Fall 2014
    Law No.: LAW7606
    Sched. No.: 114820991

Finance of Small Enterprise (SC)
Section 1
Crawford, Richard D.

Administrative Information:
During SIS enrollment, check on SIS for real-time enrollment numbers
Days, Times (Room):R, 1600-1800 (WB105)
Credits:2Type:Lecture - short course
Capacity:30 **This information is current as of 05/29/2015 06:15:08 AM**
Current Enrollment:29 **This information is current as of 05/29/2015 06:15:08 AM**

Course Description:

Over 99% of the businesses in the United States are defined by the Small Business Administration as small businesses and the small business sector accounts for over half the U.S.’s GNP and employment. Almost all small businesses are private companies and their financing needs and options are substantially different from the needs of large public companies that are the subject of most law school courses dealing with business law and business finance. This course deals with the business and legal issues that arise in financing a small business from its startup to an eventual exit of the founder through a sale or IPO. This course is from the perspective of small business senior management and deals with the range of financing options and the pros and cons of each as a business is started and grows. The course is designed to provide the student with a better and broader understanding of the financing needs of the small business clients that they will serve in practice so that more effective legal advice can be provided.

The course will examine a range of business types from small manufacturing companies to emerging growth technology companies to service companies and will examine the differences between the different categories from a financing perspective including the differences between pre-revenue and post-revenue companies in each category. There will be particular emphasis on the different financial options available to each category of business at different stages in its life cycle including bank loans, commercial finance and factoring, leasing, commercial mortgages, angel equity financing and venture capital and the terms that normally are associated with these different types of financing. This examination of financing options will include an analysis of the risk associated with different financing options and an analysis of how different financing options can be connected in an overall financing strategy. In addition, the course will cover the valuation of businesses for financing purposes and the different types of valuation techniques.

The course will provide an introduction to this area through the eyes of a law school graduate who has been active in financing small businesses for 35 years as a banker, entrepreneur and most recently as the manager of a well-established angel group based in Charlottesville, Virginia with members throughout Virginia and the U.S. The course will include case study exercises designed to introduce students, working in teams, to the issues facing senior management of small companies as they seek to raise financing at various stages of their company life cycle. Guest lecturers will play an important role in this class and will provide students with a real-world perspective on the reality of entrepreneurs trying to finance their small businesses. During the course, guests will include both lawyers practicing in various areas of small business finance and law school graduates who, as small business CEOs, have successfully raised capital through a range of financing types.

ATTENDANCE REQUIREMENT: Enrolled students who do not attend the first class session will be dropped. Students seeking to enroll in this course must attend the first class session.
PREREQUISITE: Accounting and Corporate Finance or the equivalent strongly recommended, but not required. Corporations or Corporations (Law & Business) recommended, but not required.
COURSE REQUIREMENT: One short in-class presentation for each student as part of a larger group presentation on a business financing problem during the basic course and one end of course research paper on subject selected by student (with instructor’s approval). Paper subject must have some general relationship to topic of small business finance. In lieu of standard research paper, students can complete a due diligence of a real small company seeking financing or participate in the Law School’s fall Concept Competition run by the E*Society. These two alternatives to a research paper are intended to provide real world experience to the student and allow them to utilize the principals and techniques studied during the course’s formal classroom work.

Prerequisites:Accounting and Corporate Finance or the equivalent strongly recommended, but not required. Corporations or Corporations (Law & Business) recommended, but not required.
This course is on the professional skills course list.