Finn-Barr Data Build, Case question business and finance homework help

OUTLINE FOR A CASE ANALYSIS

For this project there is a Business case example that needs to be read and analyzed. The outline for the case analysis is printed towards the bottom of the short story. Ones done reading the short story please answers the questions in the Outline for a Case Analysis. Make sure to put just the headliners for each of the questions 1-7. This must be in APA format and be 3 ½ pages long. Please let me know if this project will work for you.

Finn-Barr Data Build

Outline description

This business was formed by two graduates who met at university in 2002, one a computer scientist (Finn) and the other an accountant (Barr). Since leaving university they have both had successful independent careers but stayed in touch on a social basis. However, in early 2013 the IT specialist came up with an idea to collect and combine real-time market information on a niche business segment to support financial decision making by banks and investors. The concept uses most of the ‘big data’ tools increasingly commonplace in data and management information circles. However, Finn quickly realised he did not have much financial expertise and only limited savings to fund the development of the idea and approached Barr to see if he could help. The outcome of a discussion over a number of meetings was agreement to work together to set up a business to take the idea forward. A limited company was set up and by the start of 2014 the two directors had each used $5,000 of personal savings to fund some preliminary legal work and secure adequate intellectual property rights on the concept. Finn and Barr were still in full-time work with long-term employers; both are married with existing family and mortgage commitments. Both directors realised the business was still in a fledgling position with significant work to do. Funding was needed to test and build the data systems and market the product to a number of larger commercial clients. The business would probably take three or four years to develop in full, but in the next 12 months they needed $100,000 funding to take ideas forward and then hoped to generate initial orders followed by rising revenue streams in subsequent years. In January 2014, the projection was that first orders were unlikely before summer 2015 at the earliest. Looking further ahead, after four or five years, initial thinking was that the business should be sold. Although estimates of market growth and income were very tenuous, taking a medium-term view, if the business could eventually provide advice on one-in-ten deals in its market niche and get paid 1% of the associated revenue, this would be $3 million a year in full-year fee income with projected margins of over 50%. Neither of the two directors – nor immediate family members – had any significant cash savings to fund this longer-term development activity. In particular, neither director had any housing equity and both are too young to draw on pension savings funds. Indeed, the next phase of work would require at least one of them to give up employment to concentrate on the project full time. They looked at the opportunity for any grant aid but this appeared unlikely to be successful. The only way forward was to seek some form of equity investment as, in the short term at least, traditional debt funding was not an option. The size of the equity injection needed to fund the next stage of business development was well within the scope of a single business angel or a professional investment syndicate. However, both owners were worried about approaching this type of investor. This is because the size of the investment needed would be very significant compared with the stake the two founders held. They could not put in additional personal funds to avoid any equity dilution. Rather, they devised a strategy to persuade a larger group of investors to invest smaller amounts. The prospectus prepared suggested the business in a few years’ time will be worth $1.5 million and they sought people to collectively invest $100,000 for 25% of the company. If achieved, this would represent a 375% return over a three or four-year period. The funding plan acknowledged the project is still untested and carries a number of risks but the founders believe the potential for return to be very attractive to offset the risk. In order to avoid approaching business angels, Finn and Barr finally decided to use a crowdfunding equity platform to find investors. The project was listed on line for 12 weeks and secured 25 investors (typically investing $5,000 to $10,000 each with a range between $1,000 and $15,000). The money has been raised. Finn now works full time on the project and the directors hope to start test marketing in a few months’ time. However, no orders have been won yet and dividends to shareholders are still some way off. Discussion It will be several months at least before the likelihood of success for this venture is more evident. However, the funding strategy adopted by Finn and Barr was bold. Quite correctly, the prospects for any commercial debt funding were judged to be non-existent. The business at the time of the fund raising did not have a marketable product, let alone any orders. As a result, any external funding had to be based around equity. Rather, Finn and Barr were very strongly opposed to approaching traditional angel investors. The reasons for this were partly financial – notably the fear of dilution and control – but also linked back to the style of business they sought to develop. Finn especially was keen to involve data experts in his investor group and hoped the use of the crowdfunding equity route would offer a chance for very small investors to get involved. This appears to have been a success based on the size of the investments. Also, several alumni from Finn and Barr’s university year have reportedly made an investment. Many owners in the position of Finn and Barr would have welcomed the chance to work with experienced equity investors, especially if this brought management support and advice as well. The deliberate attempt to avoid this route was a bold step that in terms of fund raising has been a success. The other alternative source of funding, such as a loan or shareholding investment with an existing data services supplier or financial services business, does not appear to have been considered at all.

OUTLINE FOR A CASE ANALYSIS  

1)  EXAMINE AND DESCRIBE THE BUSINESS ENVIRONMENT

a)  Describe the nature of the organization under consideration and its competitors.

b)  Provide general information about the market and customer base.

c)  Indicate any significant changes in the business environment or any new endeavors upon which the business is embarking.

2)  DESCRIBE THE STRUCTURE AND SIZE OF THE BUSINESS

a)  Analyze its management structure, employee base, and financial history.

b)  Describe annual revenues and profit.

c)  Provide figures on employment. Include details about private ownership, public ownership, and investment holdings.

d)   Provide a brief overview of the business’s leaders and command chain

3)  IDENTIFY THE KEY ISSUE OR PROBLEM IN THE CASE STUDY

a)  In all likelihood, there will be several different factors at play.

b)  Decide which is the main concern of the case study by examining what most of the data talks about, the main problems facing the business,

c)  Examples might include expansion into a new market, response to a competitor’s marketing campaign, or a changing customer base

4)  DESCRIBE HOW THE BUSINESS RESPONDS TO THESE ISSUES OR PROBLEMS

a)  Draw on the information you gathered and trace a chronological progression of steps taken (or not taken).

b)  Cite data included in the case study, such as increased marketing spending, purchasing of new property, changed revenue streams, etc

5)  IDENTIFY THE SUCCESSFUL ASPECTS OF THIS RESPONSE AS WELL AS ITS FAILURES

a)  Indicate whether or not each aspect of the response met its goal and whether the response overall was well-crafted.

b)  Use numerical benchmarks, like

i)  a desired customer share

ii)  show whether goals were met

iii)  analyze broader issues

iv)  employee management policies

v)  talk about the response as a whole

6)  POINT TO SUCCESSES, FAILURES, UNFORESEEN RESULTS, AND INADEQUATE MEASURES

a)  Suggest alternative or improved measures that could have been taken by the business

b)   Using specific examples and back up your suggestions with data and calculations

7)  WHAT WOULD YOU DO?

a)  Describe what changes you would make in the business to arrive at the measures you proposed

b)  Include:

c)   changes to organization

d)  strategy

e)  management.