Industry + Academia => Professional Education

By John D. Evans, CFA, Founder & General Manager, SEIML

It has been an interesting career to date. I have been fortunate to work and live in many locations from America to Europe to the Middle East and now in Asia. It has also been diverse from investment banking to academia and now to start-ups and venture capital. But there has always been one constant, mixing industry with education. 

Business and finance at universities focus on core knowledge and theoretical research, a more advanced version of the high school curriculum. Whereas when entering industry there is a lot of practical knowledge and training, often company specific, that requires on-the-job training. Large companies have the resources for this internal training, but frequently small and medium sized companies don’t. I had an interesting experience starting in 2004 when at a UK university. The finance department had a relationship with a banking trade organisation and decided to create a suite of very applied financial markets courses for the investment banking industry, in particular the small and medium-sized firms. It was a tremendous success, and we covered topics from repo markets to commodity derivatives to equity derivatives, the whole suite of financial products that you would rarely find in a university curriculum (as the Publisher of this magazine might remember from his Euroclear days). From that I came to the conclusion that there was a real need for good, applied professional education, at least in the financial industry. I actually wrote about this experience in FinanceX back in July 2024 after just moving from Shanghai.

I have now been in Hong Kong for just over a year and believe I have found a new market niche for professional education – finance for Founders of start-ups. I have been involved with several incubators and accelerators, but none so far provide in-depth finance training, which is essential to do a valuation of your company and negotiate with investors.And raising capital is something almost all start-ups need to do sooner rather than later. In this regard, I have created the Corporate Finance for Founders Course (CFFC) with the first offering December 4 of this year. I have taken guidance from one of the first sessions in the Founder Institute Core Program, which starts with finding a real, market need and this is my assessment here:

• Raising capital is critical for most Founders but they frequently are from non-finance backgrounds (IT, healthcare, etc.)

• Founders often don't have much money and cannot afford to hire expensive investment bankers

• Corporate finance is also very difficult in the judgement category when you are very early stage; how do you use a DCF model to value a company that is pre-revenue?

The last point proved a learning experience for me. I had taught many courses on public (listed) equities and derivatives. But the early stage, private equity market is a whole different world. No liquid secondary market for an easy exit, no stated dividend policy to help forecast future cash flows and less substantial reporting by the company itself. Founders and VC investors face a very serious challenge in analysing early-stage companies. This, in itself, is another reason why early stage investing is so risky. I learned a lot in my university and CFA programmes. But in academia finance often doesn’t get into the ‘messy’ details we have to deal with in the market (like valuing a pre revenue company). However, one positive I did take away from academia is the case study approach, a great way to deal with real-world situations. So, we will take a three-stage approach in our one-day course.

• A fundamental valuation model – this is from the academic literature that I believe is necessary to use as a starting point

• Company life-cycle – seeing how we apply our model to companies at different stages of development (pre revenue, launched but not yet profitable, to profitable companies)

• Founder company case study – where each Founder will try to apply the previous knowledge to value their own company and present to the group at the end

We believe this meets a real need by Founders as early stage companies are in need of real finance training to be successful at raising capital. As an aside, our Guest Speaker will supplement the finance in this course with a brief section on ‘legal and docs’. You can never avoid the legal work.

This course will be part of a new effort to provide corporate finance services to Founders via our company and the new AI platform we are creating that will allow us to do this work for Founders, quickly and effectively. But whether the Founder hires someone to help them with a raise or tries to do it themselves, they need to understand the whole process so they can effectively present and defend their projections and valuation.

We all have different interests. Mine is corporate finance and combining theory and practice to apply and disseminate that knowledge far and wide in industry. We proved before there was a real need for financial training in the investment banking world. My sense is that there is an equal or potentially larger need in the start-up world.

Further information:  https://seiml.com/courses/