Entrepreneurial Finance and Private Equity

Class #6 – Monday, November 4, 2002

First Round of Venture Financing

Case: MinderSoft, Inc. (UVA-F-1346)

Network File: Mindersoft.xls

1. How good an investment opportunity is Mindersoft? What are the key strengths and weaknesses of the opportunity and business plan? What is the business model - how do they make money?

2. The pre-money valuations differ by a wide margin: Mr. Biddle places the pre-money value at $3 M, Mr. Chapin at $10M: Why do the values differ so?

3. From the entrepreneur's point of view, what is the company worth?

4. How will Novak Biddle Venture Partners evaluate Mindersoft?

5. If you were Steve Chapin, would you accept Novak Biddle’s offer or search elsewhere?