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Venture Capital Vignette Case Study. By MTiPO : Desiree Fabunan Yee Han Kuan Svyatoslav Mishchenko Patrick Lin Ngai Lung Wenhan Zhou. Analysis Tools. Competitive Analysis (SWOT) Include feedback from customers and potential customers Analysis of trends and demographics

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Venture capital vignette case study l.jpg

Venture Capital Vignette Case Study

By MTiPO:

Desiree Fabunan

Yee Han Kuan

SvyatoslavMishchenko

Patrick Lin Ngai Lung

Wenhan Zhou


Analysis tools l.jpg
Analysis Tools

  • Competitive Analysis (SWOT)

    • Include feedback from customers and potential customers

  • Analysis of trends and demographics

    • Compare to Sarah's marketing strategy

  • Approach select trusted board members for opinions

    • Don't involve a divided, dissonant board

"The Product is Great But Nobody Is Buying"


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Addressing the Problem

  • If CEO is ignoring Sales Manager's advice:

    • figure out why

    • explain analysis of current situation

    • establish Sarah's authority on Sales

  • If Sales strategy problem:

    • Re-assess Sarah's strategy given completed analysis

    • Address strategy changes with board

"The Product is Great But Nobody Is Buying"


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The Board’s Involvement

  • Assuming Sarah is correct...

    • Evaluate how Sales strategy is handled internally

    • Make changes to address these issues

    • Re-evaluate Tuck's responsibilities to address conflicts of opinion regarding Sales strategy

"The Product is Great But Nobody Is Buying"



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To Get Good Money by Investing Good Money

Liquidation Preference(3.375X) to Protect Downside

Participating Preferred so that VC can get Upside from investing in a down round

"Ante Up or Fold"

Capped Liquidation (50 Million) so that Management is still motivated to perfrom

2.5 Million to be invested in Tranches


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Ensuring the Good Money Stays good

Motivating Management

Vesting Schedules for Nonqualified Options:

-Equally over 4 Years with first year cliff

-To retain management to successful exit and post Exit

Strike Price = Share Price for this Round

-Ensure that management is motivated to increase stock price

Current Salary Reduced

-Reduce Compensation so that there is buffer cash to reach next round

-Restore Salary when company makes a profit or get next round of funding

Ensuring a Good Investment

-Go for Board meeting

-Be committed to the company`

-Seek series C investment

-Help to build Sales Team

-Seek Consultants for Commercialization of technology

-Assist company by using personal network

"Ante Up or Fold"


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What makes a good board of directors?

  • Balance of power between VCs & Founders.

  • Good mix of expertise

  • Committed to the company.

  • Synergy within the board

  • Wide network and influence.

  • Ability to bring in cash when necessary.

  • Increase company credibility.

  • Clear understanding of the operational, and strategic plans of the company

  • Industrial experience and knowledge.

  • Visionary

"Ponderant Technology"


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How should the issue be resolved?

Solution: Bring in Craig into the board and move Mark Segras to the unaffiliated position for a fixed period (6 months) until the company finds a suitable candidate as the “marquee” director.

Essential board members:

  • Craig: the major investor in the current round of funding.

  • Dan: CEO of the company, knows best about the company.

  • Hardy & Don: Co-lead investors, need to know where the money channels into.

    Rational for Jennifer to be the 5th board member:

"Ponderant Technology"


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How should Dan best make that resolution happen?

  • Talk to Rockwell Intl about the change of board of directors. To prevent any dispute/conflict on Intellectual Property rights (IP)

  • Talk to Mark prior to the changes. Explain to him the rationale behind the decision.

  • Talk to other board directors to seek consent/views.

  • To seek approval from the board about the plan for putting Mark as the unaffiliated board member.

"Ponderant Technology"


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