Neverfail Computing A-B

Babson Professor Bill Bygrave, Case Director

Dan D'Heilly and Kevin Ebel, Case Writers

Arthur M. Blank Center for Entrepreneurship

© Babson College, 1995.

Abstract

This case is positioned as the first high-potential start-up in a New Ventures course. It is an opportunity for students to compare and contrast this with the earlier cases: Scott Tompkins, Jack Sprat's Restaurant, Streamline Business Systems, and Andrew Zenoff. When students finish this case, they ought to have a better understanding of what constitutes a high-potential company that attracts professional venture capital. But it's not a "perfect" high potential company, so it gives students an opportunity to spot its deficiencies. The cases that should immediately follow Neverfail Computing in a course are the Jon Hirschtick's New Venture-SolidWorks, two-part case series, which is an almost "perfect" high-potential start-up. As a financing case, Neverfail Computing works well as a linking case between the 4f's (founders, family, friends, and foolhardy) funding and formal venture capital. Neverfail Computing has a proven team, with a proven lead entrepreneur, in an exciting market niche, in a rapidly growing technology: hot-pluggable, fault-tolerant, hard drive arrays using a technology known as RAID and the SCSI (Small Computer System Interface). It is the kind of high-potential venture that attracts venture capitalists. The case is best used in courses with a focus on career building, entrepreneurial teams, product development, marketing, angel financing, creative financing, working capital financing, private venture capital, term sheet, valuation, ownership, preferred stock, and negotiating.

Location of the company: California

Year(s) spanned by the case: 1993 through 1994

Industry segment(s): Fault-tolerant, hot-pluggable, computer memory using RAID technology

Stage of the company: Pre-start-up and start-up

Age of the entrepreneur(s): 30s

DVD

There is a 40 minute DVD available for the A case. There is also a 37 minute DVD available for the B case. Please place orders through ecch.

Teaching Notes

A 15-page case teaching package, written by Bill Bygrave, is available for this case. The teaching package includes strategies for case presentation, key concepts, solutions to the assignment questions in the case, and suggestions for the most effective ways to work this case into a course.