Prospective and Risk Management 

Risk management—coupled with programme and project management—is a critical element of the innovation life cycle and helps address ambiguity and uncertainty. Innovation has several dimensions and categories and can occur at any moment as a result of the continuous identification and exploitation of opportunities. The proactive identification of opportunities, managed with the same rigor and attention as potential threats, often results in process efficiencies, shortened project life cycles, an improved solution, and/or enhanced benefits. The module provides the theoretical foundations and contexts of risk in innovation processes and an introduction to the tools and frameworks used to manage the financial risks associated with innovation.

After the training the participant will be able to:  

• recognise the characteristics and fundamentals of risk management and the challenges of risk in innovation processes 

• learning strategies and principles on how to deal with risks

• identify and compare innovation / new venture finance and corporate finance

• apply core risk management tools to a variety of risks faced by institutions

• conduct the valuation of new venture / innovation opportunities using standard valuation methods

• critically assess the application of regulatory and economic capital to financial risk management policies
  

Part 1 – Innovation and risk management

• the nature of risk and risk management

• innovation processes / diffusion of innovation and risk management

• risk management standards and frameworks

• risk assessment

• communication of risks and risk management communication

• risk management strategies; organisation models dealing with risk and uncertainty

Additionally case studies, related to risk factors and management will be discussed.

Part 2 – Innovation / New Venture Financing 

In this part we apply financial economic theory and the economics of contracts to the study of new venture / innovation finance. Moreover, we blend finance theory with the practical aspects of new venture / innovation financing. Furthermore, we emphasise the importance of strategy in new venture planning. Therefore, we use a valuation perspective to approach topics such as strategic planning, business planning, financial modeling, assessing financing needs, raising outside financing, structuring financial contracts with investors, and harvesting.

• Information and Agency

• Innovation / New Venture Financing

• Financial Forecasting & Valuation

• Financial Decision Making: Real Options & Simulations

• Optimal Choice of Financing

• Harvesting

Additionally, case studies will be discussed.

Teaching will combine interactive lectures, accompanied by PowerPoint presentations and exercises. Beside this, modelling activities, case studies and discussions will be used to create favourable and interactive working environment for successful learning. This gives participants the opportunity to reflect, design and discuss.