Advanced Valuation and Strategy - M&A, Private Equity, and Venture Capital from Coursera

Hi and welcome to this course!

Would you like to learn about the latest valuation methods that may help you to make better business decisions? Then 'Advanced Valuation and Strategy – M&A, Private Equity, and Venture Capital' by Erasmus University Rotterdam is the right course for you! This course is helpful for executives that need to value complete strategies and for all students interested in corporate finance and strategy. We present the latest tools and show you how to apply them!

We will revolutionize your way of decision making, by extending static techniques from corporate finance with dynamic methods to quantify strategic thinking. Traditionally, we assess the attractiveness of an investment as a mature business, where future cash flows mainly result from past decisions. But, in an ever-changing world, strategic decisions determine the firm’s long-term success and market value. Yet managers often have to consider these long-term implications using intuition and experience alone, with little guidance from structured, quantitative analysis.

Our treatment goes far beyond the use of standard valuation analysis. We introduce the expanded NPV, which brings together DCF, real options, and game theory. Thinking in terms of options, games, and adaptive strategies may help managers address strategic questions such as: How do you value a leveraged buyout? How can you value a high-tech venture with negative cash flows? When should you invest in new ventures in stages? How can you incorporate rival bidders in the analysis?

The tools we provide can improve your decisions in business and in daily life.

* Who is this class for?

We hope that our course appeals to (graduate) students in finance, economics, and business, as well as to high-ranking professionals and a general audience. This course is particularly interesting for venture capitalists, private equity investors, investment bankers, CEOs, CFOs, and those who aspire these affiliations. We offer this MOOC at 3 levels:

1.Executive Summary:

This 1-week module provides critical insights into the principles of corporate valuation and strategy. This is accessible for time-constrained executives and the general audience without any prior knowledge.

2. Student Level:

This level involves an understanding of the technical details. This level requires basic knowledge of concepts in corporate finance, e.g., the time value of money, financial statement analysis, capital structure, and the relation between risk and returns. Learners of this level can skip week 1.

3. Honors Level (honors certificate):

This level is challenging, engaging, and compelling to an intellectually rigorous student.

What's inside

Syllabus

Executive Summary

Welcome! My name is Han Smit, I am Professor of Corporate Finance at Erasmus School of Economics. I will be your lecturer, and together with my team, Dyaran Bansraj and Nishad Matawlie, we are going to take you on a fascinating journey that may change the way you make strategic investment decisions. This executive level course consists of a series of accessible animation videos. Step by step we develop the conceptual frameworks and new valuation principles for strategic investments that are difficult to value with traditional tools. These new valuation methods can be particularly interesting for venture capitalists, private equity investors, investment bankers, CEOs, and CFOs. This executive level course is meant for those who want to be updated on the latest insights in corporate strategy and valuation techniques. You can walk through the fundamentals of the course in less than a week! If you wish to follow the student level, you can skip this week (don't worry, you won't miss out on anything)!

Discounted Cash Flow Analysis

We show you how to apply DCF approaches and provide case applications illustrating the powerful potential of this valuation methodology. We consider historical analysis, the estimation of free cash flows, various DCF approaches, and multiples valuation. In the assignments we consider specialized topics such as the valuation of leveraged buyouts. After this module you will be familiar with DCF approaches and will be able to relate them to strategy.

Corporate Strategy

This module closes the gap between traditional corporate finance and strategic planning by linking corporate strategy to the market value. We can assess the value of a company through the expanded NPV criterion, which is able to capture the value of the firm's growth options. We review various strategic paradigms that analyze the underlying sources of this growth option value, focusing on industry analysis, firms' internal resources and dynamic capabilities. After this module you will be able to recognise the strategic growth option value in the market value of a company.

Corporate Real Options

This module reviews the basic concepts and valuation principles of real options. Real options theory quantifies decision making under uncertainty and stresses the importance of wait-and-see flexibility, suggesting that managers should wait until major uncertainties are resolved and the project is more clearly beneficial. Since it recognizes that investments tend to be sequentially related over time, real options analysis is particularly suitable for valuing strategies in addition to isolated projects. After this module you will be able to quantify the flexibility component of the strategic growth option value. This is an important capability when valuing high-tech companies.

Option Games

This module provides an overview of the basic principles of game theory, which are essential for our understanding of strategic decisions. Strategic investment decisions are often made in a context in which decision makers must consider the deliberate (re)actions of rivals. Combining real options with games helps us to understand competitive behavior under uncertainty. Practical examples of option games include: competitive bidding in acquisitions and new product development decisions (in car manufacturing, mobile phones and consumer electronics). After this module you will be able to quantify the strategic component in the strategic growth option value. This is important for understanding strategic decisions of companies with high growth option value.

Good to know

Know what's good

, what to watch for

, and possible dealbreakers

Develops strategic thinking through the application of corporate finance principles

Presented by renowned instructors in the field of corporate finance

Suitable for high-ranking executives, venture capitalists, investment bankers, and students

Provides an in-depth understanding of valuation methods beyond traditional DCF

Offered through the prestigious Erasmus University Rotterdam

Requires foundational knowledge in corporate finance for the student level

Reviews summary

Advanced valuation with real options and game theory

Learners say this course offers a thorough grounding in advanced valuation strategies, including real options and game theory. The video lectures by Professor Han Smit are widely praised as clear and engaging. Students particularly appreciate the practical, real-world examples and case studies that help them understand and apply the concepts. The course materials and readings are also highly regarded. The quizzess are challenging but fair, and provide valuable feedback and opportunities for students to test their understanding. Overall, this course is highly recommended for learners with a strong background in finance and valuation who are looking to expand their knowledge and skills.

The course is well-structured and provides a logical progression of topics.

"The course materials and readings are also highly regarded."

"Overall, this course is highly recommended for learners with a strong background in finance and valuation who are looking to expand their knowledge and skills."

While the course is demanding, the effort is rewarded with a deep understanding of advanced valuation techniques.

"This course has amazing value for its price."

"The course is rigorous; but because of the videos, and if you “do your work” (as the Professor says in one of the videos), you will successfully understand the content and how to apply it."

"The quizzess are challenging but fair, and provide valuable feedback and opportunities for students to test their understanding."

The course covers a range of advanced valuation strategies and provides practical examples and case studies.

"Lots of topics covered in a very simple and comprehensive manner."

"I am quite impressed by this course. ...Challenging sometimes and going deeper in some evaluation methods."

"The course provide a broad vision of the subject and it is essential to have previous corporate finance knowledge."

"You will still have to supplement the videos with reading and/or online research."

Professor Smit's engaging and clear lectures make complex concepts accessible.

"Professor Hans Smit managed to pack a lot of content into only about 3 hours of videos."

"The Professor’s explanations, plus the practice exercises... were enough."

Some learners have felt that the course assumes prior knowledge in certain areas.

"I felt that while this course is overall very helpful and well structured, it assumes pre-acquired knowledge about some things on part of the student."

A few learners have noted that the course could benefit from more real-life applications of the concepts.

"I think the course is based on an interesting premise of incorporating real growth options and game theory in the valuation, but I have been slightly disappointed as I consider the applicability limited."

Some learners have experienced issues with rounding errors in the quizzes.

"The quizzes can be infuriating, because of the rounding criteria – you will get all the exercises right, but the application will rate you with a lesser score, because your rounding is different from the rounding of the instructor."

Activities

Be better prepared before your course. Deepen your understanding during and after it. Supplement your coursework and achieve mastery of the topics covered in Advanced Valuation and Strategy - M&A, Private Equity, and Venture Capital with these activities:

Volunteer at a local nonprofit organization that focuses on financial literacy or economic development.

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Volunteering at a local nonprofit organization can provide you with the opportunity to apply your knowledge and skills to real-world problems and make a positive impact on your community while also reinforcing the concepts learned in the course.

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Research local nonprofit organizations that align with your interests.
Contact the organization and inquire about volunteer opportunities.
Attend a volunteer orientation and training.
Participate in volunteer activities that align with your skills and interests.

Review foundational knowledge of corporate finance

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Reviewing foundational knowledge of corporate finance will prepare you for the advanced concepts you will learn in this course.

Browse courses on Corporate Finance

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Review the time value of money.
Review financial statement analysis techniques.
Review capital structure theory.
Review the relationship between risk and return.

Read Aswath Damodaran's 'Investment Valuation'.

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This book provides a comprehensive overview of the principles and techniques used in investment valuation, which will be essential for understanding the advanced valuation methods covered in this course.

View Investment Valuation on Amazon

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Read the chapters on discounted cash flow analysis.
Read the chapters on real options.
Read the chapters on game theory.

Three other activities

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Complete the practice problems on the course website.

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Completing the practice problems will help you to reinforce the concepts you learn in the course and improve your problem-solving skills.

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Attempt the practice problems on discounted cash flow analysis.
Attempt the practice problems on real options.
Attempt the practice problems on game theory.

Join a study group or mastermind group related to the topics of the course.

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Joining a study group or mastermind group can provide you with a supportive environment in which to discuss the course material and learn from your peers.

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Find a group that is a good fit for your learning style and schedule.
Participate actively in the group discussions.
Share your knowledge and expertise with other group members.

Develop a valuation model for a startup.

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Developing a valuation model for a startup will help you to apply the concepts you learn in the course to a real-world scenario.

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Identify the key financial drivers of the startup.
Estimate the future cash flows of the startup.
Choose an appropriate valuation method.
Calculate the valuation of the startup.
Write a report summarizing your findings.

Career center

Learners who complete Advanced Valuation and Strategy - M&A, Private Equity, and Venture Capital will develop knowledge and skills that may be useful to these careers:

Chief Executive Officer (CEO)

Chief Executive Officers (CEOs) are responsible for the overall success of their companies. This course may be useful for those aspiring to become CEOs as it provides a comprehensive overview of the valuation methods and strategic paradigms that are used in the corporate world. The course also covers topics such as real options and game theory, which are essential for understanding the strategic decisions that CEOs make when leading their companies.

See salaries and explore the career path for Chief Executive Officer (CEO)

Investment Banker

Investment Bankers provide advice to corporations and governments on mergers and acquisitions (M&A), public offerings, and other capital-raising transactions. This course can be a valuable resource for anyone seeking a career in Investment Banking. The course provides an overview of the latest valuation methods that are used in the industry. It also covers topics such as corporate strategy, real options, and game theory, which are essential for understanding the strategic decisions that companies make. With this foundational knowledge, learners will be well-prepared to enter the competitive field of Investment Banking.

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Quantitative Analyst

Quantitative Analysts use mathematical and statistical techniques to analyze financial data. This course may be useful in gaining a deeper understanding of the statistical and mathematical techniques that are used in quantitative analysis. The course also covers topics such as real options and game theory, which are essential for understanding the strategic decisions that quantitative analysts make when analyzing financial data.

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Portfolio Manager

Portfolio Managers make investment decisions for their clients. This course may be useful in gaining a deeper understanding of the valuation methods and strategic paradigms used in the portfolio management industry. The course also covers topics such as real options and game theory, which are essential for understanding the strategic decisions that portfolio managers make when evaluating potential investments.

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Chief Financial Officer (CFO)

Chief Financial Officers (CFOs) are responsible for the financial health of their companies. This course may be useful for those seeking to become CFOs. The course provides instruction in the principles of corporate valuation and strategic planning. It also covers the methodologies used for assessing market value growth option value. However, it is important to note that the course does not teach all the knowledge and skills necessary to work as a CFO.

See salaries and explore the career path for Chief Financial Officer (CFO)

Venture Capitalist

Venture Capitalists invest in early-stage companies with the goal of generating a return on investment. This course may be useful in gaining a deeper understanding of the valuation methods that are tailored to valuing such companies. The course also covers the strategic paradigms used in the venture capital industry, which are essential for understanding the strategic decisions that venture capitalists make when evaluating potential investments.

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Economist

Economists study the production, distribution, and consumption of goods and services. This course may be useful in gaining a deeper understanding of the economic principles that are used to make investment decisions. The course also covers topics such as real options and game theory, which are essential for understanding the strategic decisions that economists make when analyzing economic data.

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Researcher

Researchers conduct studies to gain new knowledge. This course may be useful in gaining a deeper understanding of the research methods that are used in academia. The course also covers topics such as real options and game theory, which are essential for understanding the strategic decisions that researchers make when designing their studies.

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Financial Risk Manager

Financial Risk Managers are responsible for identifying and managing financial risks. This course may be useful in gaining a deeper understanding of the valuation methods and strategic paradigms used in the financial risk management industry. The course also covers topics such as real options and game theory, which are essential for understanding the strategic decisions that financial risk managers make when evaluating potential risks.

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Management Consultant

Management Consultants provide advice to companies on how to improve their performance. This course may be useful in gaining a deeper understanding of the valuation methods and strategic paradigms used in the management consulting industry. The course also covers topics such as real options and game theory, which are essential for understanding the strategic decisions that management consultants make when evaluating potential clients.

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Data Scientist

Data Scientists use data to solve problems and make predictions. This course may be useful in gaining a deeper understanding of the statistical and mathematical techniques that are used in data science. The course also covers topics such as real options and game theory, which are essential for understanding the strategic decisions that data scientists make when analyzing data.

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Private Equity Investor

Private Equity Investors invest in private companies with the goal of generating a return on investment. This course may be useful in gaining a deeper understanding of the valuation methods and strategic paradigms used in the private equity industry. The course also covers topics such as real options and game theory, which are essential for understanding the strategic decisions that private equity investors make when evaluating potential investments.

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Chief Strategy Officer (CSO)

Chief Strategy Officers (CSOs) are responsible for developing and executing their companies' strategies. This course may be useful for those seeking to become CSOs, as it provides instruction in the principles of corporate valuation, strategic planning, and assessing market value growth option value. However, it is important to note that the course does not provide all the knowledge and skills necessary to work as a CSO.

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Financial Analyst

Financial Analysts make recommendations on investment strategies. They provide financial guidance and assist companies in making wise financial decisions. This course may be useful as it provides instruction in the principles of corporate valuation and various related strategic paradigms that analyze the underlying sources of market value growth option value. However, it is important to note that this course does not provide all the knowledge and skills necessary to work as a Financial Analyst.

See salaries and explore the career path for Financial Analyst

Corporate Development Analyst

Corporate Development Analysts evaluate and execute strategic transactions for their companies. This course may be useful as it provides instruction in the principles of corporate valuation, strategic planning, and assessing market value growth option value. However, it is important to note that this course does not provide all the knowledge and skills necessary to work as a Corporate Development Analyst.

See salaries and explore the career path for Corporate Development Analyst