Case Study: Tad O'Malley
Out of the three choices, 3F AG, is clearly the best investment opportunity. On pure growth potential alone, 3F AG is an attractive investment. The industry as a whole is expected to increase at 2-3 times the current rate in less-developed nations of Asia, Latin America and Eastern Europe. In addition to this, the industry has been consolidating rapidly over the last couple of years and 3F is one of the world leaders in this business. This means that 3F is poised to take a firm hold on a good chunk of the market share in a fast growing industry. In addition to this for barriers to entry for this industry are significant. This make this a great opportunity for Empire to enter into a market that is rapidly growing and very difficult to get into. Finally and perhaps most importantly 3F has developed very strong relationships with blue chip clients. This really brings everything about the deal together. This strong relationship with blue chip clients provides a very strong foundation for the business, a business which is growing fast and is difficult to get into.
Yellostone Cattle Bank, is the incorrect choice to make an investment. The biggest reason for this is the fact that the available stock represents only 40% of the total equity making Empire a passive investor. This is unacceptable for a large venture capital firm. If the firm is to make a significant investment in a company it needs assurances that their money will be used wisely. As a passive investor Empire will have no guarantees. This factor alone takes Yellowstone Cattle Bank out of the picture as an investment. In addition to this, Yellowstone's CEO is notoriously strong willed and difficult to work with. While he has had a good record of performance to this date, there is no guarantee that this success will continue. In addition, it is all but a certainty that he will ignore any outside advice if things start to fall apart, an option that he has open to him due to...
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