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Harvard Business School Publishing

Case Map for Hisrich & Peters: Entrepreneurship, 5e

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Harvard Business School Publishing 800-545-7685 (Outside the U.S. and Canada 617-783-7600)

[email protected] www.hbsp.harvard.edu/educators

This map was prepared by an experienced editor at HBS Publishing, not by a teaching professor. Faculty at Harvard Business School were not involved in analyzing the textbook or selecting the cases and articles. Every case map provides only a partial list of relevant items from HBS Publishing. To explore alternatives, or for more information on the cases listed below, visit: www.hbsp.harvard.edu/educators Case Title Source,

Number, Length, Teaching Note

Geographical and Industry Setting, Company Size, Timeframe

Case Decision Issue

I. THE ENTREPRENEURIAL PERSPECTIVE

Chapter 1: The Nature and Importance of Entrepreneurs

Magdalena Yesil HBSP #800350 8p

Menlo Park, CA, venture capital, 1 employee, 1980-1998

Magdalena Yesil, investor and former entrepreneur, must decide whether to become a venture partner at US Venture Partners. This case discusses career progression, entrepreneurship, and deciding among career alternatives. Yesil's entrepreneurial experiences include UUNET, CyberCash, and MarketPay.

Chapter 2: The Entrepreneurial and Intrapreneurial Mind

Business Teams at Rubbermaid, Inc.

HBSP #897165 26p

Ohio, consumer products, 14,500 employees, 1996

Rubbermaid, a consumer products company widely praised for its innovation, has instituted a company-wide experiment to stimulate innovation even further. The experiment consists of creating small cross-functional business teams within each division, with each team being responsible for the creation, management, and profitability of a particular product line. The staffing, reporting structure, and management of the business teams vary across divisions, and clear differences emerge in the performance of four highlighted teams. Explores the possibility of using cross-functional teams within established firms to simulate entrepreneurial ventures and accelerate innovation.

Corporate New Ventures at Procter &

HBSP #897088 24p


Consumer products giant Procter & Gamble is faced with an urgent need to revitalize new product innovation. As part of this effort, the

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Gamble company's top executives form a small, autonomous, cross-functional Corporate New Ventures team. The team invents a systematic approach to gathering information and producing creative ideas for radically new product categories. Illustrates approaches to creativity, innovation, and entrepreneurial activity in a large, well-established firm.

Chapter 3: The Individual Entrepreneur

Randy Haykin: The Making of an Entrepreneur (A)

HBSP #498044 13p

California, multimedia/high technology

An MBA graduate, 10 years out, reflects on his career path. Randy Haykin is currently running his own venture catalyst organization in the Silicon Valley.

Magdalena Yesil HBSP #800350 8p

Menlo Park, CA, venture capital, 1 employee, 1980-1998

Magdalena Yesil, investor and former entrepreneur, must decide whether to become a venture partner at US Venture Partners. This case discusses career progression, entrepreneurship, and deciding among career alternatives. Yesil's entrepreneurial experiences include UUNET, CyberCash, and MarketPay.

Emmet Stephenson: Profile of an Entrepreneur

HBSP #898-049 5p

Profiles the career of Emmet Stephenson, the founder of over a dozen successful companies, as a model of entrepreneurship and management.

Kronos (A) and (B) (Condensed)

HBSP #393122 26p

Massachusetts, computerized time recording, 382 employees, 1977-1992

Describes Mark Ain's founding and management of Kronos, which has grown to a $33 million dollar company in 13 years. Focuses on the issue of what Mark's role in the company should be. Presents data from a personality assessment of Mark and his senior management team as input to this decision. Introduces the idea of personality and management style as key dimensions that influence a manager's behavior and skills.

Chapter 4: International Entrepreneurship Opportunities

Officenet (A): Making Entrepreneurship Work in Argentina

HBSP #800238 23p TN #801260

Argentina, office supplies distribution, 203 employees, 1999

Describes the creation and financing of Officenet, an office supply distributor in Argentina and a pioneer in both catalog and Internet channels. While the company is possibly an acquisition target for one of the large U.S.-based office supply distributors, the entrepreneurs have to do a lot of work before they can realize an exit. They have to decide in which direction to grow the company and how to finance this growth. Specifically, a commercial paper program seems feasible in the near future and the entrepreneurs




















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have to decide on its size. Capital Alliance Private Equity: Creating a Private Equity Leader in Nigeria

HBSP #800104 26p

Nigeria, telecommunications, 100 employees, 1998

Describes the creation of the first private equity fund in Nigeria and the fund's potential first investment in a Nigerian telecommunication service company. The fund's managers are keenly aware that a bad first investment could create a vicious circle for the fund. Thus, whether to invest and under what terms is of crucial importance. Can also be taught as a country case on Nigeria with a focus on entrepreneurship, telecommunications, and venture capital. Allows assessment of an investment opportunity in an entrepreneurial telecommunications firm in Nigeria.

Spotfire: Managing a Multinational Start-Up

HBSP #899078 19p TN #801191

U.S. and Sweden, software, 40 employees, 1998

Spotfire, a software start-up, must address the question of dividing its effort between Sweden and the United States in addition to raising venture capital, obtaining new customers, and managing early-stage growth.

Georgian Glass and Mineral Water

HBSP #899081 19p

Republic of Georgia, bottled water, 1997

Describes Georgian Glass and Mineral Water (GGMW), a company created in 1995 by a Georgian entrepreneur and Western investors in Georgia (former Soviet Union) to bottle and market the famous mineral water from the Borjomi valley. At the height of the Soviet Union's power Borjomi was Georgia's leading export product with 450 million half-liter bottles per year. During the early 1990s, however, Borjomi factories suffered underinvestment, theft, and neglect. GGMW's management needs to raise additional financing in order to fully capitalize on the market opportunity. Furthermore, management is faced with serious operating challenges in a newly privatized economy.

II: CREATING AND STARTING THE VENTURE

Chapter 5: Creativity and the Business Idea

E Ink HBSP #800143 10p

Cambridge, MA, high technology, 35 employees, 1998-1999

E Ink is a high technology start-up attempting to revolutionize print communication through electronic ink displays. The founders and top managers of this two-year-old firm are striving to translate a technological breakthrough into a working prototype, move from prototype to full-scale manufacturing, and maintain market excitement about the company. At the same time, they are dealing with a fundamental organizational concern: how to retain E Ink's

















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creativity, drive, and sense of fun while focusing the company on growth and the demands of a first product introduction.

Ken Hakuta: AllHerb.com

HBSP #899250 24p

Maryland, e-commerce

Entrepreneur Ken Hakuta started a number of consumer-oriented ventures, becaming well-known as "Dr. Fad," the initiator of the "Wacky Wallwalker" toy craze in the 1980s. Wishing to strike out in an exciting new direction in 1998, he capitalized on his long-standing interest in herbal medicine to found AllHerb.com, the first e-commerce company devoted solely to herbal remedy products and information. This case gives students a close look at the challenges facing an experienced entrepreneur who wants to establish an organization unlike any other he has started previously.

WebSpective Software, Inc.

HBSP #800136 28p

Massachusetts, web software, 40 employees, 1997-1998

Describes the situation at WebSpective, a software company that develops products to help companies manage the network of servers that support their Web sites. Describes the use of "concept engineering" tools to interview customers, determine their needs and the resulting product requirements, and prioritize these requirements as the basis for a product and marketing strategy.

Corporate New Ventures at Procter & Gamble

HBSP #897088 24p


Consumer products giant Procter & Gamble is faced with an urgent need to revitalize new product innovation. As part of this effort, the company's top executives form a small, autonomous, cross-functional Corporate New Ventures team. The team invents a systematic approach to gathering information and producing creative ideas for radically new product categories. Illustrates approaches to creativity, innovation, and entrepreneurial activity in a large, well-established firm.

Chapter 6: Legal Issues for the Entrepreneur

Napster HBSP #801219 29p

United States, music, 1999-2000

Describes the legal battles faced by Napster, the popular Web site for finding and downloading music files through the Internet. Traces the evolution of copyright law as it has been interpreted in recent cases around digital music. Focuses on the recent suit against Napster by the Recording Industry Association of America (RIAA), and involves the RIAA's arguments alleging that Napster constitutes illegal infringement, and Napster's response that it does













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not. Multi-Jurisdictional Compliance in Cyberspace

University of Hong Kong #HKU063 17p TN #HKU064

Information technology

Law, by definition, was jurisdictional, yet in cyberspace it had become increasingly questionable whether laws regulating the physical marketplace could be superimposed onto this new marketspace or were altogether redundant. The collapsing of time and space that Internet-based commerce enabled had huge implications for international trade. This case outlines the international implications of "doing business" on the Internet. While the issues of "multi-jurisdictional compliance" are wide-ranging, an example in the case draws attention to the protection of intellectual property rights. In particular, issues related to the use of trademarks on Web sites, in hyperlinks, or as metatags are raised, as are the implications for registered trademark owners in cyberspace. Draws attention to the problem of applying laws to the Internet; and highlights issues regarding "multi-jurisdictional compliance" arising from conducting business on the Internet.

DigitalThink: Startup

HBSP #898186 28p

California, Internet/training, 1 employee, 1996

Describes a recent MBA's attempts to start a business aimed at corporate training via the Internet. Describes the very early efforts at finding an attorney, accountant, and financing, and the interrelationships among these choices.

Palm Computing, Inc. (A)

HBSP #396245 11p

Silicon Valley, CA, computer software,

Discusses patents, licenses, and deal making in a start-up venture. The entrepreneur, Jeff Hawkins, holds a patent on Palm Print, a pattern recognition algorithm. After licensing Palm Print to his employer, he led three years of development of commercial products for the company. Focuses on Hawkins's efforts to start up a new, noncompeting venture that requires cross-licenses for the Palm Print enhancements. The employer wants Hawkins to stay to develop the new products "in-house," so resists making an agreement.

Chapter 7: The Business Plan: Creating and Starting the Venture

The Evolution of eCoverage in the Online Insurance Market

HBSP #400081 22p

California, online insurance, 1998-2000

Charts the birth and growth of eCoverage, an online insurance company. David Riker, the founder and chairman, describes the various phases of company development, such as presenting a business plan, gathering a management team, getting the word out, and


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running the site. @Hoc: Leveraging Israeli Technology in the United States

HBSP #800264 37p

US/Israel, software, 10 employees, 1999

Describes @Hoc, an idea for an Internet software company, developed by two HBS MBA 1999 graduates, Guy Miasnik and Ly Tran. @Hoc's software, loaded into a browser, enables instant, context-sensitive information retrieval and shopping. @Hoc's R&D team is located in Israel while the rest of the company is located in Boston. By July 1999 the entrepreneurs have developed a high-level prototype, written a business plan, and are seeking to raise approximately $1 to $1.5 billion. The entrepreneurs are trying to determine at what valuation they can raise capital and whether they should raise more capital than originally planned. A unique feature of this short case is that it contains an adapted version of the original business plan.

Walnut Venture Associates (A): RBS Group Investment Memorandum

HBSP #899062 32p TN #899240

Massachusetts, software, 10 employees, 1998

Describes the Walnut Group's investigation of the RBS Group, a young software company. Includes the RBS business plan and asks students to analyze which issues/assumptions are critical, and how they can be resolved.

Asia Renal Care HBSP #800243 38p

Hong Kong, health care services, 1 employees, 1997

Presents a business plan for a start-up company focused on providing dialysis services in Asia. The business plan includes a detailed financial forecast and a software version of this financial model is available. Students have the opportunity to run various roll-out strategies and focus on different Asian countries.

Staples: A Year in the Life of a Start-Up

HBSP #800241 21p

Boston, MA, retail/office products, 46,000 employees, 1985

Provides information on the development of the office superstore concept, building partnerships, creating the business plan, and recruiting a management team. Focuses on the detailed level of decision making required to transform an idea into a viable business. Heavy emphasis is placed on operating plans and integration. The case decision focuses on choice of IT systems and the importance/difficulty of building a fully integrated system.

Chapter 8: The Marketing Plan

MarketSoft HBSP #800069 27p TN #801143

Massachusetts, Internet, 20 employees, 1999

Greg Erman and Nancy Benovich-Gilby have assembled a team and selected a market for the launch of a high-potential venture based on using an Internet-based service to manage the flow of sales leads between principals and their distribution channel partners. The case focuses on



















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the process for selecting target market customers, interviewing them, and determining their functional requirements.

Granny’s Goodies, Inc.

HBSP #500049 21p

Marketing promotional material, 10 employees, 1999

The young entrepreneurs of Granny's Goodies, Inc., a corporate gift package specialist, face the challenge of finding ways to create consistent revenue streams and reduce sales costs. Outside of a few long-term contracts, the two founders have had to work very hard for each sale. Using extensive customer information that the firm has diligently collected over the previous two years, students need to develop a plan that covers market selection, product policy, and relationship management strategy for the firm.

Dell: Selling Directly, Globally

University of Hong Kong #HKU069 28p TN #HKU070

China, PC, 1998 One of the first companies to practice the highly-touted business-to-consumer Internet business model, Dell entered the PC market with a force and shook up the industry with its revolutionary, customer-oriented streamlined distribution style. Selling PCs online was a natural progression to Dell's existing strategy; Dell realized this synergy early and was the first market entrant. This case tracks Dells' evolving business and industry and highlights its entry strategy for China.

Chapter 9: The Financial Plan

Asia Renal Care HBSP #800243 38p

Hong Kong, health care services, 1 employees, 1997

Presents a business plan for a start-up company focused on providing dialysis services in Asia. The business plan includes a detailed financial forecast. Students have the opportunity to run various roll-out strategies and focus on different Asian countries.

Superior Clamps, Inc.

HBSP #196040 3p TN #197051

An investor is asked to prepare pro forma financial statements as a basis for a third-party investment in his new company. The investor must make a number of accounting policy decisions.

Chemalite, Inc. HBSP #177078 3p TN #188021

Chemicals, 1974 A chemical engineer who has set up a company to manufacture and market one of his inventions is trying to prepare his state of the corporation report. This case is designed to serve as a vehicle to introduce students to basic bookkeeping and accounting functions.

Chapter 10: The Organizational Plan Richard Spellman (A)

HBSP #801202 28p

United States, computer hardware, 2000

Describes Richard Spellman's decision to leave his existing employer and join an Internet start-up as CEO. Focuses on the terms of a restricted stock agreement and employment agreement that















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must be negotiated. Includes first drafts of these two agreements.

3Plex.com HBSP #801152 20p

Cambridge, MA, transportation, 10 employees, 1999-2000

A start-up team is faced with the challenge of building a senior management team with relevant industry experience. The marriage of e-commerce and the transportation logistics industry creates unusual problems in blending "old economy" employees and employee practices (compensation/equity) and company cultures.

Verge Software (A)

HBSP #601065 23p

California, software, 20 employees, 1999

Scott Rozic, CEO of start-up Verge Software, has just told his board that he is taking the company in a new direction, moving from enterprise knowledge management software to Internet direct marketing. This case covers the start-up of the business, Rozic's mentoring by a key angel investor, and the question of whether this decision is wise or whether Rozic should go back to the enterprise business, now that venture capital funding preferences have shifted once again. Illustrates the role of a mentor capitalist (angel investor) in a entrepreneurial venture. Also explores the heavy influence of venture capital on business strategy and formulation. Stimulates discussion of the relationship between the CEO and the board of directors.

Staples: A Year in the Life of a Start-Up

HBSP #800241 21p

Boston, MA, retail/office products, 46,000 employees, 1985

Provides information on the development of the office superstore concept, building partnerships, creating the business plan, and recruiting a management team. Focuses on the detailed level of decision making required to transform an idea into a viable business. Heavy emphasis is placed on operating plans and integration. The case decision focuses on choice of IT systems and the importance/difficulty of building a fully integrated system.

III. FINANCING THE NEW VENTURE

Chapter 11: Sources of Capital Silicon Valley Bank

HBSP #800332 18p

California, banking, 590 employees, 1999

Silicon Valley Bank, a $4 billion institution in California, has made its reputation by working with venture capitalists in backing start-up companies. In 1999, it is forced to compete with non-bank financial institutions that can give money on better terms and in a market that is driven by momentum rather than fundamental value. What strategy should it use? The larger question: What is the appropriate role of bank financing in private equity? This case introduces students to the myriad












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of financing options for start-ups. Virtualis Systems (A)

HBSP #800003 29p TN #802020

California, Web-hosting/Internet, 18 employees, 1999

Describes a second-year MBA's attempts to make money for a fledgling Web-hosting business. As the case ends, he must both sort out the company's business model and financing needs, as well as select from an array of financing and acquisition alternatives.

Kendle International, Inc.

HBSP #200033 25p TN #201014

Cincinnati, OH, contract research, 300 employees, 1997

Candace Kendle and Christopher Bergen, the CEO and COO of Kendle International, Inc., are reviewing ways to finance the growth of their privately-owned company. Kendle is a contract research organization that conducts clinical drug trials for pharmaceutical and biotechnology companies. To compete more effectively, Kendle plans to grow through international acquisitions. It is now time to decide whether to go ahead with a full program of two European acquisitions, a large debt financing through Nationsbank, and an initial public offering to repay the debt and provide cash for future acquisitions. The falling stock prices of Kendle's competitors add pressure to the situation.

Boston Duck Tours – 1996: Has Boston Gone Quakers?

HBSP #898189 21p

Boston, MA, entertainment/ tourism, 30 employees, 1996

While on vacation in Memphis, former investment manager Andy Wilson discovers a unique "tour bus" that travels over land and through water. He decides to transplant the concept to Boston. As he tries to start-up Boston Duck Tours, Wilson must figure out how to organize and fund the new venture. He has no relevant experience and very little money to invest in the start-up. The market is untested and, at best, seasonal. Furthermore, the regulatory barriers are high. Wilson's persistence and creativity provide some solutions, but create additional challenges for Wilson when it comes to harvesting financial value. The limited partnership that is created to provide financial resources brings new challenges with implications for future growth and harvesting value.

Chapter 12: Informal Risk Capital and Venture Capital Zaplet, Inc. (A) HBSP

#601165 28p

Redwood City, IA, high technology, 100 employees, 1998-2000

Start-up Zaplet, Inc, has radical software, prestigious venture capital funding, and a multitude of business opportunities. New CEO Alan Baratz must select a strategy and redesign the organization to deliver. This case describes the roles and philosophies of the founders and the Kleiner, Perkins venture capitalist firm in














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building the company, the creation of the options for various business applications, and the process of selecting a business focus. Issues include the role of experimentation in selecting a market for new technology, the influence of venture capital, the importance of recruiting key employees, transitions for founders, and matching organizational form to strategy. The key decision is how to further focus the company.

eSurg (A): Negotiating the Start-Up

HBSP #201050 22p

Seattle, WA, medical supplies, 2 employees, 1999

The founders of an online medical supplies firm must negotiate with an established hospital distributor and a venture capital firm. Explores negotiation and the structure of venture capital deals.

AsiaMail.com: What’s in a Name?

HBSP #800132 32p

San Mateo, CA, Internet, 1999

Three founders of an international Internet company (e-mail based marketing) struggle with naming the company. As they prepare to invest more than $10 million of first-round venture funding in advertising and marketing, they search for a name that will have power and breadth – but will be simple and functional in many different Asian countries. Provides an overview of systematic design and launch of a new venture – with substantial background on the venture capital funding process.

Hotmail HBSP #899165 39p

Silicon Valley, CA, Internet, 40 employees, 1996-1997

Describes the efforts of Sabeer Bhatia, co-founder and CEO of Hotmail, to finance and grow this business, which is based on free Web-based email. Describes early, successful efforts at raising several rounds of venture capital and presents choices around a next stage of financing.

IV. MANAGING, GROWING, AND ENDING THE NEW VENTURE

Chapter 13: Preparing for the New Venture Launch: Early Management Decisions

AGENCY.COM (A): Launching an Interactive Service Agency

HBSP #800061 11p TN #801014

New York, NY, consulting, interactive services, 1,000 employees, 1995-1999

Having recently launched one of Silicon Valley's first start-ups, co-founders Chan Suh and Kyle Shannon ponder whether their interactive consulting firm is prepared to bid for work from a very large client. Explores the strategic, organizational, and managerial challenges facing an entrepreneurial professional service firm offering Internet-related services.















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Vermeer Technologies (A): A Company is Born

HBSP #397098 10p

Cambridge, MA, computer software, 10 employees, 1994

Charles Ferguson has just heard from a venture capital (VC) consortium that it is willing to finance Vermeer Technologies, a company he has co-founded for developing Internet software. The funds are sorely needed, but the VCs have imposed some onerous conditions, including a request that Vermeer's first CEO be an outsider. Identifies several tasks that need to be performed before a business idea can be realized as a business entity. Highlights the process of early product definition and the key role of employee selection in building an organization.

Bitstream HBSP #393055 15p TN #898255

Boston, MA, software, 200 employees, 1992

Focuses on the new CEO of a growing software firm, the culture he's tried to create, and the need to hire a manager to spearhead a new product division. Includes details on how the search was conducted and presents resumes of four candidates who are being considered for the position. Designed to allow students to think through the recruitment, selection, and interview process.

Chapter 14: Managing Early Growth of the New Venture

Infinata: The Quest for Human Resource Venture Capital

HBSP #201032 13p

Massachusetts, software, 3 employees, 2000

A potential start-up in the Web-based Customer Relationship Management (CRM) software space considers a deal with a software developer. This case helps teach negotiation.

Beansprout Networks

HBSP #801079 15p

Cambridge, MA, e-commerce, 1999-2000

Beansprout Networks is a 3-year-old Internet company designed to foster effective communication between parents and the pediatricians and child care providers who care for their children. It has attracted considerable attention from both venture capitalists and health care analysts. Founder James Chung must now examine his internal strategy, given his desire to maintain a strong, vital, entrepreneurial culture amid rapid increases in head-count, the increasing need for structure, and the continuing challenges of combining both high-tech and high-touch skills.

Ethan Berman at RiskMetrics Group (A)

HBSP #400066 13p TN #401016

New York, NY, risk management, 70 employees, 1999-2000

Ethan Berman, CEO of J.P. Morgan's risk management spinoff, has grown RiskMetrics Group from a small team of 30 to a 70-person firm contemplating an IPO. Along the way, the consensus-based decision-making process that he espoused started to prove unwieldy; his personal


















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and informal managerial style also could not meet the growing demands on his time. More senior managers were needed – but who? Could the unique, informal culture of the group be maintained as it grew into a mid-sized firm? How should Berman go about making these decisions?

ZOOTS: The Cleaner Cleaner

HBSP #801114 23p

United States, dry cleaning, 200 employees, 1997-2000

A successful entrepreneur (retailing) starts a new venture in dry cleaning. The case focuses on transferable models, skills, and knowledge from one venture to the next. Areas of emphasis are managing growth, challenges of operations, financing, and competitive moves.

Chapter 15: New Venture Expansion Strategies and Issues

VacationSpot.com & Rent-A-Holiday: Negotiating a Trans-Atlantic Merger of Start-Ups in the New Economy

HBSP #800334 27p

US/Belgium, services/tourism, 60 employees, 1999

Describes a potential trans-Atlantic merger between two young companies in the Internet space. VacationSpot.com, based in Seattle, and Rent-A-Holiday, based in Brussels, both offer on-line listings and reservations for independent leisure lodging (i.e., villas, apartments, and bed & breakfast places) around the world. Both companies were started in 1997. At the time of the case (April 1999) the two companies are world-market co-leaders and discussing a merger. While the lodging inventory of both companies is very similar, their most recent post-money valuations have a ratio of approximately 9:1. Merger negotiations have come to a standstill over the valuation issue. Both sides need to decide whether to restart negotiations and what terms to propose.

TelePizza HBSP #899080 22p

Spain, restaurants, 1998

TelePizza, Spain's leading chain of pizza restaurants and delivery services, has experienced rapid growth to 500 stores since its creation in 1987. The company went public on the Spanish stock market in late 1996. Franchising played an important role in the firm's expansion to date. For further growth, the founder and CEO is contemplating three strategies: further expansion in Spain, international expansion, or the creation of new restaurant concepts. Permits a rich discussion of growth strategies and of growth rates implied in a firm's stock market valuation.

Singulus HBSP #899074 15p

Germany, CD metallization, 1995

Describes Singulus, the compact disk metallizer business of Leybold AG, a large German company, which has been put up for sale. In April 1995, buyout firm Schroder Ventures has to
















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decide whether to acquire the business. The investment decision is complicated by a number of factors, including Singulus' assets, which at this stage consist primarily of intellectual property and a customer list.

Vermeer Technologies (C ): Negotiating the Future

HBSP #397081 6p TN #600152

Cambridge, MA / Redmond, WA, software, 1995

The success of the Vermeer software offering suddenly transforms the start-up into a sought after company. After arduous negotiations, Vermeer management is faced with the choice of continuing as an independent company or being acquired by Microsoft or Netscape. Requires students to make a critical decision, thus helping them understand the process of strategic decision making. A detailed description of Vermeer management's approach during acquisition negotiations helps students reflect on negotiation strategy.

Pandesic: The Challenges of a New Business Venture (A)

HBSP #399129 18p TN #399131

Silicon Valley, CA, Internet, 100 employees, 1996

Pandesic is a joint venture of SAP and Intel designed to develop turnkey information architectures for marketspace companies. The case explores the problems of developing the joint venture from the perspective of its general management. Describes the development of its strategy and organization. At the end of the case, performance is poor and Harold Hughes (Intel) steps in from his position as part-time chairman to run Pandesic.

Chapter 16: Going Public

W.R. Hambrecht + Co.: OpenIPO

HBSP #200019 18p

San Francisco, CA, finance, 100 employees, 1999

OpenIPO is a new mechanism for pricing and distributing initial public offerings. The system, which is based on a Dutch auction, represents an attempt by the investment bank W.R. Hambrecht + Co. to change the manner in which IPOs are underwritten. The case provides a setting in which to discuss the existing set of institutional arrangements relating to the underwriting of IPOs, including the well-known phenomenon of the initial-day spike in price. Also provides a vehicle for discussing the informational efficiency of stock prices and the role of intermediaries and markets in providing investors with company-specific information. Can be used to talk about the issues raised by electronic trading and the distribution of securities over the Internet to relatively uninformed individuals.














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Amazon.com: Going Public

HBSP #899003 32p

Seattle, WA, retail/e-commerce, 250 employees, 1997

Amazon.com, an early pioneer in electronic commerce, prepares its initial public offering in the face of turbulent market conditions. Joy Covey, Amazon.com's CFO and the case protagonist, discusses the risks and opportunities of going public and the nature of electronic commerce business models in comparison to traditional land-based retail models. This case presents an opportunity to discuss the public offering process and the inter-relationship between a young company's financing strategy and business strategy.

Preview Travel (A)

HBSP #899085 19p

Silicon Valley, CA, e-commerce / Internet, 1997

Preview Travel was a leader in the online travel industry, having generated $80 million in bookings in 1997 and growing at a 34% compound annual growth rate per quarter. This case describes the evolution of Preview Travel's business plan and financing strategy and highlights a financial turning point that the company faced in August 1997. At that point, the company was in need of an additional cash infusion and had received strong indications of interest from a major U.S. media company. However, an investment bank advising Preview Travel believed that the firm could garner a higher valuation in the public market, and recommended that it consider an IPO as an alternative means of raising capital. Closes with the question of whether Preview Travel should accept a "sure" but low offer from the media company or pursue an accelerated and potentially risky IPO.

Teleswitch (A) HBSP #898207 38p TN #899053

Memphis, TN, telecommunications, 200 employees, 1996-1997

Describes the financing history of Teleswitch, a maker of small digital telephone switches for the wireless/cellular industry. As the case ends, Teleswitch is revisiting its selection of an investment banker for its hoped-for IPO. Explores the underwriter selection and IPO processes.

Chapter 17: Ending the Venture

Mandic BBS: An Entrepreneurial Harvesting Decision

HBSP #899082 22p

Brazil, Internet service, 100 employees, 1998

Describes Mandic BBS, one of Brazil's first Internet service providers. In April 1998, with competition increasing and its venture capitalist financier looking to exit the investment, Aleksandar Mandic must decide which potential investor offers the best fit with his company and













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at what valuation and under what terms he is prepared to sell. Interested parties include a group of U.S. financial investors, an Argentine company with broad telecommunications ambitions in Latin America, and another Brazilian ISP. Allows students to assess harvesting options for Internet entrepreneurs and valuation of Internet access providers based on a detailed business plan.

The Pellegrins (A)

HBSP #899009 12p

A father and son working together in their family-owned publishing company are at a decision point because the son feels he is ready to become president at the age of 31.

Flagstar Cos., Inc.

HBSP #299038 35p

Spartanburg, SC, restaurants, 93,000 employees, 1995-1997

A large restaurant chain undergoes an LBO and subsequent recapitalization. Financial and operating problems at the company force it to consider various restructuring options, including a "Prepackaged" Chapter 11 exchange offer to its public bondholders. Students assess the financial soundness of a leveraged recapitalization; learn the basics of U.S. bankruptcy reorganization practices, including prepackaged Chapter 11; and understand the special problems presented by the restructuring of publicly-traded debt.

The Fojtasek Companies and Heritage Partners – March 1995

HBSP #297046 25p TN #298162

Dallas, TX, building materials, 1995

The Fojtasek Companies, a family business, faces several financing choices to address generational succession issues. Several buyouts have expressed interest in acquiring the firm outright; an investment bank has proposed a leveraged recapitalization; and a private equity group, Heritage Partners, has proposed a hybrid transaction.










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