Entrepreneurial Case Analysis Essay

850 Words Dec 25th, 2012 4 Pages
PART III: ENTREPRENEURIAL CASE ANALYSIS

COMMUNITY WEB.COM: AN INTERNET FIRM’S EFFORT TO SURVIVE

QUESTIONS AND POSSIBLE ANSWERS

1. Should Community Web utilize Wall Street Venture Capital as its primary funding source? If not, why and what should the firm’s next step be? Community Web should seriously consider Wall Street Venture Capital’s offer. At this point, the company is redlining and any funding source approaching them should be heard. Unfortunately, the lack of transparency about Wall Street Venture Capital is a red flag that the company might not be trustworthy. Community Web is already in a bad situation and getting involved with an unreliable company may just make their situation worse. At
…show more content…
175 employees were hired to prepare for that anticipated growth, which never came. The company also did not handle legal matters in a professional manner, thus leading to problems with government agencies.
4. Are there any ethical and/or legal concerns in this case? Issuing equity without meeting government guidelines is problematic. This not only leads to legal concerns, but also may raise a red flag to other stakeholders as to the ethics of the company. Also, the company did not pay its payroll taxes. The company is clearly not meeting its legal obligations. Now it is getting involved with an investment source that is not reliable. All of these issues will take away from allowing the business to focus on growing its revenues.
5. What were some of the major reasons that Community Web was having problems taking its business model to market? Community Web was caught up in the dot com frenzy of its time. Many companies made similar mistakes. They did not test their concept in the market well enough before building the business. Ultimately, regardless of the technology and market, a business must adhere to business fundamentals to survive. The company was overly optimistic about the interest customers would have in their services, so their business model was incorrect. Additionally, they never really had a reliable business plan

Related Documents