Entrepreneurial Finance
and Private Equity
Class #8 – Monday,
November 11, 2002
Case: USInternetworking: Second Round (UVA-F-1273)
Optional Reading: Expansion projects can
also be viewed from a real options perspective.
“The Promise of Real Options,”
Aswath Damordaran, Journal of
Applied Corporate Finance, Summer 2000 is a good article stressing the
financial applications of real options. Expansion options are covered in
“option to expand,” pp. 38-43
Network File:
USi(second round).xls
- Assess
McCleary’s three-stage strategy for building USi? What implications does this strategy
have for the financing he will require.
- What
were the pre- and post-money valuations of the firm after completion of
the first round?
- Grotech
Capital originally passed on the opportunity to fund USi? What were Frank Adam’s concerns then? How valid are these concerns in
September 1998?
- Should
Frank Adams agree to participate in a second round for USi? To lead the round? If so, at what price?
If
you were Chris McCleary, at what price would you sell additional equity in USi?