The case opens in July of 2009 with Becky Splitt, CEO of StudyBlue, facing a series of difficult decisions. These include: determining the appropriate business model to monetize the StudyBlue site, which customer segment to target, and how much new capital to raise (and from whom). The case tells the story of how StudyBlue was begun as a side project of Chris Klündt and Steve Wallman in 2006 and how it evolved into a full-fledge start-up with seven employees. Over the course of three years, StudyBlue develops a healthy following of college users and adds significant new features and functionality. However, by the close of the case, there is still uncertainly around how quickly it can grow revenue in the future. Given new competitors on the horizon and the window for Series A funding round closing, Splitt must make her decisions quickly.

The case highlights the evolution of a wide-area-network (WAN) optimization company from its founding day to its potential IPO. It explores the various challenges faced by management along the way, both in terms of determining what characteristics are needed in VP of sales role as well as how to determine which go-to-market model is most appropriate. OptiGen emphasizes the risks of channel conflict and forecasting inaccuracies, particularly for a company that wants to go public. The case opens with Robert Campos, CEO of OptiGen, preparing for a series of meetings with investment banks to discuss the prospects of an IPO. His company has recently missed its operating plan for the second time in three quarters. Campos is concerned that the spotty track record will harm its chances on the public market. Campos highlights two key, interrelated problems that must be addressed immediately: a broken forecasting process and inconsistent quarter-over-quarter revenue growth. Internally, there is no connection between the forecasts provided by the sales team at the beginning of any given quarter and the operating plan set forth by management.

A new venture team is composed of the founders, employees, and advisors who will guide an idea from its formation stage into a fully functioning company. Each of these groups plays an important role in growing the venture and putting it on the path to success. This note will explore the myriad factors to be considered when forming a new venture team. While strategy and implementation may depend on the industry, product or service, and target customer, the core tenets of forming a team will be consistent regardless. Above all, founders must instill a commitment to and passion for the idea: A compelling vision will attract a stellar team. Founders must also be deliberate about culture; this requires determining one's own personal definition of success and assuring that it is aligned with that of other team members. As important as culture is makeup: new venture teams should be a carefully balanced blend of backgrounds, functional skills, and industry expertise. Lastly, as their company grows, founders must be thoughtful in hiring employees as well as choosing advisors and investors. Issues of ownership must be considered. This note explores each of these issues in detail and provides anecdotes of successful teams which spent the time to get the group balance right before moving onward to build a product or seek funding. It incorporates the perspective of investors who have seen great ideas fail and succeed, based on the strength of the founding team.

An initial public offering (IPO) is the first sale of stock or shares by a company to the public. IPOs are often issued by smaller, younger companies seeking capital to expand, although they can also be done by large privately owned companies looking to become publicly traded. When a company lists its shares on a public exchange it will almost always issue additional new shares at the same time. The money paid by investors for the newly issued shares goes directly to the company (versus later trades of shares on the exchange, in which money passes between investors). Therefore, the IPO provides the company with access to a wide pool of stock market investors who can provide significant capital for future growth. Instead of the company repaying this capital, the new shareholders will have a right to future profits distributed by the company and the right to a capital distribution in the case of dissolution. Once the company is listed, it can continue to issue shares, which again provide it with capital for expansion without incurring debt. This ability to regularly raise large amounts of capital from the general market is a key incentive for many companies seeking to list. Additional reasons for going public include providing liquidity for venture investors, management, and employees, who are typically holders of stock options. In addition, through an IPO, the company gains worldwide prestige with customers, suppliers, and within its local and business communities.

The case opens with Dave Hersh, CEO of Jive Software, calling an all-hands meeting. After a record revenue year in 2007, Jive grew its sales force too quickly and missed its third quarter plan for 2008. Hersh was forced to conduct a massive lay-off, during which 20 percent of the workforce was let go. The company is facing increasing competitive pressure and a difficult economic environment, as well as a venture partner that is growing frustrated.

Rachel Braun Scherl and Mary Wallace Jaensch are marketing consultants for J&J who uncover the opportunity to buy Zestra Laboratories, a South Carolina company which makes a product proven to improve women's sexual health. The case explores the process by which the team conducted diligence, raised funding, and eventually bought the assets of the company out of bankruptcy. It covers the challenges of changing a retail business model to a hybrid of retail and direct-to-consumer, as well as the marketing challenge of connecting with a target customer about a need that is not often publicly discussed.

Scott Weiss, CEO of IronPort, a leading internet security company, is contemplating an acquisition offer from Cisco Systems in November of 2006. Although Weiss had originally intended for IronPort to IPO, a series of events have occurred that have made an acquisition a potentially more attractive option. Weiss is worried about what will happen to the IronPort culture once it is absorbed under the Cisco umbrella. Weiss must decide which route is the best way to go for his company and, if he decides to sell, he must determine the best way to share the news with his employees.

Amanda West is a GSB graduate who has launched a healthy fast food restaurant out of business school. She developed the business plan with her S356 team and validated the idea throughout the course. After graduation she decided to launch the business on her own. She successfully formed a board of advisors, raised angel financing and has been searching for a location for her first restaurant site. Her search has lasted eighteen months and she has yet to sign a lease.

Amanda West is a GSB graduate who has launched a healthy fast food restaurant out of business school. She developed the business plan with her S356 team and validated the idea throughout the course. After graduation she decided to launch the business on her own. She successfully formed a board of advisors, raised angel financing and has been searching for a location for her first restaurant site. Her search has lasted eighteen months and she has yet to sign a lease.

John Dean and Danny Lui began raising their first fund as Startup Capital Ventures (SCV), a small venture capital firm in 2005. They made a soft commitment to invest 15-20% of their first $25MM fund in China. They made their first Chinese investment in 2005 in Zero2IPO, a Beijing-based market research firm that tracked Mainland china private equity and venture capital markets. The investment has gone well so far, but the venture capital market is changing rapidly. Dean and Lui need to decide whether to continue investing in China, and if so, they must develop a new strategy. This case examines the challenges of venture capital investment in China, given increased competition for deals, significant regulation changes and a rising preference for local teams versus foreign VCs.

The purpose of the venture viability research process is to identify the key questions underlying the viability of a venture, to facilitate reframing of the venture to enhance its viability, and to provide evidence to support the founders' answers to those questions. The venture viability research process for entrepreneurs is different than the process for established companies. The questions are much broader and more fundamental, the available resources are fewer, and the time urgency is usually greater. In addition, entrepreneurs often have an incomplete understanding of the market for their product and limited direct experience with potential customers. The recommended process includes: (1) prototyping of venture designs, (2) identifying and answering key viability questions, and (3) iterating between steps 1 and 2 and adding detail to both the venture design and key viability questions in the process. Entrepreneurs invariably operate on limited budgets and condensed time lines; therefore prioritization is critical to every step of the process. Viability research demands constant evaluation of the attractiveness of different prototype designs. This note will illustrate the steps above, using a series of examples. It will also provide guidance around how to answer key viability questions, using tools such as expert interviews and various types of market research.