours will be held on Tuesdays at 10:00 AM Pacific Time (some will be at 3:00 PM Pacific Time), via Zoom. Exact dates and the Zoom link will be provided on the course platform and are subject to change. The office hours will not be recorded.

Graded Quizzes

Each module ends with a graded quiz and these quizzes may be taken multiple times; however, you must score at least 75% on each quiz in order to advance to the next module. Read the questions carefully and please submit your answers with care. If you have any questions regarding a quiz, submit a comment directly in Canvas by navigating to your Grades tab, click on the quiz on which you wish to leave a comment, and type the comment in the “Add a Comment” field that appears on the right side of the screen.

Certificate Eligibility

In addition to watching all the sessions (lectures, interviews, and labs), you must achieve a score of 75% or higher on each of the graded quizzes. Once you have finished the course, you must complete the post-program survey in order to receive your certificate. Certificates will be awarded on a rolling weekly basis approximately 10 weeks into the course.

Please note that office hour instructors & speakers are subject to change. Details and reminders will be sent directly via the course platform.

Weeks One and Two: Venture Fund Fundamentals

Office hours: Adam Sterling, Assistant Dean, Executive Education, Stanford Law School
Scott James, Partner & Chief Operating Officer, Goodwater Capital

This module provides an overview of how venture funds are formed, structured, and managed. The investor perspective conversations explore strategies around raising a venture fund and developing and deploying an investment thesis.

Suggested Reading: Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist; Fourth Edition: Chapter 1 (“The Players”) and Chapter 12 (“How Venture Capital Funds Work”)
Secrets of Sand Hill Road: Chapter 3 (“How Do Early-Stage VCs Decide Where to Invest”), Chapter 4 (“What are LPs and Why Should You Care?”), and Chapter 5 (“The ‘Limited’ Edition: How LPs Team Up with VCs”)

Lectures: What is a Venture Fund?
Scott James (Partner & COO, Goodwater Capital) helps answer the deceptively simple question: What is a venture fund? In these lectures, we explore the basics of venture fund structuring and management, including some key implications for entrepreneurs seeking venture investment and investors working at, or hoping to start, a fund.
1.1.1 — The Fund
1.1.2 — Limited Partners
1.1.3 — The General Partner
1.1.4 — The Management Company
1.1.5 — Introduction to VC Fund Economics
1.1.6 — Management Fee
1.1.7 — Carried Interest

Investor Perspective: VC Basics with Scott Kupor
Scott Kupor (Managing Partner, Andreessen Horowitz) provides insight in fund structure, when to raise a fund, and the relationship with LPs.

Investor Perspective: When to Raise a Fund with Precursor Ventures
Charles Hudson (Founder and Managing Partner of Precursor Ventures) discusses his fund, fundraising experience, and when to think about raising your own fund.

Investor Perspective: When to Raise a Fund with Chingona Ventures
Samara Hernandez (Founding Partner of Chingona Ventures) discusses her fund, fundraising experience, and when to think about raising your own fund.

Investor Perspective: When to Raise a Fund with Renegade Partners
Renata Quintini (Co-Founder and Managing Director, Renegade Partners) discusses her fund, fundraising experience, and when to think about raising your own fund.

Investor Perspective: Developing and Deploying an Investment Thesis with Arboretum Ventures
Jan Garfinkle (Founder and Managing Partner, Arboretum Ventures) shares details on her firm’s investment thesis, how it was developed, how entrepreneurs should think about an investor’s investment thesis, and how her firm’s investment thesis shapes the strategy for sourcing and closing deals.

Investor Perspective: Developing and Deploying an Investment Thesis with Obvious Ventures
James Joaquin (Co-Founder, Obvious Ventures) shares details on his firm’s investment thesis, how it was developed, how entrepreneurs should think about an investor’s investment thesis, and how his firm’s investment thesis shapes the strategy for sourcing and closing deals.

Investor Perspective: Developing and Deploying an Investment Thesis with Emergence Capital
Joseph Floyd and Santi Subotovsky (General Partners, Emergence Capital) share details on their firm’s investment thesis, how it was developed, how entrepreneurs should think about an investor’s investment thesis, and how the firm’s investment thesis shapes the strategy for sourcing and closing deals.

Investment Thesis Overview
Some key takeaways to consider when coming up with or refining your own investment thesis.

Quiz: What is a Venture Fund?

Weeks Three and Four: Startup Fundamentals

Office hours: Stephanie Lane, Partner, Gunderson Dettmer LLP
Omar Alam, VP, M&A Legal, Associate General Counsel, Salesforce Ventures

This module provides an overview of how venture-backed startups are formed and structured. The investor perspective conversations explore how investors diligence startups when investing.

Suggested Reading: Venture Deals: Chapter 19 (“Legal Things Every Entrepreneur Should Know”)
Secrets of Sand Hill Road: Chapter 6 (“Forming Your Startup”)

Lectures: Startup Fundamentals
Adam Sterling (Assistant Dean, Stanford Law School) breaks down the legal, financial, and operational issues that venture-backed startups and their founders face. Topics include entity formation, issuing founder equity, raising money from investors, and securities laws.
Deborah Kang (Senior Director, Legal – Product, Security, and Privacy at Neo4J) explores the basic intellectual property (IP) issues thatventure-backed startups and their investors face.
2.1.1 — Entity Formation
2.1.2 — Founders Equity
2.1.3 — Raising Money from Investors
2.1.4 — Securities Law
2.2.1 — IP and Venture Deals
2.2.2 — What is IP?
2.2.3 — Open Source
2.2.4 — Ownership Issues & Owner Common Pitfalls
2.2.5 — Creating an IP Strategy

Investor Perspective: Startup Diligence
Kate Mitchell (Co-Founder and Partner, Scale Venture Partners) discusses how investors (whether they’re a lead investor or not) conduct diligence for seed/convertible financings, Series A financings, and beyond, as well as how startups can prepare for the diligence process.

Life Sciences Investor Perspective: Startup Diligence
Vikram Bajaj, Ph.D. (Managing Director, Foresite Capital) and Cindy Xiong, Ph.D. (Senior Investment Analyst, Foresite Capital) discuss how investors (whether they’re a lead investor or not) conduct diligence for seed/convertible financings, Series A financings, and beyond, as well as how startups can prepare for the diligence process.
Note: This video is only a requirement for our Life Sciences Scholarship (LSS)
recipients

Quiz: Startup Fundamentals

Weeks Five and Six: Venture Deal Fundamentals

Office hours: Nadia Dugal, General Counsel, Congruent Ventures
The team at Johnson & Johnson Innovation | JJDC

This module provides an overview of how venture financing deals are structured. The investor perspective conversations explore strategies
around venture deal sourcing and structures.

Suggested Reading: Venture Deals: Chapter 3 (“How to Raise Money”), Chapter 4 (“Overview of the Term Sheet”), Chapter 5 (“Economic Terms of the Term Sheet”), Chapter 6 (“Control Terms of the Term Sheet”), Chapter 7 (“Other Terms of the Term Sheet”), Chapter 8 (“Convertible Debt”), and Chapter 9 (“The Capitalization Table”)
Secrets of Sand Hill Road | Chapter 9 (“The Alphabet Soup of Term Sheets: Part One”), Chapter 10 (“The Alphabet Soup of Term Sheets: Part Two”), and Chapter 11 (“The Deal Dilemma: Which Deal Is Better?”)

Lectures: Venture Deal Fundamentals
Nadia Dugal (General Counsel, Congruent Ventures) provides a general overview of the standard structures in venture capital financings, as well as an overview of the history of these structures and how they became commonplace. Nadia also provides an overview of key legal terms, including what she views as market standard.
3.1.1 — Structures
3.1.2 — Convertible Debt
3.1.3 — Equity
3.1.4 — Liquidation Preference
3.1.5 — Employee Equity
3.1.6 — Anti-Dilution Protection; Corporate Governance; Board Structure
3.1.7 — Protective Provisions and Other Terms

Investor Perspective: Deal Source Strategy
Kirsten Green (Founder & Managing Partner, Forerunner Ventures) discusses how to develop a deal funnel, attract/find the best deals, and advice for developing a deal sourcing strategy.

Investor Perspective: Deal Source Strategy
Aziz Gilani (Managing Director, Mercury Fund) discusses how to develop a deal funnel, attract/find the best deals, and advice for developing a deal sourcing strategy.

Life Sciences Investor Perspective: Deal Source Strategy
Otello Stampacchia (Founder, Omega Funds) discusses how to develop a deal funnel, attract/find the best deals, and advice for developing a deal sourcing strategy, from a life sciences investor’s perspective.
Note: This video is only a requirement for our Life Sciences Scholarship (LSS) recipients

Investor Perspective: Seed/Convertible Financings
Jeff Clavier (Founder and Managing Partner, Uncork Capital) reviews how investors think about debt vs. equity vs. bridge financings, his sourcing strategy for seed/convertible financings, diligence strategy, and setting up companies for success with follow-on funding.

Investor Perspective: Priced Round Financings for Early Stage Investors
Elliott Robinson ( Partner, Bessemer Venture Partners) discusses deal sourcing strategies, diligence, and future fundraising efforts for priced round financings, from an early stage investor’s perspective.

Investor Perspective: Priced Round Financings for Growth Stage Investors
Miriam Rivera (CEO, Co-Founder & Managing Director at Ulu Ventures) discusses deal sourcing strategies, diligence, and future fundraising efforts for priced round financings, from the perspective of a later/growth stage investor’s perspective.

Life Sciences Investor Perspective: Priced Round Financings
Regina Salvat (Principal, Private Equity at Sofinnova Investments) discusses deal sourcing strategies, diligence, and future fundraising efforts for priced round financings, from a life sciences investor’s perspective.
Note: This video is only a requirement for our Life Sciences Scholarship (LSS) recipients

Investor Perspective: Impact VC Financing
Joel Beck-Coon (General Counsel and Secretary, Humanity United) discusses impact VC financing and program-related investments to build sustainable enterprise ecosystems.

Investor Perspective: Venture Debt
Dax Williamson (Market Manager, Technology at Silicon Valley Bank) discusses venture lending for growth-stage investor-backed companies.

Quiz: Venture Deal Fundamentals

Weeks Seven and Eight: Modeling a Venture Capital Financing

Office hours: Dan Kidle, Managing Partner, Arboretum Ventures
Rita Astoor | Carta

This module explores examples of different types of venture financing through the use of capitalization tables.

Lectures: Modeling a Venture Capital Financing
Adam Sterling (Assistant Dean, Stanford Law School) explores examples of different types of venture financings and models those financings using capitalization tables.
4.1.1 Recap
4.1.2 Priced Round (Series A)
4.1.3 Priced Round (Series A) with Converting Securities
4.1.4 Subsequent Financing Round (Series B)
4.1.5 Down-Round (Series B)
4.1.6 Simple Acquisition (M&A)

Quiz: Modeling a Venture Capital Financing

OPTIONAL: Anti-dilution Protection
Robert Bartlett (Professor, Stanford Law School) explores how anti-dilution provisions can cause a preferred stock financing to be “re-priced” in the future.

OPTIONAL: Advanced Cap Table Topics
What happens when a company stumbles? In this session, Dan Kidle (Managing Partner, Arboretum Ventures) explores the ins and outs of a down round financing, including complex cap table mechanics. Topics covered include convertible bridge financing, mechanisms to incent continued investment from insiders, and modeling a down round financing including anti-dilution protection in Excel.

OPTIONAL: Exits
You know how many shares you own, but what are they worth? In this session, Dan Kidle (Managing Partner, Arboretum Ventures) demonstrates how to extend a cap table model to include an exit analysis. Topics covered include modeling participating and non-participating preferred stock and comparing term sheet options using Excel.

OPTIONAL: Cap Table Exercise
Students are asked to use capitalization tables for calculations. Both the blank and completed cap tables are provided for reference.

Weeks Nine and Ten: Advanced Topics in Venture Capital

Office hours: Robert Bartlett, Professor of Law, UC Berkeley
Maryam Haque, Executive Director, Venture Forward

This module highlights advanced topics in venture capital. The investor perspective conversations explore corporate venture capital, investor governance, strategies for breaking into venture, inclusion, IPOs and M&A, portfolio construction, and third-party providers.

Suggested Reading: Secrets of Sand Hill Road: Chapter 12 (“Board Members and the Good Housekeeping Seal of Approval”), Chapter 13 (“In Trados We Trust”), Chapter 14 (“Difficult Financings: When
Bad Things Happen to Good People”), and Chapter 15 (“Exit Stage Left (The Good Kind)”)

Valuation Lab
Adam Sterling (Assistant Dean, Stanford Law School) leads an interactive session on startup capital valuations. Students are asked to complete an exercise, then a follow up lecture will be provided at a later date where Adam will share his framework for startup valuations.

Public Policies Impacting the Entrepreneurial Ecosystem
From NVCA, Bobby Franklin (President and CEO) discusses the importance of public policies and their impact on venture investors and entrepreneurs and NVCA’s role in advocating on behalf of the entrepreneurial ecosystem in Washington.

NVCA Model Financing Documents
Adam Sterling is joined by Jeff Farrah (General Counsel, NVCA); Danielle Naftulin (Partner, Cooley); Jason Doren (General Counsel, ARCH Venture Partners); and Stephan Eberle (General Counsel & Head of Limited Partner Relations, Scale Venture Partners), to discuss NVCA’s Model Legal Documents.

OPTIONAL: Investor Perspective: Corporate Venture Capital with Salesforce Ventures
John Somorjai (Executive VP of Corporate Development and Salesforce Ventures, Salesforce) discusses how corporate venture capital (CVC) differs from institutional VC investing, unique opportunities and challenges for CVCs, how CVCs develop their investment thesis and sourcing strategy, and the value CVCs can bring to startups.

OPTIONAL: Investor Perspective: Corporate Venture Capital with Johnson & Johnson Innovation – JJDC, Inc.
Kadir Kadhiresan, Marian Nakada, and Ashish Xavier, vice presidents of venture investments at Johnson & Johnson Innovation – JJDC, Inc., discuss corporate venture capital and healthcare investing.

OPTIONAL: Investor Perspective: Investor Governance
Legendary venture capitalists Josh Green and Heidi Roizen discuss important governance topics from the founder/startup perspective and the VC perspective, including board composition, roles, communications, and conflicts of interest.

OPTIONAL: Investor Perspective: Breaking Into Venture Capital
A conversation with Nicole DeTommaso of Harlem Capital on how she broke into venture capital and how Backstage Capital has aligned its mission with its investment thesis to find value.

OPTIONAL: Investor Perspective: The Role of Investors and Entrepreneurs to Support Inclusion in the Community
Candice Morgan (Partner + Head of Equity, Diversity & Inclusion at Google Ventures) shares insights on the importance of inclusion and community building and advice for ecosystem builders, investors, and entrepreneurs to make an impact.

OPTIONAL: Investor Perspective: IPOs and M&A
Robert Blazej (Partner, MissionBio Capital) discusses IPOs and M&A.

OPTIONAL: Investor Perspective: Portfolio Construction
Mike Palank (General Partner, MaC Venture Capital) discusses the importance of portfolio construction.

OPTIONAL: Discussion of VC Fund Third-Party Providers with Sensiba San Filippo
Adam Sterling (Assistant Dean, Stanford Law School) hosts a discussion on VC fund third-party providers with VC University alumni, Misha Kelly (Senior Audit Manager, Sensiba San Filippo) and Fiona Wu (Senior Tax Manager, Sensiba San Filippo).

Not required for certificate eligibility

After regular office hours have concluded, a number of optional, live sessions will be scheduled for the cohort, including a networking session (featuring VC pub trivia!), and a Valuation Lab as part of Module 5. More information to be provided via the Canvas course site. Most of these sessions will be recorded.

VC University participants are given limited, complimentary access to PitchBook for three months. This access kicks off with an introductory webinar hosted by PitchBook approximately three months after the course launch date (at which point your access begins). More information will be made available through the course site.

Not required for certificate eligibility

The monthly Lunch & Learn webinars are exclusively provided to VC University participants and by invitation only. Although these are not necessary for certificate eligibility, they have been added to a separate Canvas Catalog course site, VC University Resources, for those who would like to watch the recordings. You will have access to the VC University Resources site, which also includes selected material from the course, for one (1) year.