The O-Fold Innovation

The novel tells a story about a professor by the name of Rick Silver whose goal is to attain tenure in the University’s School of Business. In doing so he was given the opportunity to teach an executive graduate business course for management professionals. He used the course to introduce a host of business methodologies and philosophies that can produce success if used correctly, most importantly time management and theory of constraints. The novel also gives insight on how fast and constant the business industry is changing by highlighting the issue of falling enrollment rates at the University’s School of Business.

Walnut Venture Associates are a group of angel investors. In 1997 the club had around a dozen individual investors, forming an “angel group”. Their primary targets are investments ranging from $250,000 to $1,000,000. This is due to the gap of capital funds initiated by the VC’s from not considering investments bellow $1 million. Also, angel investors can acquire significant equity at low cost, and help the growth of the company with their knowledge and expertise. By selecting only the most exceptional people and ideas, investments in startups can lead to massive returns on relatively small investments. As unexperienced entrepreneurs, they are a key resource to have in order to achieve quick growth, and secure the company’s early stages.

Business angels usually invest in companies around their home so they can check up on their investments.

— Often, venture capital firms preserve an appropriate percentage of their funds to participate in follow-on fund raisings

This case is about Dave Armstrong, a 29 year old second year MBA student of Harvard Business School. Immediately after his graduation from a small liberal arts college in Texas, he started working for Thorne Enterprises as a computer Programmer. After eighteen months in the job, he quit to go into life insurance business in Amarillo. He applied to Harvard Business school but hadn’t considered what he would do, once accepted, he decided to go there as he and his wife wouldn’t have to compromise on their lifestyle as he would still be receiving renewal income from his old policy holders.

a) Apply the coefficient-of-variation decision criterion to these alternatives to find out which is preferred by the angel investor, assuming that he/she is risk-averse.

Zacharakis and Meyer’s research (1998) into the investment decision-making processes of VC investors is particularly pertinent to whether VC investments can be systematically improved and whether there are any gaps between understanding of their procedures and what happens in reality. Zacharakis, via studying 53 VCs from the two main start-up hubs in the United States (Silicon Valley and Colorado Front Range), establishes that there is a gap between the factors that affect VCs’ decision-making in reality and the factors that VCs identify as pertinent to their decision-making.

Private equity investments are primarily made by private equity firms, venture capital firms, or angel investors, each with their own set of goals, preferences and investment strategies.

Angel Investors - The main business angels vary from venture capitalists in their motives and level of involvement. Often angels are more involved in the business, providing ongoing mentorship and advice based on experience in a particular industry. For that reason, matching angels and owners is critical. There are substantial easily locatable networks of angels. Pitching to them is no less demanding than to a venture capitalist as they still review hundreds of proposals and accept only a handful. Often the demands around exit strategies are different for an angel and they are satisfied with a slightly longer term investment (say 5-7 years compared to 3-4 for a venture capitalist).

Walnut Venture Associates is a small group of angel investors with backgrounds in the software industry. RBS is a small software company that makes billing and enterprise management software specifically targeted at other software companies. RBS and Walnut are deciding whether Walnut should invest in RBS, and then if they are willing, whether RBS finds the terms of the deal satisfactory. This case memo illustrates that the venture capitalists are looking for good managers in a particular industry, while entrepreneurs typically think funding is dependent on having a good idea. It also discusses why or why not RBS and Walnut might be a good fit for each other.

Angel investors are those investors that are particularly interested in investing in companies early stage companies. Their investment capital is generally limited and if relevant, it has been advantageous for them to pool their funds as a group to not only participate in larger deals but also to diversify risk. They invest in exchange for ownership equity or convertible debt.

Another issue was the finance from the conventional sources which were reluctant to invest. They would need at least £235,000 to add to their own invest of £45,000 to cover the costs and operational losses for 12 months period. But, if it works out, then they would at £1 million profit by year five. Despite their enthusiasm and impressive CVs, the business angels deterred by their lack of experience in this market sector. However, they managed to get an appointment with Maurice Pinto, a private investor, who agreed to invest £235,000 for a 20 percent share in the company.

investors exist for larger amounts of capital such as VC funds and banks, entrepreneurial initiatives that require much smaller amounts to start with need to rely on friends and family or own savings. They then also make extensive use of bootstrapping techniques to mitigate their financial constraints, by boosting their short-term profits.

This case study begins with Paul Kennedy on a slow morning commute in Cleveland. During his drive, he’s worried about his wife and family, his boss, his associate, a stranger in a nearby vehicle, and even about the state of the Cleveland Browns. He is also excited about his plans to expand Daner Associates into the European market and his impending promotion to CEO. But when Paul meets with his boss, Larry, that afternoon, he discovers that he has been misreading signals. Larry is actually considering Paul for the number two role in the company and considering promoting another Daner executive, George, into the CEO position.

This case details the position of Carol Sullivan-Diaz, the 28-year-old daughter of Walter Sullivan who died at the age of 56. Walter had bought a Ford dealership in 1983 that eventually grew into what is now Sullivan Ford Auto World. The business sells cars but also services them. Carol is disappointed by current turnover in car sales and sees that the service revenues are below average for this size of dealership. Carol’s now has to decide what way to tackle the future. She can sell the business but will probably only return a value below what it might be worth if profitable or she can look at the operation and see if she can turn it around herself. While she has a bachelor’s degree in economics, an MBA degree and a