Venture Capital Vignette Case Study
VENTURE CAPITAL VIGNETTE CASE STUDY
By MTiPO:
Desiree Fabunan
Yee Han Kuan
Svyatoslav Mishchenko
Patrick Lin Ngai Lung
Wenhan Zhou
"The Product is Great But Nobody Is Buying"
ANALYSIS TOOLS
Competitive Analysis (SWOT)
Include feedback from customers and potential customers
Analysis of trends and demographics
Compare to Sarah's marketing strategy
Approach select trusted board members for opinions
Don't involve a divided, dissonant board
"The Product is Great But Nobody Is Buying"
ADDRESSING THE PROBLEM
If CEO is ignoring Sales Manager's advice:
figure out why
explain analysis of current situation
establish Sarah's authority on Sales
If Sales strategy problem:
Re-assess Sarah's strategy given completed analysis
Address strategy changes with board
"The Product is Great But Nobody Is Buying"
THE BOARD’S INVOLVEMENT
Assuming Sarah is correct...
Evaluate how Sales strategy is handled internally
Make changes to address these issues
Re-evaluate Tuck's responsibilities to address conflicts of
opinion regarding Sales strategy
"Ante Up or Fold"
DECIDING IF WDL IS A GOOD MONEY TREE
"Ante Up or Fold"
TO GET GOOD MONEY BY INVESTING
GOOD MONEY
Liquidation
Preference(3.375X) to Protect Downside
Participating
Preferred so that
VC can get Upside from investing in a down round
Capped Liquidation
(50 Million) so that
Management is still motivated to perfrom Company
Exit Value
PACP
Other
Angel
Investors
Management
Shares
35%
31.6%
8.3%
16.7%
<8.4MM
8.4MM
0
0
0
49MM
8..4MM
+17.15M
M=
25.55MM
15.484M
M
4.067M 8.183MM
M
34.9
9.167
118.85MM 50M
2.5 Million to be invested in Tranches
18.44
"Ante Up or Fold"
ENSURING
THE
GOOD
MONEY
STAYS
GOOD
Motivating Management
Vesting Schedules for Nonqualified Options:
0%
clif
-Equally over 4 Years with first year
-To retain management to successful exit and post Exit
Strike Price = Share Price for this Round
-Ensure that management is motivated to increase stock
By MTiPO:
Desiree Fabunan
Yee Han Kuan
Svyatoslav Mishchenko
Patrick Lin Ngai Lung
Wenhan Zhou
"The Product is Great But Nobody Is Buying"
ANALYSIS TOOLS
Competitive Analysis (SWOT)
Include feedback from customers and potential customers
Analysis of trends and demographics
Compare to Sarah's marketing strategy
Approach select trusted board members for opinions
Don't involve a divided, dissonant board
"The Product is Great But Nobody Is Buying"
ADDRESSING THE PROBLEM
If CEO is ignoring Sales Manager's advice:
figure out why
explain analysis of current situation
establish Sarah's authority on Sales
If Sales strategy problem:
Re-assess Sarah's strategy given completed analysis
Address strategy changes with board
"The Product is Great But Nobody Is Buying"
THE BOARD’S INVOLVEMENT
Assuming Sarah is correct...
Evaluate how Sales strategy is handled internally
Make changes to address these issues
Re-evaluate Tuck's responsibilities to address conflicts of
opinion regarding Sales strategy
"Ante Up or Fold"
DECIDING IF WDL IS A GOOD MONEY TREE
"Ante Up or Fold"
TO GET GOOD MONEY BY INVESTING
GOOD MONEY
Liquidation
Preference(3.375X) to Protect Downside
Participating
Preferred so that
VC can get Upside from investing in a down round
Capped Liquidation
(50 Million) so that
Management is still motivated to perfrom Company
Exit Value
PACP
Other
Angel
Investors
Management
Shares
35%
31.6%
8.3%
16.7%
<8.4MM
8.4MM
0
0
0
49MM
8..4MM
+17.15M
M=
25.55MM
15.484M
M
4.067M 8.183MM
M
34.9
9.167
118.85MM 50M
2.5 Million to be invested in Tranches
18.44
"Ante Up or Fold"
ENSURING
THE
GOOD
MONEY
STAYS
GOOD
Motivating Management
Vesting Schedules for Nonqualified Options:
0%
clif
-Equally over 4 Years with first year
-To retain management to successful exit and post Exit
Strike Price = Share Price for this Round
-Ensure that management is motivated to increase stock