Strategy for Venture Capitals free essay sample

Findings: Walnut Venture Associates: †¢The fact that Walnut is willing to offer $2. 5 million, $. 5 million more than what RBS is seeking suggests that Walnut is taking advantage of the situation by under valuing the company. †¢The current and future cash flow suggests robust financial standing of RBS. Although Walnut may not have a home run with the deal, it will be more than adequately compensated on its investment in near future. †¢Too much is riding on one man at RBS. There is no guarantee how would RBS perform without Bob O’Connor. RBS: †¢Current financial position suggests that RBS is already doing good with net positive cash flow. †¢They are seeking additional funding to expand their sale force so as to compound their revenue in near future. †¢O’Connor is right in thinking that Walnut is valuing his company lower. †¢Stringent control on the conversion of preferred stocks to common stock, heavily favoring new owners in case deal goes through. We will write a custom essay sample on Strategy for Venture Capitals or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Show here the PV of the future cash flows: Recommendations: Walnut Venture Associates: †¢To pull the deal Walnut needs to up tick its offer, may be in the range of $6. 5 to $ 7 million. RBS: †¢RBS should not haste to seal the deal. It should look for other options. †¢It should put his proposal to augment the valuation to $6. 5-$7 million range. Two VC firms joining. But by making MAVF majority share, the issue is that it is going against WVA’s business model.