Analysis and Recommendations It's quite coherent that Khuller …show more content…
It was to the extent that he was ignoring the Fleetcenter, which personally, I thought was the most viable solution. The Fleetcenter seemed to be very interested in their product and most likely would have made a deal with Khuller if they had done the proposed testing. MSG wanted 20% of Smartix, if they were going to work together, which was not a great proposition in the first place. In addition, I was thinking that if Smartix partnered with MSG, then they would lose their business with the Fleetcenter and all other professional sporting facilities. Why would the Fleetcenter want to purchase a system that MSG holds a 20% equity in? It doesn't make any sense. Additionally, once partnered up with MSG, it doesn't make any sense looking for venture capitalists because MSG has more than enough …show more content…
The very first thing he should of done was set up the parameters and then this situation would never occur. Not only did it cause a disruption to the business but it also left him in a bad position. Furthermore, the way in which he ended up splitting the equity made no sense at all. He decided to categorize using four criteria: past contributions, contributions going forward, opportunity cost, and commitment. First of all, how can you measure someone's contributions going forward, someone may say they're going to do something, but that doesn't necessarily happen. Later on, Khuller says the criteria with the most weight will be the forward-looking contributions criteria and the least will be the past contributions criteria. In my opinion, this is the exact opposite of what I feel is the appropriate weights. They should base their weights more on what has already happened, as it is factual and unchangeable. The worst part of it all is that Khuller only ended up with 35% of the company after coming up with the idea and being the founder, while the other 3 guys got 27%, 21% and 17%. I believe that Khuller should have gotten at least the majority of the company