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

Go to Course: https://www.coursera.org/learn/advanced-valuation-and-strategy

Introduction

**Course Review: Advanced Valuation and Strategy - M&A, Private Equity, and Venture Capital** In today’s rapidly evolving business landscape, understanding complex valuation methods and strategic decision-making is more critical than ever. The course titled **"Advanced Valuation and Strategy - M&A, Private Equity, and Venture Capital,"** offered by Erasmus University Rotterdam and led by Professor Han Smit, provides a comprehensive examination of essential valuation techniques that cater to professionals in fields such as corporate finance, private equity, and venture capital. I highly recommend this course for anyone looking to enhance their decision-making skills in strategic investments. ### **Course Overview** At its core, this course is designed for executives and students eager to sharpen their understanding of corporate finance and strategy. The course offers an array of accessible animation videos that break down complex concepts into digestible segments, allowing learners to absorb information efficiently. Professor Smit and his team, Dyaran Bansraj and Nishad Matawlie, guide participants through crucial valuation methodologies that go beyond traditional tools, making it especially valuable for those involved in high-stakes financial decision-making. ### **Syllabus Breakdown** **1. Executive Summary** The course begins with a warm welcome from Professor Smit, who lays the groundwork for an engaging course experience. He emphasizes the importance of updated insights in corporate strategy and valuation techniques, making it a must for professionals aiming to stay at the forefront of their fields. With flexibility in mind, the course structure allows you to grasp the fundamentals in just under a week—or skip ahead if you prefer a more advanced pace. **2. Discounted Cash Flow Analysis (DCF)** The first significant section dives into DCF approaches, which are pivotal for assessing the viability of investments. The module explains how historical analysis and free cash flow estimation can lead to more informed investment decisions. Case applications make this module particularly practical, especially for investment bankers and private equity investors looking to apply DCF methodology in real-world contexts. **3. Corporate Strategy** In this module, the linkage between corporate finance and strategic planning is explored through the expanded NPV criterion. The course analyzes various strategic paradigms, enabling learners to recognize the inherent value of growth options in the market value of firms. This knowledge is indispensable for CEOs and CFOs when evaluating potential investment strategies. **4. Corporate Real Options** This transformative module introduces real options theory, allowing students to appreciate the nuances of decision-making under uncertainty. By emphasizing the importance of flexibility and sequential investments, this section empowers managers to think critically about their project portfolios, a necessity when valuing high-tech companies. **5. Option Games** The final module introduces game theory principles, vital for comprehending competitive strategic decisions. By incorporating real options with game strategies, the course evaluates competitive behavior, preparing learners for the complexities of the business environment. The practical examples included, such as competitive bidding and product development strategies, illustrate how theoretical concepts apply to real-world scenarios. ### **Conclusion and Recommendation** Overall, **"Advanced Valuation and Strategy - M&A, Private Equity, and Venture Capital"** is an exceptionally well-crafted course that merges theoretical knowledge with practical skills. It is especially beneficial for executives and finance professionals seeking to refine their strategic investment decisions using state-of-the-art valuation methods. The interactive and animated presentation style aids in retention and understanding, while the comprehensive content unlocks valuable techniques that can be directly applied in various professional settings. If you are serious about enhancing your corporate finance and strategic capabilities, this course is not to be missed—enroll today and transform the way you approach valuation and strategy!

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)!

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.

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.

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.

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.