Venture Capital. BioScale Incorporation

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Table of Contents

A summary of the BioScale Case
Attractions to invest in a Mark Lundstrom company
Detractions from investing in a Lundstrom company
The pros and cons of
A recommendation to the BioScale Board of Directors
Reference

A summary of the BioScale Case

The case is of an entrepreneurial student engineer, later described as a venture capitalist, who evolves to embrace venture capitalism in all respects- assessing need scenarios, formulating reactionary ideas into investment, taking risks and investing using the minimal capital. He uses the capital of investors to boost inventions while those from government are used to maintain operations and services.

Later on as the head of BioScales, Landstrom is expected to show because for the need of a venture capital and associated expertise that is needed of such equity funds to a panel of the company’s Board of Directors. This is in an intended venturing into an expanded market that is yet to be captured. The company is promising, has the capacity to attain its aspirations and is confidently steered by a man who has seen many companies up and running, albeit with challenges. The whole episode is of an innovative man who combines the power of technology and business to see companies on their feet.

Mark Landstrom appears as an astute go getter investor who will stop at nothing to make an investment. In the realms of venture capitalism, he qualifies on many accounts to put the bravest moves that yield returns. At his undergraduate at Massachusetts Institute of Technology, he creates the SkiAble for the handicapped skiers. This portrays him as a good team builder and a person able to pool human resources together for a beneficial purpose.

He was smart in technological entrepreneurship and was wiling to learn and practice more of the same. This is shown in his integration of learned mechanical engineering concepts to business acumen in the formation of LFM between the school of engineering and that of business in a technological market interface. This is further exalted in his venture into business through setting up of Active Control eXperts that designed piezometric components.

His business venture ability was evident in following logical approaches in stating and upholding the manufacturing company. However, as was seen thereafter, a weakness that characterized his venture was inability to assess market demands. This had effects in business that split his business, the ACX. He worked closely with his customers in developing their products according to their demands. The customers gave grants which according to him, were for inventory purposes. These, he used to create commercial productions.

Despite his grim knowledge about manufacture and business, he used cellular manufacturing approaches that set up lines of action in his ventures. At the age of 26 eras, he had been consulted to start the broadband company, Teledesic. This showed a person with enthusiasm of thinking big while taking chances for greater profitability. He was a good team builder and valued success rather than the fear of risk.

Mark Landstrom later becomes a consultant and a manager in a number of bi time companies. His enthusiasm for success enables him to scale many heights into introducing technological advancements through business evaluations and market oriented approaches. He however tumbles once in a while, reflects and continues to exploit the avenues of his failure. His stint as the head of the largely successful BioScale enables us to see a person with passion for invention to help business. The integration of these two aspects describes his calculated steps to remain relevant to the wishes of customers and technology.

Finally, he has to choose between determinants of continued survival of BioScale. This enables the learner to understand the very decisions that are sometimes faced by venture capitalists in development and sustenance of entrepreneurial ideas. The case of Mark Landstrom is uniquely so because of the magnitude and scale of choices that he had to take. However, these choices are taken on daily basis by a number of entrepreneurs and investors who have to study their options and choices before a decision for an investment is made.

Attractions to invest in a Mark Lundstrom company

Venture capital describes all forms of private equity or any such capital investment given to companies that are considered to be developing or simply referred to as immature companies or organizations. These companies are considered for these payments because of their perceived or record potential growth in services or production. The equity is given in an anticipation of growth in interest or producing returns except that they lack the capital to expand. The returns may be as a result of an initial public offer or sales in the normal trade of the company.

The funds are typically given to the companies through an organized exchange of capital to shares in the company. The confidence shown by institutions in the growth of the company is shown through investment of cash. The cash is usually generated by dedicated firms or individual with interest in investing their shares as part of the company. The companies must show an accompanying degree of management that the investors have confidence in. This confidence is usually translated to company productivity that is assesses through independent and convincing mechanisms. Public confidence should also describe the view of the management.

Mark Lundstrom appears to be an astute manager of sorts. He had a passion for starting things and ensuring that they grow big. This is a core value of company in developing resources and capital. A Mark Lundstrom company would therefore embrace investment to growth.

The intention of Mark Lundstrom was to make products and follow ups to necessary services that are essential for the continual functioning at the behest of the customer. This ensures stability of the company and retains customers. He had a passion for assembling the best human resource skills to produce the best. Under such circumstances, there would be surety in quality of produce meaning that one of the core elements of customer retention strategies are adhered to. This would boost investment.

The school of thought championed by Mark Lundstrom embraced looking for opportunities where challenges existed. This, coupled with proper planning, is a recipe or maximized returns. Mark Lundstrom perfected in this. This saw his successes span a number of organizations. The concept behind his successes was innovation that is vital in any successful investment. I would choose such a company to invest in that embraces innovation.

After the failure associate with the Teledesic factory, Mark Lundstrom decided to make a serious assessment before venturing into the business of manufacturing. While this is considered one of his weaknesses to have invested before doing a market research, the lesson here and how Mark Lundstrom learned it makes one have confidence to invest in his future companies. After the initial failure, Mark Lundstrom looked for market for his products before venturing into production.

He coined the concept of first finding the specific markets for his rollout before strategizing and developing capacity for expanded market segment. This strategy not only worked for his future ventures, it also enabled that the potential risk of venturing into a rollout was reduced. This is typical of a good company to invest in.

The balance between technology and business in ventures was well played by Mark Lundstrom. He intricately balanced the technological and innovative aspects of production to maintaining a due diligence in marketing. This intricate balance needed the input of customers, a fact that Mark Lundstrom developed from his early days of investment. Understanding the needs of market behavior as portrayed by consumers is a positive recipe for a good investment.

Mark Lundstrom had a passion for human resource development to augment service and product quality delivery. He considered meaningful the role of identifying skilled manpower, training them and supporting them in their services. A good company thrives in capacitated service delivery and innovation to remain vibrant. Skill enhancement as is seen with Mark Lundstrom was a positive move that attracts investment. He also saw challenges in commercializing science and technology. In this, his approach was to recruit the best quality scientists with business acumen. This usually works very well to enable production of the best under market circumstances. This was perfected by Mark Lundstrom. He had a built strategy to meet these challenges.

Mark Lundstrom took every slightest opportunity to speed company development process. He capitalized on licensing such as with Draper and Berkley companies to save money and decrease the technological risk of introducing E400 into the market. While all these were happening, he ensured that there was a parallel development process in the industry so that this would form a fallback position should the prior fail. This indicated foresight especially in association with the unpredictability between technology and business. A company that has alternate strategies such as those of Mark Lundstrom is welcome destination for investment.

At BioScale, Mark Lundstrom worked to produce products with values within the individual purchasing authority of the customers. This is strategy that ensures that all customers are adequately served and retained. Understanding customer needs and providing application support became the hallmark of Mark Lundstrom’s operations at BioScale. The clients are served before they are willing to assume the risks of the product purchase. This attracts customers and ensures greater returns even for the company one invests with.

Detractions from investing in a Lundstrom company

Most of the aspects that would detract one from investing in a Lundstrom company are due to his personal characters rather than in his ideologies. Most of his strategies are appealing for venturing into company operations or innovation and technology oriented businesses. Having discussed the merits of investing in his company, the distractions exist in his initial lack of comprehensive market analysis before venturing into his xxx business of production. The consequences were seen in the split in this company.

When market research is inadequate or is not comprehensively done, a business may face a slump due to strategies that do not conform to the market demand. Such a business or company may not be worth investing in. the uncertainty associated with such investments may suffer from slightest speculation due to misinformation about trends in the market. Similarly, underperformed research exposes the business to actions that may jeopardize operation and the outlay of capital.

The extent to which this lack of market research affected operations of Mark Lundstrom’s management made him to resign from Ripcord and the height of whipsawing. This portrayed Mark Lundstrom in bad light as an opportunity seeker. This is a bite into his character. Rather that strive to correct things from inside, he decided to have a leave. The real push by financial market demands was escaped by Mark Lundstrom. This is an escapist attitude that may not be a suitable description for a manager or investor in production.

Mark Lundstrom strategy of planning also affected the entry of the company into the targeted market. He planned for a relatively large market that proved rather difficult to enter. While championing specific market in the short run and the large market in the long run, he said that capturing the immediate and specific markets was the initial strategy. Entry into the larger market was to be followed by developing capacities to capture. This was a hypothetical strategy which as is seen in this case never played well.

The final distraction was seen in the management style that saw a drift of BioScale from financial markets. This effect could have been attributed to the long time taken by technology to conform to market fluctuations. He also blamed this on unplanned new success in business that saw him strategize to cushion the company from effects of inability to have it enter into the big markets initially planned for its operations.

The pros and cons of

OEM / Licensing

In his thinking, Mark argues that isolation for the financial markets occasioned by the length of technology to yield in the market and unplanned success in the business warranted a cushion to the business. Licensing lingers in his mind as one of the options. In this, he toys with the idea of incorporating through licensing other companies with grater links to the alternative smaller markets. The companies were to be given exclusivity to these markets a BioScale remains the manufacturer of product to be marketed.

According to the circumstances, the opinion looked viable. The licensees would put the much needed capital into use as strategies are put for the eventual expansion. The smaller funders would come in magnitudes to chip in capital, traditional markets and even new markets that would accelerate growth.

The funds would be put to inventions and in production of even more market specific markets created by the licensees. This would ensure that the capital for inventions and innovations increase and the quality and approach to the specifically created markets increase. The net result would be an increased sale and more market capture.

The joint approach also had the capacity of increasing dedication among the partners. BioScale would have a rejuvenated life while the licensees would be dedicated as a result of mutual competition from other licensees. There would be increased sales.

The approach would also maximize on company resources while specializing on technology which would mean that a larger target market would be achieved earlier than expected.

On the contrary, this approach would reduce BioScale’s involvement and possible conflict in interest with the licensees dictating unattainable terms not acceptable to the philosophy of production at BioScale. The companies may also have a different agenda since their approach to marketing may also vary.

Raise substantial money

Ark thought that raising substantial money was also another cushion. The viability of this choice would be in its ability to build science, technology and business development teams in focusing to different industries with increased specialty. It would also maximize on expenses and focus on tangible opportunities. This approached bases on the hypothesis that the higher capital available for increased quality of production, the higher the quality of products that would necessitate an economy of scale.

This idea may also be advantageous since the organization would expand meaning greater production that gets into the markets. It would also maximize on the cost of the capital investment. The notion was further supported by the fact that there were avenues for getting these moneys and the contributors would place interests akin to those by shareholders or stake holders. The success of the company would thus be watched from a number of players with interests and thus improve their sales and rating that furthers the market entry.

The argument against this opinion was that just as the fears of real capital investments, it would be misused and the anticipated cushion thus does not hold since the production may not increase.

Strategic partner

Strategic partnering meant that customer referencing accounts would be available. This would enable first customers to be considered. The challenge was that these customers for partnering may just e hesitant to come.

Nonetheless, heir coming is viewed in the light that they would bring value to the organization through diversity. Large or celebrated companies in this category would mean that the prestige of BioScale would actually increase. The name would also sell and thus ensure the products get into larger markets. The partners would also provide strategic funds for innovations and development of products that would enable the companies to stand stronger.

The demerits associated with this approach are that the companies or partners would bring changes into the partnership which might not be properly guided. This aspect or partnering is associated with early stage companies and would tarnish the reputation of BioScale.

Variations in philosophy may also play a greater role in transforming, usually to the negative, the held beliefs of success in BioScale. This has the potential or derailing and even worsening the sale further. The company would them become even more redundant and in anticipating reforms, may just find itself slumping more and more since the conflict would men that no particular partner actually has a greater control of the process.

Split BioScale

Splitting Bioscale implies that all the specific components of the whole company go separate ways but the core marketing components would refer to the parent company. This is championed where the company may not be able manage an initial public offer that would expose the joint company to have stake holding from the public.

The advantages of the split may be sees in the ability of the specific departments to comfortably address their various industries. These would mean that the departments address their needs and services and market segments with individual vigor. This is projected to cause increased product quality because of the increased specialization. The market segment would be captured even faster in these circumstances.

The departments could also be in better positions to pursue grants and loans such as SBIR grants thus empowering their production and efficiency. Once this split is affected, the departments would strive in an interdepartmental competition to outdo each other in market capture strategies. Production would increase because of specialized marketing that causes increased purchases.

The result of the spilt could also sell BioScale with increased vigor enabling the enhancement of the brand name through joint agreements. This strategy may cause pulled up resources campaign that would enable different approaches to the larger market segment.

The demerits of this approach would be in the potential loss of coherence associated with separation. Each department may want to run an isolated campaign that would only help to worsen the situation.

A recommendation to the BioScale Board of Directors

From the analysis of various options available to ensure continuity of the company and eventual entry into the large market, the best approach would be a split of the company. A split would mean that the institution could still address its original mission, only this time, with increased vigor due to specialized and localized action. The company through the constituent departments can also get loans in their simplicity as opposed to the general company.

The specialty associated with this split would also increase production since the backlog of stage or departmental bureaucracies, if any, will also have been eradicated. The departments would also have even the vigor of capturing new markets over a shorted period of time. This could effectively sell BioScale as an effective institution embracing unity in diversity.

These split groups would be conceived as immature but potential arising from the parent company. In providing venture capital for these groups and which will be of least influence to the functions of the company, the board of directors may consider that assisting the splits is the best option to curtail external interference. Advancing them loan while there is a potential for performance would then mean putting a strain on them.

The board would wish, through advancing any promotional capital to the departments, assume indirect control of the operations of the company as opposed to the other three options as may be given by Mark. The choice of this method of venturing into future operations for the promising company is through the split.

Reference

Bowen, H. K. & Bradley R. S. (2007) BioScale. rev, Harvard Business School.

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