Entrepreneurial Finance

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Smartix

Finance 651: Entrepreneurial Finance

Instructor: Prof. Manuel Adelino

March 23, 2014

Section 402: 12:30 -2:45 PM

Prakhar Agrawal

Locker: 1173

1. I would not have accepted MSG’s offer. Although MSG is one of the biggest clients for Smartix, they have been very aggressive during negotiations and have a different vision for Smartix. Deal with MSG would lead to uneven distribution of power and resources. Additionally, MSG management wants the Smartix team to become their employees. This is against the very idea of starting a venture - an opportunity to work for yourself. The team cannot work independently under MSG. Also, Smartix product has not been tested at a big event. I would have taken the middle path and tested the product at more university and sports events before approaching MSG. Even a small technical failure at a big event in MSG would lead to negative publicity shutting down the doors of top venture capital firms.

2. It would have been very difficult for Vivek to start his venture without co-founders.  Vivek had an engineering background and developed the idea but he had limited experience of attending sporting events in US. In fact, his first meeting with the operations manager at Keebler’s stadium revealed how little he knew about the industry and how events were organized. Vivek needed someone with industry knowledge and contacts. David Keebler fit into this role well. Also, Vivek needed a technical expert to develop the prototype so that he can focus on fundraising and day-to-day operations of the company. Even with two people, Smartix missed the deadline for HBS competition. Hence, it would have been extremely difficult for Vivek to remain a solo founder.