Midterm Exam
Midterm Instructions: Answer each question below in essay form, based on the principles and cases that we have reviewed so far this semester (i.e., Recognizing the Opportunity, Marshalling Resources).
No. 1: Evaluate John Taylor and Marty Grayson’s effort to identify the opportunity. Are they the right people for this opportunity? Why or why not?
John Taylor and Marty Grayson had both always had the interest of being entrepreneurs and when they met eachother is when their search for a venture began. They only had a few criteria in deciding on what kind of company that they wanted to buy. The first criteria was that the business must have a high gross margin to allow from maximum benefits from building sales. They decided it had to be a one step manufacturing process or be a distribution business. Sales had to be between $3 and $10 million, and not involved in retail sales. They had a couple of opportunities that they almost closed before the Precision Parts opportunity came up but the deals ended up falling through. The opportunity that they decided on was with Precision Parts when they had heard that the owners had not spoken to eachother for over a decade. They recognized that the company had good revenues and most importantly they had little competitors in the industry. Precision Parts was one of seven companies in the industry and they had 15% market share. I feel like they are the right business and consulting side of this business but they definetly need to bring in someone who knows the industry. Neither of them have ever owned and ran a business of their own, and they have no knowledge of the elecotro-mechanical component market. They need to bring someone in who had experience in this market to help them appropriately make a business model. They did a decent job of marshaling their resources. They personally came up with a lot of the money needed in, and went to family and friends for the rest, after they looked the VCs and
No. 1: Evaluate John Taylor and Marty Grayson’s effort to identify the opportunity. Are they the right people for this opportunity? Why or why not?
John Taylor and Marty Grayson had both always had the interest of being entrepreneurs and when they met eachother is when their search for a venture began. They only had a few criteria in deciding on what kind of company that they wanted to buy. The first criteria was that the business must have a high gross margin to allow from maximum benefits from building sales. They decided it had to be a one step manufacturing process or be a distribution business. Sales had to be between $3 and $10 million, and not involved in retail sales. They had a couple of opportunities that they almost closed before the Precision Parts opportunity came up but the deals ended up falling through. The opportunity that they decided on was with Precision Parts when they had heard that the owners had not spoken to eachother for over a decade. They recognized that the company had good revenues and most importantly they had little competitors in the industry. Precision Parts was one of seven companies in the industry and they had 15% market share. I feel like they are the right business and consulting side of this business but they definetly need to bring in someone who knows the industry. Neither of them have ever owned and ran a business of their own, and they have no knowledge of the elecotro-mechanical component market. They need to bring someone in who had experience in this market to help them appropriately make a business model. They did a decent job of marshaling their resources. They personally came up with a lot of the money needed in, and went to family and friends for the rest, after they looked the VCs and