This chapter addresses ESG (environmental, social, and governance) requirements as they affect privately held investments. ESG has a complex and lengthy history in financial markets, stretching back to 2004, when the UN Global Compact published a report titled Who Cares Wins.

This landmark report called for the ‘better inclusion of environmental, social, and corporate governance (ESG) factors in investment decisions’ as investors, companies, regulators, and policymakers sought to grapple with a changing world shaped by a looming climate crisis, rampant social issues, and structural economic concerns.

This chapter explores deep tech investing, a field gaining traction for its pivotal role in developing pioneering academic research into impactful, widely adopted technologies responsible for driving social change, such as the microwave, RNA vaccines, mobile phones, and batteries.

Deep tech companies are characterized by extended periods of development due to the complex nature of their R&D efforts, often resulting in highly defensible differentiation of their product or service. A relevant aspect for both deep tech founders and investors that we will address is a checklist of possible business model challenges that need to be anticipated.

In this chapter, we explore crowdfunding as a valuable means of providing early funding and support for aspiring entrepreneurial ventures. Crowdfunding has emerged as an innovative source of early funding and support for entrepreneurial ventures, particularly in the early 2000s, coinciding with the rise of online crowdfunding platforms. This new avenue to financing allows entrepreneurial ventures to reach a larger pool of potential small investors, fostering financial growth and providing valuable resources for entrepreneurs’ business development. By examining the concept of crowdfunding, we aim to highlight the potential benefits for early-stage entrepreneurs. We will also explore the underlying aspects of crowdfunding in greater detail, comparing it to traditional fundraising methods. As will be evident, this method of funding is part of the broader strategy of obtaining funding (i.e., the ‘art’) that complements the more technical aspects (i.e., the ‘science’) of growing ventures.

This chapter introduces you to the concept and practicalities of intellectual property (IP): what it is and why it can be of importance to your new business venture. IP will be at the heart of most businesses and it is a key element in achieving competitive advantage, enabling cash flow, and justifying value. Sometimes it takes considerable financial investment to generate and develop IP; some types of IP can cost a great deal of money to protect; some types of IP protection are very low-cost. All in all, IP is a very important element in the finances of a new and growing business and management needs to understand the key issues surrounding the decisions that will need to be made.

In this chapter we will delve into the technical aspects of financial planning for a startup. A financial plan is the starting point of any financial strategy. Its first purpose is to realize whether the venture will have an external financing need and, if so, how much financing it will need and when. Next it will serve as the basis for the valuation of the venture. Third, and probably most importantly, the plan will give the entrepreneur and potential investors the means to critically assess and optimize the business model.

This chapter opens with perhaps Sir Nicholas Goodison’s last interview on reform of the London Stock Exchange in which he reflected at length on his role and legacy. It explores the struggles of key individuals to formulate and sell a reform agenda and considers how modernising reforms were shaped by embedded habits, traditions and rules. Stressing continuities as well as change in the City, it describes the ongoing importance of relationships forged on the Stock Exchange floor and also highlights the enduring role of City clubs (where several interviews for the book took place). They helped to maintain an old order during uncertain times, for instance by vetting the credentials of newcomers. Using the new Douglas French Archive, the chapter also casts light on relationships between the City and government; shows how practitioners and enterprises understood the opportunities and threats they faced; and how practitioners sought to shape reforms. A mini case study of Barclays Bank explains its foray into integrated investment banking, while a focus on Warburg and Greenwell’s shows how the distinct cultures of these famous firms shaped their particular Big Bang strategies and the City more generally. Shining a light on the dynamic reform process, and the way it was shaped by networked individuals and embedded culture and practices, counters narratives of inevitability and underscores the historically specific nature of neoliberal reforms.

In this chapter, you will be walked through the concepts of venture capital and private equity funds, helping you to understand how they operate, who invests in these funds, and, most importantly, how they make money and why this is important for entrepreneurs.

Venture capital and private equity funds have emerged over the past decades as ideal vehicles for channelling private and public money into the financing of innovation. Since the creation of the American Research and Development Corporation (ADRC) in Boston in 1946 by French immigrant George Doriot, considered to be the first venture capital firm, the industry has evolved to provide risk capital to innovative entrepreneurs in a model that has barely changed and is adapted to the particularities of the underlying asset: startup companies.

This chapter considers the challenges and benefits of developing a proper corporate governance structure and policy while expanding as a venture. Although the public debate over corporate governance seems to focus on public companies, an effective governance structure is equally important for startups and private companies. In fact, given the stronger link between the financing and investment decision in startups as compared to public companies, the question of how to structure agreements between investors and entrepreneurs that ensure that their own benefits and responsibilities are met is particularly relevant.

This chapter considers the challenging yet exciting world of valuing companies. Valuation has always been a key topic in finance, but it is even more relevant in the case of high-growth ventures because of its impact on raising capital. Equity is the main source of financing for startups, which typically have high potential and few tangible assets. In order to come to an assessment, founders and investors need to determine the value of the business or ‘exchange rate’ of money for shares.