"Seasoned investors will focus first on the quality of the management team they are backing and on the nature of the opportunity under consideration. Only after the fundamental decision to invest has been made will the investor turn to the issue of valuation." — William A. Sahlman
This masterclass distills MGT 6639 — Entrepreneurial Finance, taught by Professor Berk Sensoy at Vanderbilt Owen in the Mod 3 2026 term — into one continuous, decision-oriented field manual for every step of the funding life cycle. It synthesizes the canonical readings (Sahlman's How to Write a Great Business Plan, the Venture Capital Method, Financing New Ventures, the Convertible Notes in Seed Financings deck, and Founder.org's Eight Dimensions framework), the five class cases (Technical Data Corp, Lovepop, Iron Gate Technologies, Avid Radiopharmaceuticals, and the Tempus AI Unicorn Project), and the four deliverables Gabriel's group submitted: the TDC business-plan writeup, Capitalization Tables Question 4 (Lovepop), the Irongate Analysis + Insightful Questions, and the Tempus AI deep dive that closed the course.
The aim is the same as Sahlman's: not to memorize formulas but to ask better questions about People, Opportunity, Context, and the Deal — and to be able to walk into a Bellwether or a Trident or a NEA boardroom and trace the cap table by hand on a whiteboard.
Read in order if you have never priced a round. Skim if you already understand pre/post-money mechanics and want only the worked deliverables. Each module ends with cheat sheets and common mistakes; each case is anchored to a tool you can re-use immediately on a real deal.
The 11 modules are paired so that every concept module is followed by a case that puts the concept under load:
| Module | What it builds |
|---|---|
| 1 — Foundations | Why entrepreneurial finance is its own discipline; the debt-vs-equity mapping |
| 2 — POCD + TDC | Sahlman's discipline for evaluating ventures; Gabriel's group TDC writeup as the worked example |
| 3 — VC Method | The five-step valuation engine and why discount rates run 50–80% |
| 4 — Pre/Post-Money Math | Ownership, dilution, share price, fully diluted valuations |
| 5 — Cap Tables | Founders, options, preferred stock, and tracking who owns what |
| 6 — Convertibles & SAFEs | Discounts, valuation caps, and the "unpriced" round |
| 7 — XFC: How Much to Raise | Slack vs. dilution; the value-accretion-milestone test |
| 8 — Lovepop | Three competing seed offers, traced cap-table-by-cap-table (Gabriel's Q4) |
| 9 — Iron Gate + Term Sheets | Trident's $3.185M term sheet, Gabriel's full analysis, and the milestone-hostage problem |
| 10 — Venture Debt + Tempus AI | Avid Radiopharmaceuticals; Tempus AI as the unicorn end-state |
| 11 — Master Playbook | The cross-module diagnostic kit: every check before you sign |
Everything in this course rotates around four ideas. Each module explains them from a different angle — the modules are not independent essays.
1. Treat the venture as a series of experiments. Sahlman's most quoted line. The business plan, the term sheet, the milestone tranche, even the option pool — all of these are mechanisms for staging risk. Whenever a deal term feels arbitrary, ask: which experiment is this protecting?
2. Risk is not the same as uncertainty, and capital sources price them differently. Debt prices downside, equity prices upside. The Kerr-Nanda framework (capital intensity × uncertainty) tells you which quadrant you live in before you decide which investor to court.
3. The cap table is the contract. Pre-money, post-money, dilution, conversion price, liquidation preference — these are not accounting entries; they are the operational consequences of every deal you signed. If you cannot draw the cap table at every stage, you do not actually understand the deal.
4. Valuation is a question, not an answer. Every present value is a hypothesis. The VC method's job is not to produce a "right" number but to make the assumptions visible enough to be argued about.