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Solution Id Length Case Author Case Publisher
2429 1316 Words (5 Pages) William A. Sahlman, Michael J. Roberts Harvard Business School : 915543
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In spite of good insight and remarkable image in an organization, approving the entrepreneurship is best practice in getting and generating the revenues. We can ramp up sales in business by adopting better tactics. Stern and Foster moved their attention in achieving the term sheets and left their previous employment. Although they have good insight into the organization, they prefer entrepreneurship because of the remarkable achievement in the financial projection. The capacity of the business owner to deal intelligently can lead to a strong tie between the organization and its personnel. In addition, they signed a founders' agreement when they founded this firm, in which they committed to spending 50 percent of their shares upon merger and the remaining 50 percent at a rate of 2 percent every month. 

Following questions are answered in this case study solution:

  1. What do you think about the entrepreneur’s financial projection for WebTracker? Are they reasonable or too optimistic? 

  2. If you were Stern or Foster which term sheet would you accept? Give your reasoning on strengths of each VC firm, the details of their firm industry norms for series A financings, and incentive mechanism.

  3. If you were Stern and Foster, what terms you would you negotiate with VC investors? Think about what your strengths are in negotiations regarding the specific terms. 

Case Study Questions Answers

1. What do you think about the entrepreneur’s financial projection for WebTracker? Are they reasonable or too optimistic? 

Entrepreneur’s financial projections are helpful in maintaining and growth for the company. The two cofounders of the company found a great idea and started sharing in the entrepreneurial drive for the betterment of the company. Foster, an MBA graduate from a top-tier Midwestern business school and Stern, was a great computer science grad from an East Coast technology institute. They both work together and find it profitable and enhance their business plan. They developed a software prototype in the first half-year of struggling. 

I think they are reasonable and quit their previous job and discussed the idea of financial prediction with their bosses, but they did not disclose the whole concept of the prototype. They told the VCs [venture capitalists] the truth about the situation, and they talked to their lawyers and appeared to feel better. Site creators would just connect to the SAAS platform and code their website. It is observed that they could go back and highlight text, links, buttons, and other components of a website after they finished it. Using a menu-based interface, they might specify the data they intended to gather about that area. For example, the system may capture the customer's cursor's first location on the site, their "hover" duration over any area of the page, the previous website they viewed before arriving at the present site, where they want to go next, the links they clicked, and so on. 

Evaluating the Web tracker is estimated that approximately $15 million in funding is required to fulfill the profitability. They can fund their growth because they thought $14.5 million should be provided. The sales ramp up and start real traction when the SAAS model has been used. After using this model, the sales and building share momentum eventually become high and gain profit. By spending precious time in meeting with venter capitalistic in trying to increase up to 2.5 $ million, they ultimately get VC firm and norms. The idea of working together leading the high pace in the market and their continuing struggle results in achieving the term sheet. They quit their previous job and found excellent results after observing the financial projection of the web tracker. They hit different and find interest in working together, although work with collaboration and fundamental dignity can make things possible and successful. Acquiring effective strategies in a business plan can ramp up the sale and be helpful for the company's growth. 

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