PROFESSOR: Hello, everybody.

My name is Bill Aulet, and I'm a professor

of the practice of entrepreneurship at MIT Sloan,
and I'm your host today.
It's a real honor to welcome you to our new online course
with my co-instructors, Antoinette
Schoar, a renowned researcher and award-winning instructor
at MIT Sloan, as well as Matt Rhodes-Kropf,
also a renowned researcher, professor, and active,
successful, "built it from the ground up" venture capitalist.
Why are we doing this online course?
Well, because one of the most frequent questions
we get after someone has a viable business plan
is what about financing?
That's what we're going to hit head-on here, first,
by putting this question in the proper context which we think
is very important, and then building up
step by step so that you can understand if, when,
how, how much, and from where you need to raise the money.
Spoiler alert-- it will start with
a fundamental understanding of finance which is essential.
Not that we're going to make you into accountants,
chief financial officers, or MBAs.
Rather, we're going to give you that 20% of the knowledge which
we call financial literacy that will give you 80% or more
of the value that you really need to know to how to make
finance an integrated part of your new venture
and not a mysterious black box that you might be scared of.
There's no need for that.
We will avoid going down into proverbial rabbit hole that
is so possible with finance and keep it simple
and even fun so that you will be a much more
effective entrepreneur.
Our primary market research is clear.
There's a strong demand for this topic.
We have seen it over and over again,
and we have a great base to work from.
20 years ago, Antoinette started an entrepreneurial finance
course at MIT, which has become a pillar of what we teach all
our entrepreneurs, how to finance the company
and financial literacy.
As a measure of how important finance is,
let me put it to you this way.
Finance is the ultimate survival scoreboard.
Cash is to a business like oxygen is to humans.
Oxygen keeps the body alive.
Cash keeps a business alive.
Again, to be very clear, the goal is not to teach you
how to teach MBAs how to know more about finance.
We're not going to make anyone an MBA here.
We're not going to make anyone an accountant,
anyone a financier.
We're going to just make you successful entrepreneurs who
are financially literate.
This course is to teach entrepreneurs
what they need to know about financing
from an entrepreneur's perspective.
That is how we're going to teach.
We want you to do what you do best but understand
that financing is an important part of this whole activity
that you're undergoing here.
In this course, we will answer the questions of why
is this important to you?
How much do you really need to know?
What are the basics of financing,
that is, financial literacy?
Again, don't worry.
We're not going to overwhelm you with debits and credits
and other esoteric terms and concepts.
But if you do hear them, we'll explain what they are.
We're going to focus on the basic concepts and terms
that if you know, you will be more than fine,
and to not know them makes you look
like an incomplete entrepreneur.
So this will give you important knowledge.
You will understand what an income statement is,
what a balance sheet is, what a cash flow is, why are they
different.
Maybe you are not going to build them after this,
but you won't be afraid of them.
You will understand how to do financial projections
for your new venture.
I can hear some of you saying, wait,
why build financial five-year models?
I don't need that.
It's not going to be correct.
Let me be clear.
That doesn't mean it's a waste of time.
Stick with me.
Trust me.
I'm an entrepreneur.
I'm not going to waste anyone's time.
We'll talk very openly about what's
a reasonable financial model in the real world.
What's too much, what's too little?
How do you actually build that model and not waste time?
There's another term that's very popular
now called unit economics.
We're going to talk about what that is.
Is it important?
Spoiler alert-- it is.
Why is it so important?
What are the right perspectives for thinking about this?
The really important question that people
jump to before they've done the necessary preliminary steps
is how much money should I raise?
When should I raise it?
What are the trade-offs?
Who should I raise it from?
We will get to these questions-- don't worry--
in a thoughtful way so you will feel
much more comfortable about them than you would otherwise.
But we will also look at what makes
financing a new startup different from other things
that you already know, such as why
is financing a startup different than financing a house?
Another spoiler alert-- Matt will
explain that there are a number of reasons
why one of the biggest reasons is called milestone financing.
It's very, very important for every entrepreneur
to understand this concept.
When I got it, it really--
a light bulb went off, and I really
understood why VCs want to invest
and why they do it the way they do.
If you want to raise money from a VC by the way,
we're going to talk about how should you go about doing that.
How do I interface with them?
How do they work?
How do I prepare, launch, and execute a fundraising process
with VCs?
How should I value my company?
What are the key provisions and a term sheet?
How should I think about each of them?
How do I best negotiate a deal in a constructive way?
What comes after the term sheet?
How should we think about exit strategy,
or should we even be thinking about that?
Why is that an important thing or not?
Finally, we're going to talk about what
are the trends and directions in the future that we know today
and what we don't know.
The first principles remain whether we're
talking about ICOs, SPACs, PIPEs SAFEs, crowdfunding, Bitcoin,
Dogecoin, whatever it is.
All the first principles will remain,
and they're just different mixes of them.
And we're also going to talk about
where can you get more help.
These are some of the things we're
going to be going through, and we're
going to do it with the relevance and the rigor
that MIT is known for, what we call the mens et manus, mind
and hands.
We're very interested in rigor because that's
what makes it stand up to the test of time.
But we're also going to make sure that it's relevant,
it's something that you can put to use.
And you know what?
We're going to have some fun in this class,
if you can believe it.
Financing entrepreneurship needs to be fun.
Financing, we're going to make it as fun as possible.
I think you're going to enjoy, more
than anything else, the three different perspectives
that we're going to bring.
I am unapologetically, unabashedly an entrepreneur.
As I always say, I'm at MIT for diversity purposes.
We have a lot of intellectuals.
I'm just a "roll up the sleeves, get it done" entrepreneur.
I'm a practitioner.
I'm going to constantly push that perspective.
Not that Antoinette and Matt aren't entrepreneurs
and aren't sensitive to that, they certainly are.
But as much as I'm an entrepreneur,
these two are very well respected in their fields.
They are experts in research, and Matt
is a expert in how to build a venture capital firm.
And they're all educators as well.
All three of us are educators.
So we're going to bring an intelligent, levelheaded,
empathetic way to bring these three perspectives
to your venture creation story.
So I can't tell you how excited I am.
Antoinette is, again, unquestioned
world expert in entrepreneurial finance, doing research in it.
Matt Rhodes-Kropf, a venture capitalist who
has built his own VC firm and has gone through the bumps
and missed directions that happen in that,
and he's taught this many times.
So I don't think you're going to see that anyplace else.
So you're going to see.
We're going to go back and forth on these topics.
And we might not always agree, but if you agree you have--
if everybody agrees, you've usually got too many people
in the room.
So it should be really fun, and you're
going to see that it's fun for us.
And I hope you're really going to enjoy it.
I'm very excited about this course
because Matt and Antoinette are very, very knowledgeable.
And we're all instructors.
We all have that same perspective.
Our goal is not just to put some interesting knowledge
into your head for knowledge sake.
Yeah, we will do that.
But it's to convey it in a way where
you can go apply it tomorrow to your business
to make it more scalable, more impactful, more sustainable.
For God's sakes, we need more entrepreneurs in the world,
and this course will help you be one of them.