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The case tells the story of Chris Freund, the co-founder of Mekong Capital, a Vietnam-based private equity firm established in 2001 when the country began its transition to a market-based economic model. Mekong initially focused its investment strategy on small and medium enterprises in the export manufacturing sector. However, over the first five years of the company's history, the investment strategy shifted to a greater focus on rapidly expanding consumer businesses to take advantage of the broad economic prosperity arising in the Vietnamese marketplace. Where most private capital firms added value through financial engineering or operational expertise, Mekong had taken a different tack, choosing to employ what it called Vision Driven Investing (VDI). At the core of the vision driven approach was what Mekong and its consulting partner, the Vanto Group, describe as "transformation." As Freund explained, "Where other PE firms choose to be really good at transactional stuff and deal making, that's not inspiring to us. It's fulfilling to add value to companies and see them empowered. It's adding value through transformation." Transformation describes a framework intended to foster high-performance leadership and organizational cultures in investee companies intended to produce breakthrough results. The case presents several examples of the transformational approach and opens opportunities to discuss its efficacy and broader applicability for organizational management and leadership.

The CEO of Green Zebra weighs the implications of growth for a small chain of innovative, organic neighborhood grocery stores. The firm was at the forefront of both healthy food and convenience trends but faced fierce competition from larger players entering the market. A rapidly diminishing cash position forces the CEO to compare how two investing-financing alternatives contribute to growth and to reducing the cash burn of current operations. A slow growth option requires less financing and may allow the company to achieve a positive cash flow more rapidly. The alternative, rapid expansion into a new market, has the potential to rapidly scale operations and enhance competitive position. Students develop financial forecasts, calculate the weighted average cost of capital (WACC), estimate cash flows, prepare net present value (NPV) and evaluate financing alternatives. This is an integrated case that illustrates the financial implications of growth and the capital rationing issues faced by small firms. It can be used as a final exam case for an MBA-level course in corporate finance and as a vehicle for structured case analysis in an upper division undergraduate course in finance or entrepreneurship.

Cameron Harding has just opened his own business, and needs to get health insurance for himself and his fiancée, Audra. They are looking for a plan that will best meet their needs, but Harding knows little about the world of health insurance. Luckily, Harding's uncle, a senior salesman at a large pharmaceutical firm, is happy to offer advice and talk Harding through the process of choosing insurance. This case set walks students through choosing a health insurance plan, and what questions to ask when receiving care.

Supplement to case UV7947. This case provides two snapshots of sudden health care crises. It walks the students through how health insurance works, and what questions to ask when receiving care.

On October 25, 1847, British prime minister John Russell met with his cabinet to review a deepening financial crisis and to weigh proposals for government response. Chief among these were two proposals. The first was to suspend the Bank Charter Act of 1844 in order to permit the Bank of England to discount more freely and to issue banknotes in greater volume than the Act allowed. In recent days, delegations of merchants, industrialists, and country bankers had approached Russell to plead for more currency. The second was to do nothing and allow the crisis to run its course. Some members of Parliament argued that the whole point of the Act was to impose discipline at times like this, so to suspend it would make a mockery of that discipline and create moral hazard. As leaders of the Whig Party, Russell and his cabinet would need to navigate carefully through the crisis, owing to the slim majority his government held in Parliament. The A case describes five shocks that promoted the financial crisis of 1847-agriculture, railways, demand, monetary, and fiscal-as well as the complicated political situation at this time of the Irish potato famine. The B case offers an epilogue.

On October 25, 1847, British prime minister John Russell met with his cabinet to review a deepening financial crisis and to weigh proposals for government response. Chief among these were two proposals. The first was to suspend the Bank Charter Act of 1844 in order to permit the Bank of England to discount more freely and to issue banknotes in greater volume than the Act allowed. In recent days, delegations of merchants, industrialists, and country bankers had approached Russell to plead for more currency. The second was to do nothing and allow the crisis to run its course. Some members of Parliament argued that the whole point of the Act was to impose discipline at times like this, so to suspend it would make a mockery of that discipline and create moral hazard. As leaders of the Whig Party, Russell and his cabinet would need to navigate carefully through the crisis, owing to the slim majority his government held in Parliament. The A case (UV7950) describes five shocks that promoted the financial crisis of 1847-agriculture, railways, demand, monetary, and fiscal-as well as the complicated political situation at this time of the Irish potato famine. This B case offers an epilogue.

Spreadsheet supplement to case UV7953

In November 2017, John Fruehwirth, managing partner of Rotunda Capital Partners (RCP), was considering the final terms of a Series B offer to StreetShares, Inc. (StreetShares), a fintech platform lending company whose principal business was lending to veteran-owned businesses. StreetShares was cofounded by Mark L. Rockefeller and Mickey Konson-both veterans themselves-in 2013, with the mission to provide better access to credit for veteran-run businesses. Since the financial crisis in 2008, banks had been reducing small-business lending, and the founders believed there were over a million veteran-run businesses that could benefit from better access to small loans and other forms of credit. When Fruehwirth first met the two founders in the spring of 2017, initially he thought the company was too early in its development to satisfy his investment criteria-but he was impressed with the company's management and mission. His view changed in October 2017, when StreetShares beat out Kabbage and several other online lenders to pilot a program for MILBANK, Inc., a large military affinity-focused bank, to offer small-business loans to its members. If successful, the pilot would significantly accelerate loan growth. But if the pilot failed, it would leave the firm with more expensive channels for growth and raise doubts about its small-loan business. Fruehwirth was contemplating a Series B-round investment of $20 million for 40% of the company's equity, but needed to determine whether the returns would satisfy his investors, knowing they were highly dependent on the success of the pilot. The case contains RCP's offering memorandum summarizing the merits of the StreetShares investment and Fruehwirth's proposed deal terms. Students are asked to qualitatively evaluate the potential benefits and risks of the investment from the perspective of RCP's investors, and to quantitatively calculate the investment's returns.

Student spreadsheet to case UV7935

Kira Allen has moved to a new city, started a new job, and is ready to get herself a new cell phone and a phone plan as well. As she researches her options, Allen thinks about trade-offs and differentiating her wants from her needs in the purchasing process. This case is most useful in a financial-literacy or financial-capability course for non-MBA learners. Students will think about their own requirements in a cell phone, what terms in the mobile-phone sphere actually mean, how to decide on a device and a provider, and the total costs of phone ownership.

In April 2016, Mark Parker, an experienced private-equity investor, is considering an investment in MedMetric, LLC (MedMetric), a seed-stage health care information technology company. The company has a Software-as-a-Service (SaaS) product that facilitated reimbursement for Medicare Advantage companies (MAs), private firms that provided an alternative way for senior citizens in the United States to receive Medicare coverage. The Centers for Medicare and Medicaid Services (CMS) reimbursed these companies using risk-adjusted metrics submitted by the MAs that increased their payments for higher-risk patients. Since 2012, CMS had been transitioning from a simpler data-entry process to a more complex data system called the Encounter Data Processing System (EDPS). Smaller and medium-sized MAs struggled to adjust to EDPS and MedMetric's product targeted these MAs to facilitate the transition to EDPS and ensure accurate reimbursement from CMS. MedMetric's product is in development and has several contracts pending, but no revenues are expected until July 2016. Based on the difficulty of valuing the company at this stage, Parker is considering making a $1 million convertible note offering to bridge the company to a later Series A venture round. The terms of the note seem relatively standard to Parker, but he is unsure whether they will provide him with the equity stake and influence he is seeking from the company. Students are asked to evaluate whether the terms of the note are sufficient to grant him the 10%-to-15% equity ownership he is seeking. Seed-stage convertible notes have increased in recent years as a form of financing for early-stage companies. This case provides an introduction to convertible note offerings, their terms and structure, and how the equity ownership can be estimated when the valuation of the company is delayed until a later round of financing.

Student spreadsheet to case UV7929

Convertible notes are often used to raise early-stage financing for start-up companies, frequently due to their advantages related to delayed valuation, greater speed, and lower cost of completion compared to venture capital financing. As a result, there has been a large increase in the number of early-stage companies raising capital through convertible notes over the past decade. Investors have made this form of financing more available, believing that small amounts of money can significantly advance the development of young companies. Entrepreneurs often find that convertible notes are easier to raise than a first round of venture capital. The ease of convertible note financing, however, sometimes belies the hidden risks and costs associated with its use. This technical note discusses the most frequently used terms and arrangements of early-stage convertible notes, the estimation of the noteholder's equity ownership from delayed valuation, and the costs and risks of this form of financing to both entrepreneurs and investors. The case "MedMetric, LLC: Seed-Round Convertible Note Financing" (UV7929) can be assigned with the note as an application of this form of financing.

The first (or "Great") Industrial Revolution occurred in Europe from roughly 1760 to 1860, and marked the end of the centuries-long feudal era and the rise of modern capitalism. To understand the modern industrial economy, it is necessary to consider the profound structural changes that produced it in the 18th and 19th centuries. New industries replaced old systems or businesses with new technologies, products, markets, and business practices, resulting in dramatic changes in economic growth (a measure of material well-being), politics (new institutions, interests, and ideologies), and society (such as urbanization, changes in social mobility, and immigration). Anchored to the rationalist principles of the Enlightenment, the Industrial Revolution emphasized increased productivity across sectors, from agricultural labor to factory production. The Industrial Revolution encompassed and relied on dramatic changes to organizational management, capital structures, resource procurement, and political institutions, marking a culmination of societal transformation that manifested in an explosion of economic development. The word "revolution" suggests a period of radical change, a shift from an old order to a completely new one: the Industrial Revolution was such a shift. This note offers a historical overview of this hugely consequential period in economic history.

A medium-sized Canadian provider of specialized educational products and services, Canada Specialization Providers, had a subsidiary, CS Publishing Inc. (CSPub), which sold specialty learning materials around the world. Although the company's costs and revenues were almost exclusively in Canadian dollars and its subsidiary, CSPub, had most of its costs in Canadian dollars, this subsidiary also had a large and growing revenue base in other currencies. Upon consolidation, the parent company was exposed to different currencies through CSPub. The foreign currency values were currently relatively minor, but in March 2019, CSPub was in the process of a large global expansion that would expose both the subsidiary and the parent to new sources of currency risk. The director of CSPub needed to clarify the company's current and expected future exposures to currency risk and determine how these exposures might affect the parent company. She also needed to identify the processes that could help manage these future risks and decide which of these processes to implement, if any.

In 2019, the chief executive officer (CEO) of Boston-based Feehan Investment Management faced a decision. After succeeding her father as CEO, she launched a quantitative research group, or quant group, which used statistical and mathematical methods to determine investment strategies that were applied to incubate a long/short equity strategy. After incubating the strategy for three years and realizing good returns, the CEO wanted to open up this fund strategy to outside investment; however, she needed to decide on which fund structure to wrap this strategy in—a hedge fund or a mutual fund.

At the end of 2017, the director of HY Capital, was facing an investment decision. Two years earlier, HY Capital had invested in Dalian New Vision Media Co. Ltd. (New Vision), a company working on augmented reality products for early childhood education. The investment provided New Vision with sufficient funds to enter the market. However, after a quick success, New Vision had saturated the market and could not make further significant progress. Thus, New Vision's management team proposed to alter the company's strategy to move into kindergarten to grade 12 after-school education. The strategic shift could be lucrative, but it was risky and would require more funds to support product development. The director was now wondering, should HY Capital support New Vision with further investments or just exit the investment?

Managers need to be comfortable with financial statement forecasting. Forecasts allow managers to plan properly by weighing consequences and preparing for outcomes. A less-recognized but equally important benefit is that the act of forecasting forces managers to make explicit the many links that exist between decisions, possibly drawing attention to constraints that otherwise might have been overlooked. This is particularly important since financial statements integrate the financial and operating decisions of a firm. This note focuses on forecasting in the context of decision-making. Aspects of forecasting explored include: revenue growth estimates, sources of error, assumptions, typical ratios, and the T-account approach. It also includes a detailed example of a typical financial forecast. The concepts are applied to the hypothetical firm Morgan Industries, a setting that has been integrated across all the Financial Analytics Toolkit series of technical notes. While this note focuses on financial statements, the forecasting techniques described herein are readily transferred to related contexts, such as building cash-flow forecasts and using ratios to evaluate financial performance.

This case follows a senior loan officer who is reviewing requests from two customers of the bank to raise their credit limits. The two businesses are alike in many ways, but the loan officer believes one represents a greater problem. The students must use a ratio and financial analysis (all ratios are provided, as the challenge is not calculating ratios but interpreting them) to identify which of the two is worthy of concern. The emphasis in this case is on interpretation rather than calculation, though an instructor can explore definitions and calculations as desired. By hinting that there is a conclusion that can be reached, students are motivated to view their analyses as supporting a judgement. Just as ratios essentially link line items to provide insight, judgement links ratios to tell a story. An intentional feature of this case is that the judgement is relatively clear, and students will finish with a sense of success.