...Walnut Venture Associates: Case Questions (HAND-IN) (1)Angel investors are affluent individuals who provide capital(money) for a business start-up. Angel investors usually receive convertible debt or ownership equity in return for their investment. Angel investors are different from venture capitalists since angels typically invest their own funds meanwhile venture capitalists manage pooled money of others in a professionally-managed fund. There are 2 forces exacerbating the trend towards the prominence of angel investing which include the fact that a generation of entreprenuers had “cashed out” and were looking to utilize their wealth and expertise by investing in start-ups, and that venture capitalists usually deployed capital in larger amounts that $1 million or below. An entrepreneur would seek financing from an Angel because Angels not only have the money to help finance the company, but they also have knowledge and experience that is very helpful to start-ups. The experience and track record of Angels (who usually have started their own company, served as a CEO, etc) is an asset that can’t be matched by a venture capitalist. Part of the reason of this again is because the Angel investor is investing his or her own money, something that will truly incentivize the Angel do to everything in his or her power to make the company succeed. 1) What is your first impression about the RBS opportunity based on the business plan? My first impression about the RBS opportunity...
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...Walnut Venture Associates are a group of angel investors. In 1997 the club had around a dozen individual investors, forming an “angel group”. Their primary targets are investments ranging from $250,000 to $1,000,000. This is due to the gap of capital funds initiated by the VC’s from not considering investments bellow $1 million. Also, angel investors can acquire significant equity at low cost, and help the growth of the company with their knowledge and expertise. By selecting only the most exceptional people and ideas, investments in startups can lead to massive returns on relatively small investments. As unexperienced entrepreneurs, they are a key resource to have in order to achieve quick growth, and secure the company’s early stages. RBS began product development in 1992, and first launched to the software industry in 1994. By the end of 1997, their annual revenue rate was close to $5 million. RBS now seeks a 2 million dollar investment, to be used for sales expansion, global marketing, and product development. So why would Walnut even consider investing if the company is past startup status? Since their primal motive is to maximize earnings, they may allow going over their common investment range if the opportunity seems truly worth it. RBS does seem to have the essentials to a great company with a strong management team, a proven product, and a solid execution of their plans. The market they are in, the software industry, is growing at 5 times the rate of the rest of...
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...Angel investors are wealthy individuals who usually have an entrepreneurial background of their own. These individuals look for an outlet to share, recycle and increase their wealth and expertise by investing in start-ups. The reasons why they invest in start-ups vary. One of these is to put their wealth and experience to use, the other is to fill the void created by VC’s in the investment space of $1million or less. For entrepreneurs Angel investment is an attractive way to raise equity capital. Angels will provide capital up to a couple of million dollars making it an attractive option for a second round financing run where friends and family would probably fall short and the company is not yet attractive for VC’s. For a Walnut investor there are a several issues that raise questions that must be answered. Some of these questions are about RBS’s market penetration and growth projections. Why will the customer choose to switch to RBS, and how easy is it? The answer to this question would reveal the markets resistance to RBS’s penetration. Is RBS adding real value to the customers that switch? Based on the answers to these questions is the 100% annual sales growth realistic? Is opening local field offices really a good strategy? Can new field offices duplicate the success of the California office which had access to a huge software company market? We can also question assumptions about the competition. What is the barrier of entry for the competition? Does...
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...geographically dispersed and have a riskier appetite although their funding volumes are much smaller Others reasons include more informal investment criteria and more flexible business arrangements as compared to VCs. Particularly around investing in deals less than $1MM (“capital chasm”) since VCs weren’t available to fund in this category and funded >$1MM. Angels are typically affluent individuals that have made it big as a direct result of prior experience in the industry so their vast knowledge and industry experience is of tremendous value to startups. Some angels are more socially minded rather than financially motivated which becomes another reason for entrepreneurs to seek financing from them. Walnut was impressed with the CEO Bob O’Connor and his business focus. Also, Walnut was happy with the fact that the company had a product, sales, and earnings. From an industry perspective, RBS was in a thriving software industry and the business model was easy to get and understand....
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...Stephen Choi MF602 March 12, 2013 Walnut Venture Associates (A): RBS Group Investment Memorandum The RBS Group’s business seems promising and I suggest investing $1 million in the business, exiting in three years, that is, at the end of fiscal year 2000-2001. Milestones While the business seems quite promising, there are certain milestones RBS will need to achieve in the following three years. First, within the next month RBS will have to hire a vice president who will focus on sales since its second phase will focus on increasing sales to secure market share. While the current executives of RBS have done a great job, they will need additional expertise since the sales role will switch over to newly hired sales personnel of their regional offices. Also, RBS will need to find another $1million for its next round. Since Walnut Venture Associates can only raise $1million, it is imperative that RBS find another source of funding to power through its second phase of business. Considering the prospect of RBS and its well-established relationship with big technology firms, this should not be too much of a problem. Next, RBS will have to enter the third phase of expanding its business in foreign countries should begin in the beginning of fiscal year 2000-2001. Two years after phase two, its revenue flow is projected to become more stable and cash flow turns to profit. Therefore, this seems to be the right time to enter phase three and boost up its value one last time...
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...Harvard Business School 9-899-097 Rev. November 19, 1998 Walnut Venture Associates (D): RBS Deal Terms It was Friday, June 5, 1998, and Bob O’Connor was headed home for the weekend. He knew it would be a busy one, for he had many decisions to make. He had been trying to raise capital for his Company – the RBS Group, a software firm – for almost a year. He felt like he was finally nearing the end of this process, but now more issues had arisen. First, his prospective investors wanted to increase the amount of their investment. While he would be happy to have the extra money, he felt that the valuation on RBS was already lower than he had hoped, and he was reluctant to take more money at this price. Second, he had received a draft term sheet the day before. He’d only had a few minutes to scan it, but it seemed a long way from the simple deal they’d discussed weeks before. O’Connor knew he would be spending a lot of time with this document over the coming weekend. Background Wagner and other “angels” from the Walnut group had successfully gotten over several of the issues that had arisen during their due diligence process. (See Walnut Ventures Associates (A), (B) and (C) Nos.899-062, 063 and 064) Wagner described those issues and the due diligence process: The customer feedback was all quite good. O’Connor was a great salesman. The issue was: Is he a one man band? And we decided – yes, he was a one man band, but more by necessity than by choice. After watching him in...
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...Diamond Foods Accounting Scandal BACKGROUND: Founded in 1912 as a walnut grower cooperative, Diamond Food’s primary business involved buying walnuts from local California growers, processing the product, and reselling it. The San Francisco-based company converted from a cooperative to a public corporation in July of 2005, issuing its initial shares for $17. By 2010, Diamond Foods (DMND) had expanded and acquired a number of snack food companies including Kettle Brand® Chips and Pop Secret® popcorn and was negotiating the acquisition of the Pringles brand from the Procter & Gamble Company (Diamond Foods, 2014). The addition of the Pringles brand would make Diamond the second-largest global snack foods company behind PepsiCo, Inc., owner of the Frito-Lay brand (Byron & Ziobro, 2011). Although the new ventures took precedence, Diamond’s walnut business remained the highest commodity cost to the company. In order to maintain relations with the growers, Diamond had to assure they offered a competitive price for the product; however any recorded increase in walnut price would decrease both the company’s reported earnings and their reported earnings per share (EPS). Despite rising walnut prices, the company consistently posted EPS that defied analyst projections. Between the 2010 SEC Form 10-Q second quarter filing and the SEC Form 10-K of FY 2011, the price of Diamond stock jumped from $39 dollars per share to $90 per share (SEC, 2014). On January 9, 2014, the Securities and...
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...Blue Diamond Walnuts Kahlfanie Carabon Keller School of Management April 19, 2015 Executive Summary Today’s walnut market is growing increasingly. It is projected to increase by over 25 percent in the next 3 years, (USDA, 2014). There is a grand opportunity provided by the rise in walnut demand that come s in the form of a brand extension for Blue Diamond to extend its reach into the walnut market. This extension would be two fold. The first would be opening up production to support our walnut products. The second would be securing that production in China’s rich walnut market. There is a high demand for walnuts in China, represented by their high import of the nut. The opportunity is prime for brand extension. The market has evolved in such a way that it will be strong enough to secure this move. The strengths come from several factors which are, demographics, history and awareness. The demographics factors are strong and numerous. The infrastructure is there, the people or future workers are there and the consumers are already supporting the product, just without the Blue Diamond stamp on it. History tells us of China’s linage with nuts in general that has proclaimed them as the number one exporter of nuts. An article by William Neuman in the NY times reads, “Last year, China was the top foreign buyer of American walnuts, and in 2007, it became the leading export market for pecans. Altogether, China bought $737 million in tree nuts from the United States last year...
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...nuts: Almonds $7500/6000 = $1.25 Brazil $7125/7500 = $.95 Filberts $6750/7500 = $.90 Pecans $7200/6000 = $1.20 Walnuts $7875/7500 = $1.05 Cost of nuts per mix: Regular mix: .15($1.25) + .25($.95) + .25($.90) + .10($1.20) + .25($1.05) = $1.0325 Deluxe mix: .20($1.25) + .20($.95) + .25($.90) + .20($1.20) + .20($1.05) = $1.07 Holiday mix: .25($1.25) + .15($.95) + .15($.90) + .25($1.20) + .20($1.05) = $1.10 2.) Let R = number of regular mix produced D = number of deluxe mix produced H = number of holiday mix produced The following linear programming model can be solved to maximize profit contribution for the nuts already purchased. Max = 1.65R + 2D + 2.25H .15R + .20D + .25H < = 6000 Almonds .25R + .20D + .15H < = 7500 Brazil .25R + .20D + .15H < = 7500 Filbert .10R + .20D + .25H < = 6000 Pecans .25R + .20D + .20H < = 7500 Walnuts R > = 10,000 Regular D > = 3000 Deluxe H > = 5000 Holiday The optimal solution-using Lingo is $61,375. This would be your maximum profit using the objective function above. The profit from the Regular mix would be $17,500; the profit from the Deluxe mix would be $10,625; and the profit from the Holiday mix would be $5,000. 3.) Looking at the dual prices one can see that additional almonds are worth $8.50 per pound for TJ and additional walnuts are worth $1.50 per pound. Looking at the slack variables one can see that additional Brazil nuts, Filberts nuts, and...
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...INTERNATIONAL ECONOMICS The 3 commodities chosen are 1) Tobacco leaf 2) Walnuts 3) Buffalo meat 1) Tobacco leaf: Tobacco, one of the most widely-used addictive substances in the world, is a plant native to the Americas and historically one of the half-dozen most important crops grown by American farmers. From 1617 to 1793 tobacco was the most valuable staple export from the English American mainland colonies and the United States. Until the 1960s, the United States not only grew but also manufactured and exported more tobacco than any other country. The largest tobacco company in the world by volume is China National Tobacco Co... World tobacco leaf exports from 2010-2011 averaged 1.98 million tonnes per year which the FAO expects to grow by 1% to 2.2 million by 2012. Today developing nations are responsible for almost 65% of global tobacco exports, while developed countries account for the remainder. Of the countries below, the domestic economies of Zimbabwe and Malawi depend most heavily on tobacco exports to the rest of the world. Production by country: Country or region Production in thousands of tons China 2,298.8 India 595.4 Brazil 520.7 United States 408.2 European Union 314.5 Zimbabwe ...
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...Walnut is the common people food. It is nutritious, has a brain, kidney, beauty, lipid-lowering effect of four. Walnuts and walnut or China's traditional export commodities. However, due to the hard walnut shells, hand stripping nuclear extremely inconvenient and time-consuming. Therefore, raising the level of mechanization take walnut kernel, the production process is an urgent problem. Walnut Huller is mainly used for rigid walnut sheller, a complete different rates, and the yield of different varieties of walnut nuts, one is the structure by regulating the motor speed, the rotational speed of the wind speed and the size of the internal fit. The other is by adjusting the internal clearance, to achieve the best effect shelling. Walnut huller main features Walnut huller from the rack, the fan rotor, single-phase motor, screen (the size of two kinds), into the hopper, vibrating screen, belt wheel and drive belt and other components. After the normal operation of equipment, walnut quantitative evenly and continuously into the hopper, walnut repeatedly hit in the rotor, Friction, collision broken down, and crushed walnut shells in the rotation of the rotor and the wind pressure blow, through certain pore size screen (the first threshing with a large hole mesh, small fruit skin after cleaning the mesh apertures replaced second peel) filtration, separation. Walnut hull, tablets in rotating fan blowing force, to make lightweight body shell is blown, the heavier the fruit through...
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...The allelopathic effects of juglone containing nuts Catherine Qin, Manavi Nagai, Whitney Hagins, and Reginald Hobbs* Department of Science AP Biology Lexington High School, 251 Waltham Street, Lexington, MA 02421 *Correspondence: rhobbs@sch.ci.lexington.ma.us Abstract Allelopathy is the inhibition of the growth of a plant by the allelochemicals, produced by a nearby plant, into their shared environment. It is a form of chemical warfare used by plants to defend their territory and resources, thus reducing interspecific competition1. Although some allelopathic plants produce agents that may benefit rather than harm surrounding species, the majority release chemicals that are toxic to others. To explore this biological phenomenon, the effects of allelopathic nuts of the family Juglandaceae, containing the novel allelopathic agent juglone, were tested on the germination of plants sensitive to allelopathy and those shown to be resistant. Based on previous studies examining allelopathy, it is expected that sensitive plants treated with this agent would cause negative affects on germination, while the seeds that are known to be resistant, would undergo relatively normal germination. The results of these experiments are generally consistent with this model of allelopathic toxicity and resistance. Allelopathy is a unique phenomenon in nature that is relatively new to the scientific community, and the results of this experiment are not only relevant to basic botanical research, but also...
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...STDY 80: Studying & Learning Final Projects: Research Paper SAMPLE RESEARCH PAPER (A) “An Overview of the Hospitality and Restaurant Management Profession” December 12, 2006 By: John Doe STDY 80: Studying & Learning Prof: Kathleen E. High, M.Ed. Mt San Antonio College Hospitality & Restaurant Management Doe: i Thesis Statement: A person who wants to become a professional in the Hospitality and Restaurant Management field should consider gaining both experience and an educational degree in order to enjoy a successful career. Purpose: To help the author understand what it will take to become a professional in the HRM field. Audience: Professor Outline: I. Introduction: The HRM profession is multi-faceted a. An Educational Degree is advantageous; Experience is also key b. Responsible for operations of a functioning food establishment c. The field is diverse and covers all demographics and populations II. Body: The HRM profession is multi-faceted because of the nature of the hospitality and restaurant industry. a. Education - A degree from an accredited university or training from a certified program can be advantageous. i. AS in Hospitality & Restaurant Management ii. BS in Culinary Arts Management iii. Business & Marketing iv. Recreation Management b. Experience – with dedication and hard work, a person may be able to work his or her way from bottom up. i. Getting a foot in the door ii. Learning from observation and practice iii. It takes time ...
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...Unit Seven – The Lennar Company Case Study Analysis Kaplan University School of Business MT460 Management Policy and Strategy Author: Edna McEwen Professor: Dr. Strouble Date: June 29, 2015 LENNAR CORPORATION’S JOINT VENTURE INVESTMENTS Company Name: The Lennar Company Topic of the Week: Create a case study analysis focusing on the company’s abuse and fraudulent activities relative to CSR and business ethics. Synopsis of the Situation The Lennar Company faces the damage caused by the Fraud Discovery Institute’s claims, the financial crisis, mortgage defaults, and dramatic fall in house prices, particularly in some of their active markets. The country is in the midst of an economic recession that began in 2007, and on top of that, the company has been accused of operating a ponzi scheme and profiting while allowing investors to lose money. On the day of the announcement by the Fraud Discovery Institute, the company’s stock price took a dramatic fall. The problem is, the person that founded the Fraud Discovery Institute is a ‘reformed’ crook who has made it his mission to expose fraudulent behavior of others as a way of redeeming himself from some of the negative things he has done. The question is, is he really reformed, or is this just another scheme he has plotted to gain access to company’s information so he can pounce when the company is most vulnerable. Alternative Solutions Since Lennar’s mission statement states...
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...LEADERSHIP Six Ways to Sink a Growth Initiative by Donald L. Laurie and J. Bruce Harreld FROM THE JULY–AUGUST 2013 ISSUE T he CEO is confronted with a dilemma: The revenue and profits of his company’s existing businesses are rising slowly, and the businesses have already slashed their costs as much as they dare. Because their markets are mature, he knows that the company must grow if the share price is to increase, but acquisitions are expensive and risky. So he launches a slew of initiatives in areas with high growth potential and appoints some promising young managers to lead them. To ensure that the new ventures aren’t stifled, he has their managers report to a special growth committee headed by a trusted staff executive and locates them a safe distance from the established businesses. Sound familiar? It should, because that story has played out at hundreds if not thousands of large and midsize companies over the past 20 to 30 years. But after working for, advising, and studying scores of companies, we have learned that this conventional wisdom about how best to pursue growth is a recipe for failure—which explains why most new businesses launched by established companies die, and why only a tiny fraction of companies around today, including major corporations, will be here in 25 years. All too often CEOs and their senior teams see managing today’s earnings as their main job and don’t spend enough time on the pursuit of growth and building the...
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