OutReach Networks is an uncommon start-up company in that it did not have to seek VC funding to support its increase and was prosperous in its development. The business may soon be a candidate for an IPO and has grown fast.
While the creator views some benefit from the VC's expertise in preparing the business for an IPO along with the funds enabling it to scale quickly, he cannot comprehend how the VC has arrived at this offer. The founder believes the funds should be worth no more than 15% of his company. Potential reasons for the disagreement over the valuation are (1) differences in the founder's and investor's perspective of the business 's danger, (2) disagreement over the appropriate set of comparable companies, and (3) differences in the methods used to compute the percent equity position. The case is appropriate for use in classes covering entrepreneurial finance or venture capital.
PUBLICATION DATE: October 31, 2012 PRODUCT #: UV6569-PDF-ENG
OutReach Networks First Venture Round Case Solution
This is just an excerpt. This case is about FINANCE & ACCOUNTING
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