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This case follows Lebanese entrepreneur, Hind Hobeika, an engineer and competitive swimmer who spends seven years trying to launch a wearable heartrate monitor and motion sensor to help swimmers track their performance while swimming. While the Beirut-based entrepreneur gained initial traction soon after founding her company Instabeat in September 2011, winning $150,000 in prize money from business plan competitions and raising $100,000 from a local venture capital firm, Hobeika soon faced a series of set-backs in trying to manufacture the product. Given the complexity of the hardware product she was trying to build, Hobeika had invested a significant amount of capital in the manufacturing design and had faced continuous delays. In addition, the product was not proving to be economically viable. By early 2016, Hobeika was out of money and had to let her team go. The business issues had also taken a toll on her personal life. However, Hobeika saw a potential path forward. The VC who had originally backed her was closing a new round of funding and was willing to discuss another potential round. More importantly, while in London, she had recently met Alex Asseily, a prominent Lebanese-British entrepreneur who encouraged her to stay the course. He suggested that she relocate to San Francisco, where he would soon be based, and offered to help her. Would it be worthwhile to leave everything behind, relocate, and rebuild the business? Hobeika had to decide: should she continue or not? If so, under what circumstances? If not, what would she do next?

Spreadsheet supplement for case 817040.

Crafting a Founders' Agreement is an important component of startup infrastructure as it documents a complex set of decisions that build a company's roots. Its four key elements are: roles and responsibilities, rights (decision rights, rewards, position on board), commitments (time invested, IP, capital contributions) and contingencies (vesting, stock restrictions etc.). The note indicates how to initiate a conversation with a co-founder, and provides a checklist of questions that can serve as a conversation guide to draft the Founders' Agreement together. An Agreement is a framework, not a rigid set of rules set in stone, and should be created with flexibility and conditionality. The process of creating and revising the Agreement can bring clarity and commitment to the founding team and enable them to anticipate conflicts before they hurt the business. A Sample Agreement is included.

The case examines the focus of an early stage company, and how venture capital can distort a founder's view. It encompasses issues such as financing, founders' definition of success/failure, defining and pivoting a business model, organizational impact of a pivot, as well as the role of VCs and Boards in outlining company strategy. In 2008, Jason Jacobs, a fitness and technology enthusiast created RunKeeper - an iPhone app to track a runner's distance, speed, calories and route taken. In its initial years, RunKeeper was a fast growing, profitable company and did not utilize the $1.5 million it raised in its Seed and Series A rounds. As RunKeeper gained momentum, Jacobs created a grand health vision (Health Graph) that would increase the chances of securing VC funding. Heralded as the "Facebook of Fitness," RunKeeper willed itself to be the one-stop location for all important health information for consumers. Despite raising $10 million, the next few years were turbulent. RunKeeper became allergic to revenue, ramped up its burn, and tried to pursue both the running app and the Health Graph - but did neither well. At the end of the case, the company is almost out of cash, and Jacobs has exhausted his prospects for raising external capital. He needs to revert to his current investors to keep the company afloat. Jacobs' instinct suggests that refocusing the company on its core product and runner base would be the best way forward. However, the last round was raised on the promise of a big health vision. Jacobs wonders whether his current investors would fund a smaller vision and how onerous the terms would be. Would they push Jacobs to pursue a sale in an over-crowded health app market? Or would they decide that he was not the right person for the company?

Spreadsheet supplement for case 818026.

This case is about Tinder. It discusses different business models and ways of structuring the initial team. With a $6 million investment from IAC/Interactive in 2010, Dinesh Moorjani founded Hatch Labs to build mobile apps. His mission was to attract entrepreneurial talent to work on Lab projects which, after gaining traction, could be acquired by IAC or spun out as independent companies. To pitch talent to work at Hatch, Moorjani laid out a framework to compare the expected returns to founding an independent company versus joining an incubator. While Hatch provided lower levels of equity ownership in a single company, Moorjani argued that the complementary inputs provided by the Lab and the diversification from holding equity in the portfolio of Lab projects made the incubator structure attractive. After growing several projects from different teams, at the end of the case, Moorjani faces two critical choices: Should he support a B2B merchant services business or a dating app, Glow (a disguised name for Tinder). Second, should he go forward with a second Hatch Labs? Was the success of the first Hatch experiment replicable? The case can be supplemented with a startup valuation Exercise (#818-705), and a technical/background note on "Valuing Employee Equity at Early Stage Ventures" (#819-167).

This case follows two ex-McKinsey consultants, Magnus Olsson and Mudassir Sheikha, who in search of finding their true purpose decide to found Careem, a Dubai-based ride-hailing service. Following its launch in July 2012, Careem experiences rapid growth of 30 percent per month in the UAE and other countries in the MENA region, surpassing the co-founders' expectations. However, as a result of such immense growth, the startup struggles with various operational and cultural organizational tensions. These challenges are described from the perspective of the founders and through the eyes of Deepika Thakur, one of the early employees. By 2014, in order to succeed in Saudi Arabia, the largest and most complex market in the Gulf, Olsson and Sheikha recognize the importance of finding a strong leader to head the Saudi operations. They have their sights on a specific German-Saudi entrepreneur, Abdulla Elyas, but he has so far declined both of their initial proposals to join Careem. In the backdrop, Uber has developed a successful track record in the West, raising close to $2 billion dollars globally, and has a growing presence in the UAE following its launch there in August 2013. Finding themselves at a crossroads, Olsson and Sheikha must figure out how to address several critical organizational issues, decide how to bring Elyas on board, and ensure a robust strategy to maintain its leadership position in the region.

Chai Point is India's largest organized chai retailer. It has missed its target for retail store openings by approximately 25%, goals that are very important to its investors who are also their board members. However, it has developed an exciting new Internet based tea dispenser, that has the potential to dramatically increase Chai Point's market opportunity and growth rate but can be seen as a change in their growth strategy. The founder needs to decide his strategy for his next board meeting. Should he focus on their past performance? Or should he spend time outlining boxC.in's technology and potential, since this will be the first time that the institutional investors will be seeing this new capability?

In July 2014, after 18 months and eight unsuccessful product launches, the CEO of Yabbly has agreed to sell his company to a larger, well-funded startup, providing a return of capital for his investors and a home for his team. Two weeks prior to the scheduled closing, the team launches a final experiment based on the results of a customer interview. After creating a quick landing page and announcing the product launch through social media channels, the company finds significant customer interest. With only two weeks of promising data, the CEO must decide whether or not to abandon the planned sale to pursue the new product, and if so, what terms he should offer new and existing investors to finance the next phase of product development.