The case provides an overview and history of women in venture capital. The case examines the lack of funding that female entrepreneurs have had in the past. The case focuses on 4 women at venture capital firms: Sharon Wienbar (Scale VP), Joyce Chung (Garage Technology Venture Partners), Patricia Nakache (Trinity Ventures), and Rebecca Lynn (Canvas Venture).
In late 2004, a cashed-out entrepreneur in the health sciences decides to pursue private-equity angel investing as a means to fulfill her professional, financial, and personal objectives. Jocelyn Chang investigates three different types of angel organizations: the Band of Angels, Tenex Medical Investors, and the Washington Dinner Club. As part of her research into private-equity investing, she explores recent (postbubble) developments in both angel investing and the venture-capital industry.
Chronicles the origins and evolution of a landmark intellectual property dispute between Cadence Design Systems and Avant! Corp. Cadence was the leading developer of electronic data automation software used in the computer-aided design of sophisticated integrated circuits. In 1991, four Cadence employees left to form a competitive firm, ArcSys (later changed to Avant!). In 1994, Gerald Hsu, a senior Cadence executive, resigned and joined Avant! as its new CEO. This move started a series of legal disputes between the companies revolving around trade secret protection. Shortly after Hsu's departure, Avant! continued to hire many Cadence employees, including a number of critical programmers. In addition, there was evidence that some of these people stole some of Cadence's most valuable source code. Cadence began legal actions, including criminal charges, against Avant! and some of its employees for violation of trade secret laws. Chronicles the highlights of the legal battle, the marketplace battle between the firms, and the public relations struggle. Concludes by asking what the two CEOs should do in their respective positions. The central issues are: what is intellectual property, how to protect intellectual property, and how to respond effectively to perceived theft of intellectual property. Background on the industry and company is given.
Introduces angel investing as a concept and discusses recent developments in the industry. Angel investing has been a long-standing practice, dating back to Broadway play financiers at the turn of the 20th century and including wealthy benefactors of burgeoning business, like Laurance Rockefeller in the 1930s. Angel investing experienced high-profile success in the 1980s and memorably in the dot.com economy of the late 1990s. After the dot.com fallout in 1999 to 2000, Angel investing took hard punches and many angels retreated from active investing. The next generation of angels had different expectations, different experiences, and different practices. Focuses on the new generation of angel investors and the steps taken on both sides of the investing equation to mitigate the risks inherent in the relationship.
Protagonist Frank Ruderman evolved from entrepreneur to traditional angel investor and later to innovative angel or hybrid investor. Ruderman's investing group, Tenex Greenhouse, was created as a hybrid investing fund that brought together Ruderman's angel network with two institutional partners. At the outset of the case, Ruderman is in conversation with an entrepreneur/CEO who is seeking funding from the Greenhouse. Prepared for a class on venture capital, the case can serve as an introduction to angel investing and new innovations in angel investing. The fund in question has developed new techniques for fundraising (institutional partners) and investing (a narrow but deep focus).
Since the 1960s, corporate venture capital has had a mixed history. Companies seem to form separate venture capital programs during boom years and then withdraw their commitments during economic downturns. This case opens with a fictional situation: Ron Flores, the vicepresident of corporate development at AllTech, the world's largest enterprise software company, is trying to evaluate whether the company should establish a separate corporate venture-capital group to spearhead investments in young companies. Flores has two days to put together a recommendation for the company's CFO. To make his decision, Flores reviews several documents, which make up the bulk of the case, including an overview and brief history of corporate venture capital and an overview of the venture investing activities at Intel Corp., Microsoft Corp., and Xerox Corp.
This case examines the growth and development of Fogdog, an online sporting goods retailer, from its founding through multiple rounds of venture capital financing to an IPO and, ultimately, to its sale to Global Sports--one of its publicly traded competitors. The Fogdog story is set in the late 1990s, when the Internet economy was virtually exploding with new opportunities. Built to capitalize on the new Internet medium, Fogdog faced a number of issues specific to the unique economic climate surrounding the company at the time. However, the company also faced a number of timeless issues that many emerging companies experience, such as board composition and development, communication between a company and its board, and the respective positions and responsibilities of both management and a company's investors when tough company decisions have to be made. Woven throughout the case are additional themes of hiring management, raising capital, and forming strategic alliances. It ends with the "forced" sale of Fogdog by the company's board at a time when the near-term outlook for Internet-related companies was uncertain. This sale took place despite management's stated desire to continue running the company.
Three fictional vignettes expose the less glamorous side of venture capital and the decisions that venture capitalists have to make when their investments are not performing according to plan. The three vignettes cover venture capitalists that must handle portfolio company underperformance and/or management problems, evaluate acquisition offers in the "forced sale" of a portfolio company, and decide when to put more money in a portfolio company that may have promise but has been unsuccessful in raising capital from other sources.
Chronicles Trident Health, a British medical information company founded in April 1993 by Stan Shepherd and his partner Ray Jordan. The relationship between Stan and Ray began as an informal consulting partnership, as they attempted to capitalize on opportunities to help shift the U.K. health care system from a paper-based system to electronic storage, retrieval, and exchange. Realizing that this was a much larger opportunity than the two of them could handle as partners, they decided to build a company to pursue these goals. Stan and Ray confronted a host of challenges during the early months of Trident Health. To counteract financial pressures, they decided to generate cash flow by accepting consulting-type contracts. On the personnel front, they hired software engineers who could assist in the development of the planned flagship product. They also began to forge relationships with companies they felt were certain to play crucial roles in the transformation of the U.K. health care system. Notwithstanding these steps, Stan and Ray had much to accomplish to build a solid foundation. The company needed an executive team that could add a broad business perspective to Stan, who was the visionary, and Ray, who headed up development. The company also needed to be capitalized adequately. And it needed to develop a coherent strategy with respect to potential partners with which it could tackle these challenges.