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Describes a newly formed manufacturer of insulation materials. The company has developed and patented a new insulation material that can be used in a wide range of markets. Capital must be raised to finance building a manufacturing facility and fund early market penetration.

The management team at Athleta is attempting to raise equity capital for the company in March 2002. Athleta is a catalog and online retailer of women's athletic clothing. The company has made substantial progress, with anticipated 2002 sales over $20 million, but has been undercapitalized. Given the decline in values in the capital market in early 2002, the company has limited prospects for raising capital on attractive terms.

A small start-up in the publishing business compares three possible alternatives for its new round of equity financing.

Supplements the (A) case.

Spreadsheet Supplement for case 202036

Describes the primary elements and defining characteristics of a company's business model from the perspective of an entrepreneur. Introduces several analytic techniques and provides illustrative examples of business models to support the analytic framework presented.

Describes an "application software" company that has been through several evolutions--from consulting firm to applications service provider (ASP). The firm has received significant venture funding to pursue the ASP model but this has not worked, at least at the time the case ends. The company faces a choice: continuing with its current ASP business model, increasing its burn rate to convert to a licensed software model, or decreasing its burn rate to offer a more custom version of the ASP product.