Essay on "Venture Capital Case on ZIP Car"
Essay 3 pages (1015 words) Sources: 0
[EXCERPT] . . . .
ZipCarRobin Chase has just completed a round of financing for $1.3 million, but her expansion plans for ZipCar mean that she is going to need more financing in the near future, possibly as soon as six months. She is facing a couple of key issues. The first is that she must make a decision between strategic alternatives including expansion in the Boston market and expansion to other U.S. cities. The latter expansion in particular needs to be timed in line with financing rounds, Chase must lay out a sound expansion strategy for the company. The other key issue for Chase is that she needs to ensure that ZipCar is able to acquire the financing it needs, at a fair valuation. The venture capital community in Boston is favorable to the ZipCar idea, but less enthusiastic about having Chase and her husband lead the company through the expansion. Additionally, venture capitalists are also going to be respond favorably if the company can deliver the market share and profits in the Boston market that it has projected to the community during this latest financing round.
It is recommended that ZipCar focus its energy for the next six months on building out the Boston market. This strategy will resolve two key issues that need to be addressed prior to securing more financing. The first is that success in Boston would demonstrate that the current management team is capable of building the company, without bringing in outside management help. The second issue that would be addressed with success in Boston is gaining network effects that will help raise the company's profile in the venture capital community. For ZipCar to successfully expand into other East Coast cities, the company will need
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The company will also need to hire professional management to handle this rapid expansion. The previous experience failed because the person they hired was the wrong person, culturally, and did not truly understand the business. It is recommended that ZipCar find the right person to guide this company through this period, however, somebody who is urban and who has guided startups before. Such a hiring will raise the credibility of the company with investors, facilitating the successive financing rounds.
ZipCar has just received $1.3 million in financing from venture capital partners, and is expected to use this money to grow the company. At this point, the CEO believes that $300,000 will be used to pay down debt and the remainder will be used for market development.
At present, the company is focused on the Boston market, and is in the very early stages of rollout. Saturating the Boston market is one of the strategic options for ZipCar, and another is to expand quickly into other major cities. The company's business model is to provide a car-sharing service based on similar ones in Europe. The target market is college-education urbanites, in particular those who do not have a significant need for automobiles, but may have occasional needs. There… READ MORE
Quoted Instructions for "Venture Capital Case on ZIP Car" Assignment:
“Case Study: ZIpcar
Provide an opening SUMMARY of your RECOMMENDATIONS
*****¢ Identify the key issues in the case
*****¢ Develop clear next steps, with all back-up
*****¢ Address countervailing arguments
*****¢ DON*****T FORGET- this is a FINANCE class ***** support with NUMBERS *****
How to Reference "Venture Capital Case on ZIP Car" Essay in a Bibliography
“Venture Capital Case on ZIP Car.” A1-TermPaper.com, 2012, https://www.a1-termpaper.com/topics/essay/zipcar-robin-chase/61908. Accessed 5 Oct 2024.
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