The American Bully XL, first introduced to the United Kingdom around 2014, had been held responsible for a disproportionate share of both dog-related attacks and deaths. The case discusses the announcement, in October 2023, that the dog breed would be added to a list of banned dogs under the Dangerous Dogs Act. The case allows for a discussion of how society regulates risks, particularly related to products or activities that might result in personal harm or harm to others. The case also provides international comparisons of animal regulation, and potential issues resulting from the ban.
Social Finance is a Boston-based nonprofit that works at the intersection of finance and policy. It raises, allocates, and manages capital to fund projects in the areas of education, early childhood development, criminal justice, and health. The case explores how Social Finance designs and implements programs related to worker training. While Social Finance's recently launched New Jersey Pay It Forward program has garnered nationwide interest, the organization currently serves around 50,000 people and has ambitions to eventually help upskill millions of Americans. Social Finance's leadership is now examining how best to expand its reach, at a time when rampant shortages of "middle skill" labor threaten to slow economic growth and the energy transition in the United States.
This case explores the merits and drawbacks of Boston Mayor Michelle Wu's proposal to bring rent control back to the city in 2023. It lays out the features, objectives, and potential unintended consequences of this policy, before highlighting the expected impact of rent control on tenants, landlords, and developers. In addition, the case looks back at Massachusetts' long history with rent control to better understand whether rent stabilization efforts enacted in the 1970s and repealed in 1994, following a narrowly decided state-wide referendum, were effective in increasing local housing supply and easing rents in the Boston area.
Participants in the New England power market are exploring several strategies to meet the region's renewable power goals while also providing its residents with inexpensive and reliable electricity and heating fuel. New England was a first-mover into natural gas power generation in the U.S., yet has a dearth of pipeline capacity and the most expensive gas prices in the nation. The region has excellent wind power resources off its coasts, but a checkered past of permitting and legal delays. The case considers several key questions for the climate transition from an economics lens, including what we should call a clean resource; whether supply or demand-side incentives work better for reducing emissions; which types of generation resources are most effective for reducing emissions; and the societal impacts of these choices on consumers across the income distribution.
Stephen Holbrook and Austin Pulsipher (both HBS '19) had been leading Nutrishare since acquiring the company six months earlier in mid-2021. The company, based in Sacramento CA, was a compounding pharmacy serving Total Parenteral Nutrition ("TPN") patients nationwide. Holbrook and Pulsipher generally believed it was best to not make big changes during the first year after an acquisition. However, two competitors had recently exited their TPN businesses, creating an opportunity for Nutrishare to add a significant number of new clients. This opportunity would grow the business by about a quarter which would immediately reverse the stagnant client count and have a substantial impact on value. However, it would also add stresses on the Company to serve the new clients.
Amid the Covid-19 Pandemic in 2020, Betsy Harbison formed the search fund Forest Park Capital with the intention of purchasing a small business. The case conveys the details of Betsy's final decision at the terminus of her search, between a software company specializing in vacation-trip planning, and a landscaping business. Betsy must weigh the pros and cons of each company in order to determine which is the best acquisition.
The summer of 2022 marked a crucial period for Heritage Holding co-founders, Alex de Pfyffer and Ross Porter. The pair successfully acquired a large telecom business in 2016 through the search fund model, and several follow-on acquisitions between 2016 and 2022. In 2018, Heritage holding officially adopted the independent sponsor model, and adhered to the framework until the summer of 2022. The case explores a moment when Alex and Ross face a decision: advance Heritage Holding further as an independent sponsor, or convert the company to a private equity model.
In January of 2019, Joe Heieck (HBS '14), CEO of gWorks, was deciding whether to proceed with his acquisition of Data Tech, that was a business roughly the same size of gWorks. gWorks, which provided geospatial software to small city and rural county governments, was acquired by Heieck in January 2015 after a 6 month search. While there were potential synergies between gWorks and Data Tech, the acquisition also presented some significant risks including its relatively high price and concerns about the need to modernize its product offerings.
Helena Divišová (MBA, 2016) decided to return home to the Czech Republic soon after graduation to be near her father who became seriously ill soon after she started HBS. She had considered leaving HBS immediately to help run his business. But her father, who grew up in the Czech Republic when travel and overseas educational opportunities were severely limited, would not allow her to abandon her studies. Instead, Divišová's husband, Pavel Diviš, returned to help with the family business while she completed her MBA. She also gave birth to their first child in April, just before graduation. And so, the decision to return to the Czech Republic seemed obvious; her immediate family would be together and she would be able to be with her extended family during her father's illness.
Jenn Braus (HBS 2013) was half-way through the 90-day exclusivity period for her proposed acquisition of Systems Design West ("SDW"). She had completed her business and accounting due diligence. Just as she was about to ask her lawyer to begin drafting the purchase agreement, she received a call from the seller that the company had reached agreement with a large new client that would increase revenue by roughly 20%. The seller asked that the success be reflected in an increased offer price, although he had not specified the amount of the increase. Braus needed to decide on an appropriate response. Should she stand fast? In her mind, she had already agreed to pay a premium price for SDW, with a higher than typical multiple of EBITDA. Part of her rationale for the high multiple was that she believed the company had significant growth potential. Paying a higher price in response to the new customer seemed like paying twice for the growth. However, because the new customer was so large, Braus imagined that it would nudge the run rate EBITDA for SDW to about $1 million, eliminating a concern she had about the small size of the business. If she decided to negotiate a higher price, how much an increase was appropriate? Simply applying historical margins would imply that a 20% increase in revenue would correspond to a 20% increase in price. Alternatively, it could be more as margins improved with operating leverage or it could be less if significant fixed costs were required to on-board the new customer. Additionally, Braus was concerned that a new customer was inherently riskier than SDW's typical customer that had a history of recurring revenue.
Kobbina Awuah (MBA 2014) became intrigued with the possibility of adapting Entrepreneurship through Acquisition in Ghana, where he grew up and where his family still lived. While he knew he could work for a multi-national enterprise located in Ghana, he was confident that buying a small business to run provided an opportunity to have more of an impact. He formed Peak Investment Capital (PIC) at the beginning of 2014 with the goal of finding a business to buy in Ghana that he could grow as its CEO.
An increasingly popular route to success as a small business owner is "acquisition entrepreneurship"--buying and running an existing operation. If you're considering such a path, the authors offer practical advice for each stage of the process. (1) Think it through. Do you have the right qualities for the job (managerial skills, confidence, persuasiveness, persistence, a thirst for learning, and tolerance for stress)? Are you willing to trade the benefits of working at a large organization for the chance to be in charge? (2) Search diligently and efficiently. Plan to spend six months to two years--full time--following leads and systematically vetting business prospects. Focus on companies that are consistently profitable and have annual revenues of $5 million to $15 million. During this phase, you can self-finance or establish a search fund to recruit potential investors. (3) Strike a deal. When you've settled on a target, do preliminary due diligence to confirm the business's viability and arrive at a fair offer. If the seller accepts, you'll have about 90 days to work with your accountant and attorney on confirmatory due diligence. (4) Transition into leadership. After the sale closes, your priorities should be building relationships (with employees, customers, and suppliers) and setting up processes to ensure steady cash flow.