SolidWorks

Babson Professor Bill Bygrave, Case Director

Dan D'Heilly, Case Writer

Arthur M. Blank Center for Entrepreneurship

© Babson College, 1996.

Abstract

The SolidWorks case is a sequel to the Jon Hirschtick's New Venture case. It describes the second round of financing. The principal issues in the case are valuing a software business that has not yet shipped product, raising money from "strategic" partners and venture capitalists, and deciding how much money to raise. SolidWorks raised $3.8 million of first round venture capital in September 1994. It has made excellent progress with that money. It has developed a product that is getting rave reviews. It has established channels of distribution, and it began shipping product in November 1995. It estimates that it needs $4.5 million in the second round of financing. That will be sufficient to take it to profitability. The decision that Jon Hirschtick and his team have to make is whether to take $4.5 million or perhaps as much as $10 million in this round of financing. The SolidWorks case should immediately follow the Jon Hirschtick's New Venture case, which deals with the first round of financing. It is best used in courses focusing on private venture capital funds, Japanese corporate venture capital funds, strategic alliance with large Japanese companies, negotiations, valuations, and ownership.

Location of the company: Massachusetts

Years spanned by the case: 1994 through 1996

Industry segment: Personal computer software for 3-dimensional CAD

Stage of the company: Start-up and growth

Age of the entrepreneur(s): 30s and 50s

DVD

A 32-minute DVD is available for this case. Please place orders through ecch.

Teaching Notes

A three 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.