Walnut Venture Associates Case Study

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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.…show more content…
They should also see if Softrax offers a software solution which is truly different, and better than the competition. Can a larger company like Oracle create a similar product and outrun Softrax? RBS definitely looks in good financial shape, and if further research does not contradict the given information, they should be a promising venture to invest in. Perhaps Walnut will negotiate the terms of the investment to reduce the amount to $1 million. RBS would then either have to seek for different investors, or reduce their expansion plans accordingly. Planning the investment in order to exit after three years (2000) should be relatively safe and profitable. As Bob O’Connor, he should be careful when accepting investments from angel investors as they become business partners with them. They should therefore make sure they have similar views for future growth and goals of the company. Since Walnut specializes in software companies, Bob O’Connor should not worry whether the angels have the sufficient knowledge of the industry. The knowledge, money, and insights the group of investors brings would help accelerate the growth of RBS. While researching the topic, an article from June 27th, 2000 said that Softrax just received an additional $10 million in funding. A combination of separate investors including Walnut Ventures partook in that deal. We can conclude that Walnut did go for the investment in 1997, and that they likely met their 3 year

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