How Much and From Whom? An Exercise in Seed-Stage Financing

by: Tom Porter

Publication Date: March 29, 2011
Length: 8 pages
Product ID#: 1-429-165

Core Disciplines: Accounting/Finance, Entrepreneurship & Innovation

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Teaching Note

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The founders of start-up biotech company Chiral Intermediates have an important decision to make. How much money to raise? When? And from what kinds of funding sources? This exercise walks through the market for chiral intermediates (a material that reduces harmful drug side effects), this new company’s business model, and its quest for seed-stage financing.

Teaching Objectives

After reading and discussing the material, students should:

  • Assess capital needs realistically and raise sufficient funds accordingly.
  • Understand the trade-offs necessary when raising capital.
  • Estimate the optimal time frame for successfully completing fundraising.
  • Prioritize investor prospects based on complementary goals, focus, industry knowledge, and industry experience.