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Selected Case

published: 18 Dec 2009
  • Research Area: Decision Sciences
  • Industry: Venture Capital, Telecommunications
  • Region: Europe

Abstract:
Bredbandsbolaget is a broadband provider that started in the midst of the dot-com bubble in the late 90s. With very high capital expenditure requirements and having struggled to meet its business plan objectives in previous years, its majority investors are now faced with the dilemma of whether to extend further funding, and, if so, how to circumvent anti-dilution provisions that lie in the way of diluting co-investors that can not match them pro-rata.

Pedagogical Objectives:
The case presents a late stage, multi-round venture investment and the accompanying opportunities and problems that shareholder turbulence can engender. The objective is to provide a basic understanding of the problems, questions and deliverables typical in a multi-round VC investment by posing questions at a medium-to-high level of difficulty. Key learnings include: - Investment attractiveness and risk assessment - Portfolio fit and the investment horizon - Investment valuation based on DCF and comparable multiples - Term sheet structuring and anti-dilution provisioning

Keywords:
Venture Capital, Investor Growth Capital, Late Stage Investing, Exit Strategy, Bredbandsbolaget, Term Sheet, Anti Dilution Provisions, Valuation, Broadband, Add-On Acquisition, Acquisition Synergies, Opportunity Cost of Investment, Minority Shareholder Issues, Pro-Rata, Ntl


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