Class 21: Financing innovation
Locating a profit site is one thing. Obtaining the money to finance the project or venture can be quite another. In this session, the sources of financing, the reasons why it may be so difficult to obtain financing for entrepreneurial activity, and the remedies for these problems (e.g., venture capital) are explored. The discounted cash flow (DCF) approach to financing innovation is contrasted with the options approach. Chapter 10 provides a systematic treatment of these topics. The case illustrates why in seeking financing for innovation, the primary criteria may be a lot more than low cost money.
Reading: Chapter 10
Case: Thermo Electron Corporation (HBS)
(1) Should Thermo Electron Corporations issue the IPO for Thermo Electron Technologies?
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