Juniper Networks Case Solution
Question 1
Pradeep Sindhu’s Initial Fundraising Strategy
Pradeep Sindhu is the proud founder of Juniper Networks and an innovative entrepreneur. There are many sources of fund raising such asIPO; Asset based lender, Angel Investors, bank debt and venture capital firms.As Juniper Network is at its foundation stage, therefore in order to raise finance Pradeep Sindhu pursued the corporate venturing strategy and used seed financing from the venture capital partner.
Criteria for Selecting Venture Capital Partners
Initially Sindhu made cold calls to a different venture capital firms but the response was zero. Furthermore,he madea list of well-known companies that are famous for investing in network industry and networking companies and then ranked these companies. Sindhu selectedthe top most venture capital for the purpose of fund raising and selected Kleiner, Perkins, Caufield & Bayers firm( KPCB) as a venture capital partner as it is considered as the top most and most prestigious firm among the other firms.
Expectation from His Venture Capital Partners
It is expected that the role of the venture capital firms is to assist in formulating business objectives from the page to reality and give advice with respect to the corporate goals throughout the whole period of partnering. It is expected that the venture capital firms are the quickest and the leasts ource of fund raising, therefore Pradeep Sindhu expects from his venture capital to provide funds as early as possible on the lowest terms and to provide security with respect to all resources throughout the period of partnership.
The primary objective of venture capital firms is to maximize the wealth of the owner and of the company as well therefore, Sindhu also expects that the venture capital partner will also help to enhance the wealth of the company and of Sindhu as well. It is also expected that the venture capital firm will also help Sindhu in order to hire high quality and skilled employees, which could help the venture capital and Pradeep Sindhu in order to achieve desire strategic and business goals.
Change of Criteria
Initially, Sindhu’s objective was too engaged with the top most venture capital in order to raise funds. As he attained media attention and significant recognition among the venture capitalist, he changed the criteria of selecting partners and in the second round of fund raising, he pursued those firms which could add value to the company apart from finance and those which had the understanding about the operations of the company.
Question 2
Role of Venture Capital in the Growth of Juniper Networks
The roleof a venture capital in a newly formed company isto provide financial, legal, technical, marketing, operational and logistic support. In the growth of Juniper Networks, the venture capital firm (KPCB) plays an important role. It provides both financial and operational approaches to the company by advising and monitoring with respect to business processes.
In addition to this, KPCB also helps the company in order to hire high quality and skilled work force such as highly qualified and expert software engineers who play the key role in the success of the organization. Moreover, the venture capital firm KPCB helps the company in providing a faster finance and recognition in the market among other firms, which help the company to raise more finance in the second round of financing.
It was due to the venture capital firms that Juniper Networks was able to develop significant credibility among the network industry and among the ultimate consumers and current success owes to the venture capital, which helped the company to generate more funds through future generations which also helped Juniper Networks to expand its business operations in different countries as well as to establish worldwide distribution channels.
In addition to this, the venture capital firms helped Juniper Networks by creating values in the processes of the organization which provided the company a global and competitive advantage over other network companies by enabling the company to provide diverse portfolio to a greater number of customers as venture capital firms reduced the informational asymmetry, which created value towards both primary and secondary activities of the company...................
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