454 - Financing the Energy Transition
Core/Elective: Elective
Credits: 0.5
Quarter Taught: Fall
Synopsis:
The course is designed principally to address the interests of students who expect to embark on a career either as an investor (VC, PE) or as a leader (business, government or non-profit) with finance or fundraising responsibilities. Considering the time constraints associated with a half- unit course, the curriculum is confined to key fundamentals of financial markets as they pertain specifically to energy & sustainability. The course will touch upon a range of concepts, tools and content including finance, accounting, and investing fundamentals. The instructor will attempt to identify “best practices” in today’s high growth energy marketplace. Students completing the course will have a solid understanding of the questions and issues that typically face businesses seeking capitalization in the energy sector.
Course Objectives:
This is a pragmatic course that will cover several areas relevant to financing the energy transition. by the end of the course, students should be able to:
- Understand the magnitude of change and investment required to realize the vision of the “energy transition;”
- Identify sources of financing today, as well as some specific details about trends in energy finance;
- Recognize primary agents in various types of private capital (friends & family, angel investors, venture capital, private equity, infrastructure funds, family offices, etc), their objectives, and the pros and cons of each; and
- Understand key considerations and how they vary by investor type (institutional investor, PE, VC), including: 1/ Valuation methodologies and how they vary by investor type, 2/ Typical investment terms found in the term sheet and the dynamics of negotiation between the business and the venture capitalist or PE investor, 3/ Compensation (cash, equity) for principals and investors, and 4/ Corporate Governance including the importance of control and board seats.