個案總覽

The Valhalla Partners venture capitial firm introduced a new approach to the due-diligence process. An internal due-diligence report analyzes Telco Exchange, a startup company in the IT software space. An extended excerpt examines the trade-offs involved in the new due-diligence process and whether Valhalla should invest in Telco Exchange.

Describes a set of decisions confronting some managers in the oral care division of Procter & Gamble. They must decide whether to buy a company that has developed an inexpensive, battery-operated toothbrush. The company's product has done well in one market, but determining an appropriate value and structure is challenging.

Supplements the (A) case.

Larry Baer, executive vice-president and COO, was eager to improve profitability for the San Francisco Giants baseball team. Over the last few years, the Giants have had a number of successes. They successfully built the first privately financed ball park in over 30 years. They set all-time records in season ticket holders, attendance, and sponsorship advertising. At the same time, the team was highly competitive in the field, ranking first or second in the league and making it to the World Series in 2002. However, they were expected to incur significant operating losses. Baer wondered what he should do.

Describes a set of decisions confronting the management team of an early-stage software company. The company has made considerable progress in developing its software but will need additional capital to move forward. Unfortunately, conditions in the capital market are very difficult, and management must decide to address its financial needs. Provides a detailed history of Marv Tseu, the CEO, who had a broad range of interesting experiences in the world of technology.

Compares and contrasts three different venture capital funds from the perspective of a potential investor. The first fund has a technology-enabled services preference, the second a Mid-Atlantic region preference, and the third a seed round preference. Students are asked to decide which fund (or combination of funds) would be the best investment and which fund would be the most attractive investor for entrepreneurs.

Describes a situation confronting the management of a highly successful venture capital firm in April 2002. The industry has changed materially since it raised a $1.2 billion dollar fund, and the partners must decide whether to scale back the size of the fund.

Briefly summarizes the process that venture capitalists use to analyze high-risk, long-term investments. Contains information on methods that can be used to calculate valuation, share price, percent ownership, implied valuation, dilution, and option pools.

Describes the progress of a nonprofit organization, Endeavor, focused on nurturing entrepreneurship in emerging markets. At the time of the case, it has successfully expanded to five Latin American countries and is contemplating the next phase in its growth. Specifically, it must decide how quickly and to which countries/regions to expand. In addition, the organization has been successful in raising money at the local level to support its country affiliates, but has had more issues related to raising the funding for its operations in New York. Thus, a key question is which funding model to use to support these headquarters operations. Includes a good deal of information regarding the prevalence of entrepreneurship in various countries, as well as economic data on a great variety of countries. A rewritten version of an earlier case.

The use of stock options for executive compensation has become a lightning rod for public anger, and it's easy to see why. Many top executives grew hugely rich on the back of the gains they made on their options--profits they've been able to keep even as the value they were supposed to create disappeared. The supposed scam works like this: Current accounting regulations let companies ignore the cost of option grants on their income statements, so they can award valuable option packages without affecting reported earnings. Not charging the cost of the grants supposedly leads to overstated earnings, which purportedly translate into unrealistically high share prices, permitting top executives to realize big gains when they exercise their options. If an accounting anomaly is the problem, then the solution seems obvious: Write off executive share options against the current year's revenues. The trouble is, Sahlman writes, expensing option grants won't give us a more accurate view of earnings, won't add any information not already included in the financial statements, and won't even lead to equal treatment of different forms of executive pay. Far worse, expensing evades the real issue, which is whether compensation (options and otherwise) does what it's supposed to do--namely, help a company recruit, retain, and provide the right people with appropriate performance incentives. Only ethical management, sensible governance, adequate internal control systems, and comprehensive disclosure will save the investor from disaster.

Describes the evolution of Amazon.com and its business model since its founding. Specifically, discusses Amazon's transformation from an e-Tailer to a commerce platform and its marketplace initiative, which has driven this. Also describes the economics of various commerce models that Amazon employs and discusses a decision confronting Jeff Bezos regarding how the company should participate in the apparel segment.

Describes the transition to a new CEO at Intuit, a successful software and financial services firm in California. The new CEO must decide what to change and how fast. He must also navigate within a culture everyone believes to be successful but he envisions can be improved.

Describes the internal reporting package for a rapidly growing company in the e-learning industry. Management must analyze the data in the package and decide what actions to take. They must also decide what to communicate to the board of directors. Contains a description of the company and a copy of the reporting package.

Supplements the (A) case.

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.

Describes an entrepreneur's attempts to invent, manufacture, and distribute an inexpensive electric toothbrush.

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.

Contains a detailed analysis of Microsoft's financial performance from 1985 to 2001. During this time, Microsoft improved its profitability and cash flow generation--changes that led to a dramatic rise in valuation. Also addresses the issue of determining how much excess profit the company might have earned as a result of its illegal activities, as alleged and proved by the U.S. government.

Harvard Business School professor William Sahlman comments on his 1999 HBR article, "The New Economy Is Stronger Than You Think." Despite the market crash, he says, the new economy continues to hold its value.

A set of financial and strategic decisions confront the management of a company trying to develop a technology for creating "electronic ink." If successful, the company will be able to create "radio paper," essentially turning a piece of paper into a computer monitor that has all the characteristics of paper but is digitally controlled.