Heather Evens Case Study Essay

1046 Words May 15th, 2013 5 Pages
4. Evaluate Heather’s financing alternatives - Arden & Co. ·A private investment company with excellent reputation ·Intend to do the whole deal ·Heather’s friend worked for this company, so it was easy to approach ·There was still no formal discussion on this deal when the holiday line was beginning - Other venture capital firms ·An opportunity to collect money as under an emergency ·It would take a lot of time to talk with unfamiliar company from a fresh start ·It might a hard bargain than private investors - Helen Neil ·A small venture capital firm which had been approached ·The owner was a proven designer, so she is familiar with garment industry ·This company had relationships with …show more content…
With the 4- year development of the company, Heather could retain 46.4% of company, and she might lose the dominant right. ·The prerequisite of some potential investors was at least 50% equity share - Licensing ·If Heather license “Heather Evans” rather than let the company own it, it would be less attractive for potential investors because if the company succeed in the future, the trademark would be the most valuable intangible assets of the company. - Valuation ·Heather used Liz Claiborne as a reference, and decided the IPO price at $19.00. Therefore, the P/E multiple was 9.60 for most recent four quarters. From this number, it was concluded that the market value of Liz was underestimated. - Exit Strategy ·Major stockholders could choose to sell the stocks back to Heather if she was still in control of more than 50% ownerships, or to sell their shares to public as IPO. If the company went successful, stockholders would support it to go to public as they could get higher returns, and the company could not receive any proceeds from the sale of shares by the selling stockholders. So, Heather had to pay very high return to the investors to persuade these investors.

5. Recommend appropriate solutions to reconcile Heather’s positions on these issues with potential investors. - Control · At this

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