Mindersoft Case Study

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Executive Summary Mr. Chapin, Your firm, Mindersoft INC., is considering a large investment from the VC firm Novak Biddle Venture Partners. Due to the magnitude of the investment you hired our firm, Team 1 Consulting, to aid in the valuation and decision making process. This report contains the findings of our firm and a formal recommendation to your firm on whether or not to accept We were directed to take an in depth look at a few key components of the investment: • Review the Novak Biddle’s investment criteria to ensure a good fit • Explore Mindersoft’s business model and ensure it will deliver a positive ROI • Conduct a pre and post-money valuation of Mindersoft We assigned our best consultants to take a look at the business model, industry and potential of Mindersoft, INC. We performed an analysis of the potential investment using the pre and post money method (the venture capital method) and discounted cash flow method of valuation. This report contains all the work, analysis, and interpretation of the results we found during the course of the project. Great summary of the report. Through these careful analyses are team was able to come up with the following conclusions and recommendations: • Mindersoft is undervalued at Novak Biddle’s premoney valuation of $3M. • Based on our valuation of $11.17M using the Venture Capital Method, Mindersoft should renegotiate the deal with Novak Biddle for a 15.19% equity stake, if they would like to keep their investment amount at $2M. • If Novak Biddle is willing to make a $1M investment and Mindersoft is willing to give a slightly higher ownership stake, we might be able to reach a common ground. • Due to the fact that Mindersoft does not have full patents on products and time is of the essence, investment is needed as soon as possible. • We urge a cooperative discussion with Novak Biddle on

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