Center for Entrepreneurial Studies,
Babson College © 1996

ISBN 0-324-00177-0

Case Teaching Package
A case teaching package, written by Bill Bygrave, is available for this case. It 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 your course.

Length
This case is 10 pages in length and its case teaching package is 4 pages.

Abstract

The SolidWorks case is a sequel to the Jon Hirschtick 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 Hirschstick case, which deals with the first round of financing.

• 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: Startup and growth
• Age of the entrepreneurs: 30s and 50s