Staying Afloat
With his company, ImageCafé, struggling amidst financial uncertainty, Clarence
Wooten, Jr. faced some difficult decisions. With a current burn rate1 of nearly $50,000
per month, the bridge loans2 and Angel investments3 of $710,000 would not be not
enough capital to carry the company to break even. While struggling to close a $3
million financing round, a Virginia based Internet services company, Network Solutions
Inc., approached Wooten about selling ImageCafé. Time seemed to be running out and
closing the $3 million on acceptable terms was proving to be more difficult than Wooten
had ever anticipated.
Should he sell ImageCafé to Network Solutions, or risk losing it all for the potential of a
greater gain, if/when the financing materialized? And if he did decide to sell, what was
the right price?
Time was clearly not on his side.
BUSINESS IMPROVEMENT STRATEGIES (BBMM601) Practical Exercise DUE WEEK 4.1 Learning Outcome Assessed: a e Weighting: 30% Written Report Case Study Analysis (2000 words) INDIVIDUAL ASSIGNMENT ImageCafé Arthur M. Blank Center for Entrepreneurship Babson Park, MA Phone: 781 239 4420 02457 0310 Fax: 781 239 4178 Printed 8/16/04 URL: http://www.babson.edu/entrep This case is written by Kathryn F. Spinelli under the direction of Professor Stephen Spinelli, Jr. © Copyright Babson College, 2004. Funding provided by the HBCU Consortium. All rights reserved. …………………………………………………………………………………………………………………………………………………………………………… Staying Afloat With his company, ImageCafé, struggling amidst financial uncertainty, Clarence Wooten, Jr. faced some difficult decisions. With a current burn rate1 of nearly $50,000 per month, the bridge loans2 and Angel investments3 of $710,000 would not be not enough capital to carry the company to break even. While struggling to close a $3 million financing round, a Virginia based Internet services company, Network Solutions Inc., approached Wooten about selling ImageCafé. Time seemed to be running out and closing the $3 million on acceptable terms was proving to be more difficult than Wooten had ever anticipated. Should he sell ImageCafé to Network Solutions, or risk losing it all for the potential of a greater gain, if/when the financing materialized? And if he did decide to sell, what was the right price? Time was clearly not on his side. Clarence Wooten Jr. Clarence Wooten Jr. had a typical childhood dream: to get rich. His early childhood, however, was less typical. At an early age, Wooten was fascinated by television based video games; for Christmas one year, he convinced his parents to buy him an Atari game system. Wooten soon discovered that the game cartridges were too expensive for him to…
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