In Class with a Venture Capitalist

Bring a venture capitalist into the classroom. Add 19 real projects for potential investment. This is a big responsibility for students in the course "Venture Capital and Valuation," part of the Master of Science in Economics and Management of Innovation and Technology, who are asked to analyze the projects and provide the investor with the tools to decide where his resources should be directed.

Venture capitalists are a unique kind of investor. They do not simply give money to a business that should be paid back with interest over an established timespan, the way banks do. On the contrary, they donate only part of the investment and the rest is given later on, after specific goals have been achieved. Laura Bottazzi, who is one of the course's two Supervisors along with Emanuele Teti, explains, "They are active investors, who bring not only money to a company but also their know-how." And, when things are not going well, they may even take control of the company's board. "This is why the investor-entrepreneur contract relationship is very delicate."

Divided into 19 groups of 6 students each, each group focuses on a different case submitted by the venture capitalist. "The students are asked to examine the projects, establish whether they are competitive, the quality of the products, how to get consumers to approach the products and other variables. This is all online with the support of a consultant," says Bottazzi. And it's not easy. "They had to apply more than what was studied in the classroom," she continues. "For example, the contract is extremely delicate, because of the implications it has both for the investor and the entrepreneur. In general, students may not be fully ready to contend with real cases, but this method of learning by doing is fundamental."

Students indeed appreciated this experience, as Gaia Donini, a 22-year-old Bologna native explains: "It opened doors to a world I wasn't familiar with, to be able to deal with innovative startups. My group's case was a company involved in the healthcare field and it was a very exciting experience, something that I would like to do again." Andrea Codovini, 22, from the Umbria region, agrees: "The fund managed by the venture capitalist we met invests in the biomedical sector, in itself very technological and innovative, and with the added value of being highly emotional. You therefore have the feeling you're helping someone do something very important. But the value of this new teaching method lies in the chance it offered us to deal with actual cases, providing practical implications to what we have studied."