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EZAmuse Negotiation (B) Georg von HaufenGeld Background Case Solution

Solution Id Length Case Author Case Publisher
1304 691 Words (2 Pages) G. Felda Hardymon, Ann Leamon Harvard Business School : 807169
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The case revolves around the complex situation faced by EZAmuse Communications Inc (EZAmuse) and Torten im Himmel (TIH), with both companies having somewhat analogous views. With the launch of its new product anticipated by consumers to hit the market, EZAmuse needs to raise debt financing to meet the financial break-even for the company. This gap for financing has caught the attention of TIH which has been waiting for quite some time to make its entry into the North American market.

Following questions are answered in this case study solution

  1. Issues

  2. Interests 

  3. Positions

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Case Analysis for EZAmuse Negotiation (B) Georg von HaufenGeld Background Case Solution

In order to analyze the case, it can be broken up into the following pointers:

1. Issues

The new CEO wants to raise full $10-12 million in order to avoid any hindrances to break even. Since RVP was not willing to invest more than 6 million for a 9 million exposures, EZAmuse had to look for alternatives for the B round debt financing during which TIH showed an active interest. With a total equity of $3 million being held by RVP, EZAmuse is off to a meeting with Georg von HaufenGeld who is the managing general partner of TIH. In order to save its credit rating, it is in best interest of the CEO of the company to strike a deal for B round financing that leaves no room for proceeding to the C round while the company currently wants to generate enough funds till the results of the new product are known after which it expects to get even a higher value for the C round. Hence, conflict of interest among the position that the CEO wishes to take as oppose to what the company initially aims.

2. Interests

Von HaurfenGeld has his priorities straight in terms of wanting participation, multiple liquidation preferences, seniority, voting by class, anti-dilution and a board seat. Among this list, the board seat held the top priority for him. He wanted this to be a starting point of his success in North America that could later be translated into further expansion and financial success for his company. For making this a reality, he was willing to strike a favorable deal with EZAmuse while keeping his interest intact.

On the other hand, the interest of EZAmuse was to deliver a product whose utility would commensurate with the expectations of the consumers and ensure profitability for which a B round of financing was due.

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