Module - Entrepreneurial Finance

Entrepreneurial Finance - From controlling performance to anticipation & management of exit

Leader: Budapest Business School
150 pages training material in traditional form (with practical exercises, case studies, recommended reading, etc.) and at least 8 hours online e-learning part divided into submodules.

This module aims at providing significant assistance in the financing and transition of Family Businesses (FB).

Financial and legalSubmodules and description:

1. Taxation and wealth management.

  • Dividend policies.
  • Inheritance regimes.
  • Planning the estate.
  • Philanthropy.
  • ...

Family businesses are mostly organized in privately held holding companies with reasonably independent subsidiaries, though in general the family holding company fully controls the more important subsidiaries.
By keeping the holding private, the family avoids conflicts of interest with investors looking for higher short-term returns.

Financial policies aim to keep the family in control.
Many family businesses pay relatively low dividends because reinvesting profits is a good way to expand without diluting ownership by issuing new stock or assuming big debts.
Concerning taxation the issue of tax aggressiveness in family firms is a field need to be covered.

The theoretical foundations of examining the motives and consequences are emerging and the agency perspective form the family business context may deliver new insights.

2. Controlling for sustained performance.

Financial planning techniques.
If a family business wants to positively affect its performance through professionalization, the company should concentrate on diminishing family involvement in governance systems, increase the usage of human resource control systems, and decentralize organizational authority .

These steps all have consequences for daily financial management and controlling.
Techniques need to be in place to be able to properly designate responsibility and adequately measure performance of different responsibilities.

3. Financing the family business.

  • Finance of enterprise transformation.
  • M&A , exit with mergers, and other forms of exit.
  • Financial considerations and valuation.
  • Deal structure.