tale of lynx

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The Tale of Lynx case

The most critical choices faced by James Milmo, early in founding of Lynx are as follows:

Going to Business School or not?

He always wanted to be an Entrepreneur

He knew that a new business is a risk

So he wanted to make sure that if business does not work, he should be able to be back to Business School

Therefore he did first semester

It was a good decision as he was trying to play safe and he knew what he was doing to himself

Partnering with Doug Curtis or Not?

Doug Curtis was a Veteran Entrepreneur

Having worked with Doug on past ventures, James was aware of him and his skills

Idea of Real Estate failed and James Milmo does not have great confidence on him

No Trust Factor, No Compatibility between the
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It's Micromanaging!

VC is designed to fund early losses only

VC's target early, mid and late stage deals depending on their fund "mandate".

VC's care-abouts are Management, opportunity, size of market and the capital efficiency of the venture

The strategic demand was motivated by following factors:

The business was not being close to profitable

Advertising downturn hitting with full force

Investors (RazorsEdge) are vocal about their nervousness

The nervousness of investors created a pressure on the founders

James Milmo did not know , that such a situation would come

He could have avoided this problem in following ways:

By doing due diligence

By negotiating on Liquidation terms, to vary by 1x, 2x, 3x and not the first $29.5 M on any sales.

By not accepting minority in Board of Directors

By Creating External Network of Composite Board for guidance and to get a "Safe" Reality Check

In order to keep the VC terms "fair", he should have talked to several firms and seek more than one alternative term sheet.

If I were James Milano at the end of the case, my biggest worry is 'How to reach a consensus in decisions?'

The issues can be managed by sorting out the following dysfunctions:

Absence of Trust

Fear of conflict

Lack of commitment

Avoidance of Accountability

Inattention to results

These can be further sorted out by creating a Good 'Culture' in the organization, which is based on principles and
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