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Follows three graduating HBS students as they build a business-to-business Internet venture and highlights the challenges they confront in structuring financing terms with venture capitalists. Requires students to carefully read a six-page term sheet to identify which provisions should and should not be accepted.

Highlights how multiple rounds of financing work in practice and illustrates how terms agreed to in early-stage financing deals have an impact in later financing rounds. Also illustrates ethical issues that entrepreneurs confront as they build "dot-com" ventures.

The founders of iCraveTV had a great idea for a potentially lucrative market segment: retransmitting network broadcast television signals to Internet-connected PCs, reaching a worldwide extension market. There were several resourcing obstacles to overcome while entering the fiercely competitive broadcasting industry and building competitive advantage: obtaining rights to the programs, securing paying advertisers, retaining viewers, having sufficient cash and management expertise. Several issues remained unresolved as they moved towards the launch of iCraveTV: negotiating rights from each of the content syndicators or attempting to pay Internet royalties for the programming; and preventing U.S. users from accessing the Canadian site since iCraveTV was legally permitted to retransmit television signals already carried on Canadian cable channels, but due to differences in regulation, it might face U.S. broadcast industry objections if U.S. audiences found access to the iCraveTV signal. A supplemental case, iCraveTV.com (B): The Aftermath of the Pennsylvania Injunction, product 9B01M010, is available.

When Blindstogo.com, the online project of Blinds To Go (BTG), was first proposed in mid-1999 its board of directors was lukewarm to the idea. However, after six months of operation and seeing other retailers start to go online and the tremendous valuation being given to dot.coms, the board was encouraging BTG to devote more resources to the project. Plans were already in place to further expand their retail store network. Senior management at BTG had received sales, spending and survey results from their retail e-commerce venture. Data obtained from the Web site indicated that the people who visited the site were the same people that visited the stores. The vice-chairman of BTG wanted to evaluate the results of this online venture by examining the fit of the e-commerce project within the overall business strategy, to determine where resources should be focused.

Profiles Rajath Chaundry, an aspiring entrepreneur, as he attempts to secure office space for his growing team, select a lawyer, and continue to build his fledgling enterprise, eLearning.com. Designed to be used in an entrepreneurial management or small business course to illustrate the importance of early negotiations in the life of a business venture.

Examines the Application Service Provider (ASP) business model. First, defines the ASP model and describes different ways to categorize ASPs. Next, summarizes the various ways that ASPs create value for their clients. Then, analyzes the economic model for ASPs, focusing on their revenue and cost drivers. Last, examines the payoff to ASPs from pursuing aggressive growth strategies.

Describes the major responsibilities and rights of family shareholders of a family owned business.

Ever wondered how entrepreneurs convince VCs to fund their businesses? A leading venture capitalist delivers the inside scoop on what not to say.

MJINI--Urban Youth Experts was founded by two recent college graduates as a research consulting firm, focusing on the buying patterns and lifestyle preferences of the urban youth who were setting many fashion trends but whom marketers found difficult to reach. Not only could the founders leverage their backgrounds, they could help their communities by communicating, building respect, and giving back to youth groups. Although they met with some success, they faced a number of questions typical to start-up companies: How fast to grow, how and whom to hire, how to train new recruits, how to finance growth, determining the right marketing and consulting product, determining its real market worth and billing rates, and identifying the greatest opportunities.

As the new millennium dawned, many old economy companies faced the challenge of transitioning into the Internet era, making "Go Web or go dead" the common mandate. For John Kilcullen, CEO and publisher of IDG Books, the Internet offered an opportunity to fashion a new business model based on recurring revenues rather than one-time transactions. Instead of just selling books, Kilcullen envisioned the IDG Web site as the locus of continuing education and information. Chronicles the evolution of the "Dummies" series of books within the structure of the huge IDG organization, offering insights and discussion on what it takes to foster a successful corporate entrepreneurial climate.

In December 2000, New Schools Venture Fund was debating the role it should play in helping one of its for-profit investees, LearnNow, attract new capital. A $20 million venture philanthropy fund, New Schools invested in for-profit and nonprofit education ventures that targeted a vulnerability in the K-12 education system. LearnNow, a charter school management company, was wrestling with the need to balance the aggressive growth demanded by most for-profit investors with its commitment to providing quality education for students in low-income communities. This tension and LearnNow's struggles to raise money highlighted a question that was always on New Schools President Kim Smith's mind: Should New Schools, a public charity seeking to improve K-12 education, be investing in for-profit ventures?

Describes the business model for online market makers, firms that use the Internet to organize a marketplace, providing participants with a virtual "place" to trade, rules to govern their exchanges, and infrastructure to support trading. First it proposes a definition of market making and presents different ways to categorize online market makers. Next it describes how online market makers create value for market participants. Then it examines the economics of market making, focusing on revenue and cost drivers, using both online and offline examples. Building on that analysis, the final section examines the risks and potential payoffs to online market makers from pursuing aggressive growth strategies. Explores the value proposition offered by these companies and the economic imperatives they face. Finally, seeks to provide a framework for evaluating whether the adoption of aggressive growth strategies is prudent for online market makers.

Describes Promise, the third-largest consumer finance company in Japan. Promise was created in 1963 by an entrepreneur and has grown rapidly, especially in the 1990s when commercial banks struggled. Promise's core business consists of providing unsecured loans of up to about $10,000 to individuals. The company has maintained an entrepreneurial culture despite its growth. At the time of the case (July 2000), Promise has around 2.2 million customers and is faced with increasing competition and several regulatory changes. Management must make a number of decisions going forward, including new sources of growth and financing, as well as a potential listing on a foreign stock exchange.

Describes the online portal business model. Analyzes the model, focusing on the tactics used to acquire new users, turn new users into repeat visitors, and monetize user traffic. Explains portals' revenue and cost drivers and their implications for pursuing aggressive growth strategies. Finally, explores the challenges facing companies that aspire to develop portals for new online access technologies, such as wireless data and interactive television. To accompany teaching cases on online portals in courses on Internet strategies and e-commerce. Provides background on the online portal business model, and explains how it differs from other Internet business models. Examines the strategic choices that portals typically face. Also describes how portals can add value as consumers adopt emerging technologies, such as wireless data and interactive television.

Describes online retailers, companies that use the Internet to sell physical goods. Defines online retailers and describes different ways to categorize them. Explores their economic model and value proposition for consumers in comparison with offline retailers. Next, explores the payoff to online retailers from pursuing a "Get Big Fast" strategy--i.e., investing aggressively in customer acquisition and brand building--and identifies best practices that online retailers might employ to maximize their chances of success. Lastly, discusses implications of shopping "bots," and the prospects for disintermediation by retailers by manufacturers.

Describes issues facing three young founders of a high-tech start-up in Silicon Valley, including hiring an experienced CEO and negotiating with a potential VC investor. Focuses on the incentive and compensation aspects of negotiating with job candidates (e.g., what percentage of the equity is appropriate to offer) and with venture capitalists (e.g., options-vesting issues).

Tellme, an early-stage, venture-backed company based in Silicon Valley, leverages speech-recognition technologies to provide: 1) a "voice portal" with news and other information accessible through any telephone, and 2) turnkey application development and hosting services for other companies that wish to voice-enable customer service and marketing applications. These two businesses are interdependent: partners' applications receive greater usage when they are hosted within Tellme's portal, and Tellme's portal receives greater usage by virtue of hosting a richer array of applications. In the fall of 2000, Tellme managers are debating a number of strategic issues, most importantly: 1) should they agree to voice-enable services for mass-market Internet portals like Yahoo!, which would provide significant application development/hosting revenue but accelerate competition to Tellme's own voice portal?; and 2) should they pursue a "Get Big Fast" strategy, investing aggressively in customer acquisition and brand building?

Supplements the (A) case.

Before the days of the Internet, it was primarily venture capitalists who coached young entrepreneurs in Silicon Valley. Today, because of the phenomenal number of new companies, venture capitalists are just too busy. To fill the void, a new breed of adviser has stepped in to coach entrepreneurs. Called mentor capitalists, they help entrepreneurs with everything from recruiting top talent to attracting their first million in seed money. The mentor capitalists in Silicon Valley are cashed-out, highly successful business architects who no longer want to start businesses but who love the thrill of the entrepreneurial game. They spend hours and hours with first-time entrepreneurs, guiding them as they create and refine a business model, test their ideas in the marketplace, build business processes, raise money, and find talent. Mentor capitalists seed Silicon Valley with expertise and knowledge, augmenting or even substituting for classes in entrepreneurship at local universities. But, as the authors note, the role of the mentor capitalist is essential to any start-up, anywhere.

Examines the tensions that occur in family shareholder groups and how to prepare for them and manage them.