Yieldex (A) Case Study Analysis

Question: 1(b)

It could be seen that there is high probability that it could be sold for $5 million and an only 25% probability that it could be sold for $300 million then it is recommended that Cosman should sold his business because it yields high returns with no risk. But, if we consider other aspects, it could be seen that there is high risk with having 75% chance that it could sold for $5 million in future. Thus, it is recommended that Cosman should sold its business to Turn Inc.

Question: 2

Factors that Cosman should consider in taking the decision on the proposal of acquisition includes the financial value of the firm as well as the ability of growth of its software in future. As the software is a unique solution for the advertising companies so, it has potent a customers. therefore, it has the potential to grow and prosper as well as it will provide strong financial results for the owner if it will be financed, marketed and managed in a best way.

Cosman should consider other important factors such as his investors. Cosman conducted meetings with several potential investors and put his time as well as efforts to raise the collected fund. The investors may will get disappointed and thus, Cosman will not be able to raise further funds for a new business. Shields has the combination of technical knowledge and the required skills that makes him eligible for being a co-founder of the company. It should be notice that to acquire such an expert team again will be difficult along wit this there is threat of losing further ownership in the company.

As Cosman has worked hard in the development of its software, now it is the time to turn his efforts into business and get the advantage of technology savvy era. Because, technology innovations are in demand and has the potential growth prospects.

Question: 3

Tom Shields is a strong candidate for becoming the CEO of the Yieldex as he has a strong background and the skills required for being a CEO that would lead the newly formed company to the next level of the success. His successful experience in Internet advertising industry as well as in fund raising for startups makes him a perfect fit for the newly formed advertising solution company.

For nay successful business an innovative strong performing product is necessary but getting customers and funding for the business of this product is crucial for the business which requires powerful communication skills for marketing the product and developing the partnerships for fund raising as well as managing the business like Apple Inc. which have been successful due to Steve jobs marketing, fund raising and management skills.  Like that Shields has the combination of technical knowledge and the required skills that makes him eligible for being a co-founder of the company.

In addition to this, Shields has to leave his job in venture capital firm which gives him a desirable compensation that he has to sacrifice for joining Yieldex because the firm is new and small and could produce such a high salary for him. Therefore, in order to convince him this 50/50 partnership is necessary for Cosman........................................

 

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