Able Planet Case 2
SBE-560-19660: Entrepreneurship/Small Business Mgmt.
Professor Wendy Finlay
October 5, 2013
Keller Graduate School of Management
Jacob Denise

Abstract

Kevin Semcken, Able Planet’s CEO discovered Able Planet in Wheat Ridge, Colorado, that produces headphones with an imbedded magnetic coil to enhance sound quality at a technology conference in Denver Colorado. Kevin Semcken, who lost hearing in one ear, was intrigued and tested the product by listening to his favorite music. Kevin Semcken had a bigger vision for Able Planet. Kevin Semcken produced earphones that can fit into a person’s ear canal which would stay during strenuous activity and block-out ambient noise. He lined up thirty (30) potential customers who were interested in his innovated earphones, and convinced them to sign disclosure agreements. Kevin Semcken, Able Planet’s CEO and chairman is seeking capital to finance existing operations for its current products, build a prototype for a new product and market both products to new and current customers (Scarborough, 2012). Furthermore, the bank had changed the terms; Able Planet line of credit 2.5 million would no longer be financed by the bank for upfront cost of raw materials and manufacturing.

Questions and Responses
Q1. Experts say that entrepreneurs who need between $100,000 and 3 million often face the greatest obstacles when raising capital for their businesses. Why?
Most entrepreneurs, in less glamorous industries or those just starting out, face difficulty finding outside sources of financing. Kevin Semcken is just starting up his business, many banks shy away from making loans to start-ups, and venture capitalists have become more risk averse, shifting their investments away from start-up companies to more-established businesses. “Private investors have grown cautious, and making a public stock offering