Case Question.docxPart 1:
In a one- to two-page paper, think about the skills you need to launch a new venture, which skills do you
require in the first person you hire? In thinking about the company culture you are about to create,
what kind of values are you seeking in that person and all those that follow?
Part 2:
With the quiet click of the meeting room door, Ajay Bam was left with one fewer person on his team. It
was the spring of 2002, and Walter Stock—Ajay’s friend and partner—had finally succumbed to the
pressures of time and money. Troy Chen, the other founding partner, had exited two months earlier.
Ajay dialed new-venture attorney John Hession to vent his frustrations. Maybe at 27 he was just too
young and inexperienced, right? Of course, he had understood that it was not going to be easy to start
up a wireless payment and loyalty solution in the United States, but did it have to be this draining, this
fraught with rejection and naysayers? Sure, he had assembled a top-flight board of seasoned advisors,
but what good was that if he was unable to keep his team together or get any traction with investors?
Broke and exhausted, Ajay confessed that, even though he had worked for two years to earn an MBA
degree in Entrepreneurship, he was giving a lot of thought to a six-figure job that was still waiting for
him with Lehman Brothers in New York.
As Ajay clicked off his cell phone, he was suddenly struck by the fact that the attorney had said almost
nothing. He swallowed hard as he realized why; he had been talking like a quitter—maybe not worth the
free advice and networking support that the skilled lawyer had been providing for months. And what
about all the other professionals who had given Ajay so much of their time and encouragement over the
past two years—including a major venture-capital investor that he now considered his mentor? Was he
willing to make a similar call to them as well? This is just too hard, too lean.
Ajay rubbed his tired eyes and looked out at the cold April rain. What had he missed? What else could
he try? Should he keep at it, or cut his losses now and attempt something else at a later time after he
had rebuilt his personal savings a bit?
In addition to his precarious financial situation and his state of exhaustion, Ajay was certain of at least
one other thing: if he didn’t start up a mobile payments and loyalty enterprise soon, someone else
would.
Ajay Bam
Ajay Bam grew up in Pune, India, just north of Bombay. His father, a textile manufacturer, and his
mother, a greenhouse business proprietor, had raised their children to be independent, critical thinkers.
Looking back, Ajay said that, although he wasn’t always in agreement with their choices, he could see
they had been pushing him in the right direction:
I am so grateful to my parents. I remember when I went to prep school, I hated it… I didn’t realize at the
time what my parents were doing, but they did the best thing. I have seen a lot of amazing things, and I
am cosmopolitan because I am very world traveled. It puts a lot of things in perspective…. You know who
you are, where you have come from, and what you have.
By his early twenties, Ajay had earned an undergraduate degree in computer engineering and a master’s
degree in software engineering. He then landed a job as a technology analyst for Lehman Brothers in the
World Trade Center complex in New York City. He was young, single, successful, and growing restless:
This case was prepared by Carl Hedberg under the direction of Professor William Bygrave. © Copyright
Babson College, 2002. Funding provided by the Ewing Marion Kauffman Foundation. All rights reserved.
The pay was great. Everything was fantastic, but it gets to a point where the money doesn’t matter
anymore. You know you are good and you know you are going to make a good living…. In the back of my
mind I always knew I wanted to go for my MBA… so after getting two years of full-time experience I
decided to apply to a number of schools…. Babson, being number one in Entrepreneurship, was my first
choice.
Babson College
Ajay left Wall Street and in the fall of 1999 began a two-year program at Babson College. He
immediately applied for and was accepted into a new offering at the school: the Entrepreneurship
Intensity Track (EIT) program. EIT was “a compressed and highly focused entrepreneurial curriculum
designed to provide students with the necessary skills to take a business idea through the critical stages
of exploration, investigation, and refinement.” Ajay was thrilled with the opportunity to meet the many
successful entrepreneurs who were participating in the program as well as to work with a diverse,
talented group of instructors and students. He recalled that the learning experience was quite different
from his more bookish engineering studies:
To me getting an MBA was 50% networking, 20% classes, and 30% doing what I wanted to do. It was not
about what your professors did for you; it was about your level of participation.
Following his second semester, Ajay signed up for a four-month international management internship.
Eager to travel again and test his proficiency with at least one of several languages he had learned
academically, Ajay chose a startup in Munich, Germany. Ajay enjoyed working for the COO, who agreed
to let him sit in on board meetings:
The great challenge for me was that the meetings were in technical German. It was hard to understand
every word. So I would come out of these meetings and ask, “What just happened? I got bits and pieces
but could you put the story together for me?” I think they liked it because they thought it was very
challenging of me to be sitting in and trying to understand what was going on.
The COO encouraged his soft-spoken, hard-working intern to take three-day travel weekends. Ajay grew
particularly fond of Western Europe, and it was there that he began to see cell phones in a new light:
As I traveled around, I noticed that people had very fancy phones—sometimes several; like one for a
party, one for the office, one for home… I still had my phone from the States and it was just a clunky old
black box… I just hated it… I decided that mobile applications were going to be the next big thing in the
United States. When I came back from Germany, I decided that this was the space I wanted to work in.
Vayusa
In the fall of 2000, Ajay and fellow MBA Walter Stock were meeting at Starbucks to brainstorm
consumer applications for mobile technology. When the discussion gravitated toward the hassle of
coffee cards, the pair spied their opportunity. Ajay explained:

I carry a lot of loyalty cards. I have four coffee cards in my wallet. To be honest, it is a pain
carrying all these cards; I don’t have them when I need them, I lose my rewards, it’s a pain to
sign up, and it’s a pain if you lose them. And for merchants, the struggle is getting their card into
your wallet. Walter and I started thinking about building a mobile coffee card that would allow
you to track your coffees on your cell phone and let you know that you have, say, 11 coffees on
your card. Then you wouldn’t need to carry all these loyalty cards.
Over the next few weeks, Ajay’s EIT sessions helped to shape the business model, and they began to
gain an understanding of the challenges that merchants were facing. The new venture would develop a
technology platform that would enable customers to carry out payments and participate in loyalty
programs using any type of cell phone. The partners viewed the loyalty component as key, since vendors
large and small were discovering that loyalty-marketing programs developed from actual customer
behavior—a discipline known as customer relationship management, or CRM—could produce stunning
returns on investment. Ajay explained how the transaction would work:

As a first-time [user] you have to sign up your mobile phone and credit card into the Vayusa
portal. Once you do the sign-up process, you walk into a participating store—say, Blockbuster—
and they ask you how you would like to pay: Visa card, Visa phone, or cash. Our vision is to be
the Visa phone. There is a pre-programmed [toll free] number on your phone that will ask you for
the… unique tonal [point of sale ID displayed by that merchant]. Say it’s 100. Press 100.
Simultaneously, the Blockbuster guy enters $4.99, and on his tonal he says, “Visa mobile.”When
you authorize the payment, [the system] automatically reads your [online] coupons and lets you
know whatever the best one is. Then you enter your pin number to complete the
transaction. Afterward you get a text receipt on your cell phone and an e-mail receipt sent to
your e-mail address. Then we automatically update your loyalty rewards with Blockbuster.
Again, you don’t need to carry [a vendor] card in your wallet. You don’t even need to carry credit
cards.
The company name, Vayusa—Sanskrit for “rhythm in the air”—was chosen to evoke the effortless
mobile transactions they were hoping to foster (see Exhibit 6.1).
Ajay and Walter had no illusions about the odds against two young MBAs (with no industry experience)
developing a complex technology enterprise that would likely require a significant infusion of venture
capital, in addition to corporate alliances and partnerships. Ajay set out immediately to understand the
payments industry and, at the same time, build a top-tier board of advisors.
EXHIBIT 6.1: Point-of-Sale System
A Legal Education
Although he had no money to pay for such services, Ajay was determined to secure the best newventure legal advice in the Boston area. After hearing attorney John Hession, an attorney with Testa
Hurwitz, one of leading U.S. law firms specializing in technology new ventures and venture capital, speak
at an MIT venture forum, Ajay decided that he fit the bill. Ajay recalled that, predictably, the busy
attorney was not an easy sell:

I pursued him. I sent him e-mails, I called him up. I told him that I have to work with you; you
have to hear my story. So John and I met one day for breakfast and we just clicked. He said okay;
let’s see where we can go. One reason why John and I clicked was that he wasn’t about making
money with startups. He knew that startups don’t have money. He said, this is how I work: You
educate yourself on a lot of legal stuff so I don’t have to spend a lot of time telling you what it
means, and you will save some money there. You [Ajay] will prepare all the drafts. He sent me
stock agreements, things like that. He said you are going to cut and paste to put documents
together and then you are going to come back to me for a final review. He said that he would
rather spend his time on people who are paying him, and it made sense. It is a great philosophy.
So I saved myself thousands of dollars, and I got an education.
When John saw that the young man had an insatiable thirst for learning and for meeting people who
might be of assistance, he opened his Rolodex. In addition to referring Ajay to a number of business
leaders, John provided him with free passes to the many entrepreneurship and technology events that
were being sponsored by his firm. Ajay attended every one of them.
SeaPoint Ventures
Babson Professor Jeffry Timmons put Ajay in touch with his close friend Tom Huseby, the managing
partner at SeaPoint Ventures—a Seattle-based venture capital firm specializing in telecommunications.
Ajay said that after a couple of phone conversations, the venture capitalist invited him over for dinner
and a sail:

I spent my Thanksgiving with Tom’s family in Seattle. I flew to Seattle and had one of the most
wonderful times with Tom. He was a great guy. He’s a Stanford MBA. He has started four
different telecom companies, was very successful, made money, and decided to start a venture
fund. It was my first visit to a VC office and it kind of blew me away. It was grand, something
totally unexpected. Tom took me out for four hours on his million-dollar sailboat, and in that four
hours he explained to me the entire process of how a startup works, how to reduce risk, and
what it was going to take for him to invest in my company. So that was fascinating, and it
motivated me. Wow, this is how I want to be. I want to have money, I want to do a lot of
philanthropy, and I want to be in a position where I can control and do more. I came back and
decided that Tom was going to be my mentor for life.
Cracking the Chicken and Egg Cycle
By late 2000, Ajay and Walter found themselves running in circles. Potential merchant-clients were
interested in their idea but would not commit to anything until Vayusa could demonstrate the
application. Developing a prototype would require funds they didn’t have, and funding sources
explained that, before they would be willing to invest, Vayusa would have to sign up some merchants.
The pair decided to concentrate on the technology piece of the puzzle, since that was the element over
which they had the most control. In January, Ajay began looking into product development grant
programs and came across the National Collegiate Inventors and Innovators Alliance (NCIIA) at
Hampshire College in western Massachusetts. Launched in 1995, the NCIIA was created “to support
educational initiatives in creativity, technological innovation, and entrepreneurship.” Ajay sensed a fit,
but he immediately encountered his first obstacle in the grant process:
When I started looking at NCIIA I found out Babson needed to be a member of NCIIA. That would cost
$500…. While I was at Babson, I was significantly involved in a lot of different activities on campus, and
that helped my credibility with my professors. Everyone knew me, and I was talking to the Associate
Dean, Wendy Baker, every day. I told Wendy that Babson needed to be a member in order for me to
apply for this grant. Nobody had done this before, so I said that it is likely that, if we do this now, more
Babson students will end up getting grant money in the future.
In February, Ajay and Walter had brought in a third partner: Babson MBA student Troy Chen. In March,
after Ajay had successfully enrolled the college as an NCIIA member, he was faced with new hurdles:
My partners refused to apply for the [NCIIA] grant. They said this is all crap—just a lot of paper work. I
just said that I was going to work at it and get the grant. I remember that I applied for a [$20,000] grant
a day after the deadline and I called them and I said my partners are not listening to me, I want to do
this, will you still accept my app? They said we’ll do it as long as you FedEx it within a day…. They got it
the next evening and they agreed to take it.
While Ajay was busy investigating grant opportunities, he was also helping his partners search for an
engineer who might be willing to develop their prototype software for an equity stake in Vayusa. In
March, they signed up Tim Patel, a recent computer engineering graduate from Tufts University.
It was early spring of 2001 when Ajay started to run short on cash. To cover his rent, he began to cast
around for some sort of employment that would not seriously undermine his final semester of MBA
studies or his work with Vayusa. He discovered the answer in his own academic backyard:
The Olin Engineering School had opened, and they were looking for a student housing director. So I
applied, and guess what? I was accepted because [at the time] I was a student housing director with
Babson. With Olin, it was exciting to be part of something new, exciting, and something very
entrepreneurial. I just moved from one side of the campus to the other.
With all his commitments, Ajay found himself screaming along at a breakneck pace of 18-hour days. One
of his favorite posts was serving as the director of the Babson Technology Venture Group. In that
capacity, he traveled to technology conferences around the country, led Babson College to the Harvard
Cyberposium—the largest gathering of MBAs in the high-tech industry—and spoke with a wide range of
entrepreneurial and technology experts about the mobile payment and loyalty space.
Even with solid work experience, two engineering degrees, an interesting business model, and
boundless energy to promote and network, Ajay was still hard-pressed to gain any traction for Vayusa.
As they neared graduation, his partners appeared to be losing interest. Just then, they received word
that the NCIIA would be awarding Vayusa a grant of $12,500, and that Babson College would kick in an
additional $8,500 from its seed fund.
VeriFone
In June, flush with renewed spirit, resolve, and a bit of cash, the team moved into Idealab in downtown
Boston. They were building the product, talking to a wide range of funding sources, attempting to bring
merchants on board, and researching potential competitors (see Exhibit 6.2). As their vision for a mobile
payment and loyalty solution took shape, they began to realize that the only feasible way to capture
significant market share quickly would be to design technology that would work with an existing pointof-sale (POS) device (see Exhibit 6.3).
The team reasoned that, since the value of a POS systems manufacturer alliance would be directly
proportional to the market strength of that partner, they needed to aim high. They learned that the
number one POS payment company, with over 4 million units worldwide, was VeriFone. Ajay recalled
with a grim smile that the company, which was restructuring following a spin-off from parent HewlettPackard, gave him less than a warm reception when he described what his team had in mind:
VeriFone wouldn’t talk to us because they were like, who are you guys in Boston, out of nowhere,
wanting to use a VeriFone box for mobile payments? Stay away! They wouldn’t even give us a contact
name or number for anyone at VeriFone who would want to talk to us. So I said, somehow I have to crack
this. I called them every day. Finally after three months, they gave in. Okay, okay, here is the guy you
should talk to.
EXHIBIT 6.2: Competitor Matrix
Vayusa
WIRCA
Prepaid
cards
Mint
Speedpass
Utilizes current
infrastructure
Loyalty program
integration
Safe and secure
Transaction speed
Wireless
CRM
EXHIBIT 6.3: The Concept
Executive Summary Highlights
The Vision
With mobile phones becoming the most ubiquitous communication device of the times, Vayusa offers
innovative mobile payment and loyalty program solutions to enterprises in the telecom, retail, and
hospitality industries. The solutions extend the use of mobile phones beyond voice to data, messaging,
transaction, and multimedia.
The Problem
Carriers are starved for new sources of revenue as they reach saturation with voice services and are
looking for compelling applications to drive next-generation phones, messaging, and services. Currently
merchants spend significant dollar amounts on payment fees and millions of dollars to manage loyalty
programs, none of which are affordable to small and mid-size businesses. Merchants are thus looking to
a new, convenient, and cost-effective customer relationship offerings and services via the mobile
channel.
The Product
Vayusa’s product is a mobile payment and loyalty program technology platform that is device and pointof-sale (POS) neutral. The software platform transforms the existing POS into a very powerful mobile
transaction and marketing device by enabling it to accept mobile payments and trigger loyalty programs
with only a change in software.
The platform has two offerings:

Mobile payments—Enabling merchants to accept a mobile phone as an acceptable means
of payment instrument either at the point-of-sale or remotely. Vayusa offers merchants a lowcost prepaid service (stored value) in addition to access to existing debit and credit models. The
payment solutions are secure and as fast as existing payment technologies. With e-mail and SMS
being the key messaging drivers, Vayusa enables consumers to receive digital receipts and
transactional information on their mobile phones.

High-impact loyalty offerings and services—A wide array of tools and one-to-one marketing
programs now provide instant marketing promotions, interactive rewards, and better ROI.
Loyalty offerings include SMS-based coupons, promotions, notifications, and digital tags to drive
customers to the stores and offer better customer service and product/service information. The
offerings make it very easy and convenient for consumers to manage their payments/receipts
and loyalty programs, providing access to all the information from anywhere at anytime.
Differentiation
Vayusa’s technology platform works on existing infrastructure, thereby providing immediate
accessibility to markets and consumers. Vayusa is also the first to provide an end-to-end electronic
transaction processing system leveraging e-mail, SMS, and voice channels. By connecting the point of
sale to the Web, Vayusa will be one of the first companies to offer new applications that leverage the
Internet to provide faster and better services.
The VeriFone contact took a liking to the enthusiastic MBA and ultimately provided Ajay with a list of
VeriFone vendors and contacts. He suggested that Ajay work through the list. Ajay did. One of the
people he met over the phone was Nick Epperson, a former chief marketing officer at VeriFone and the
chief technical architect who had designed the VeriFone box.
As the summer of 2001 drew to a close, Ajay felt that he was beginning to build a good relationship with
Mr. Epperson and a number of other potential investors and advisors. Although the prototype was still
in the design stage and investors appeared to be waiting for merchants to sign on, the overall
momentum seemed to be in their favor.
Then came 9–11.
The Aftermath
The terrorist attacks in September exacerbated a downturn in the capital markets that had been
showing signs of weakness for some time. The drying up of the investor pool was a tough reality, but for
Ajay, the horror of 9–11 had hit far closer to home:
I lost six of my friends in the September eleventh tragedy…. The next three months after that were very
depressing…. Troy was supposed to have gotten married on September fifteenth in New York…. His
grandmother was now stuck on a flight from Japan in Seattle for three days…. Everyone was depressed….
The wedding was postponed…. October was Walter’s wedding, and that wedding happened. With the
weddings we had a precondition that you could not take a long vacation, so they came back after two
weeks. So he was married now, and it just was worse. He had more responsibilities…. For me, I am still
single so it makes it easier to do things, to make decisions… It was a terribly emotional ride.
EXHIBIT 6.4: Financial Projections
Years 1 to 5 (000,000)
Income Statement
Year 1 Year 2
Year 3
Year 4
Year 5
NET REVENUES
$0.3
$4.6
$34.6
$85.6
$169.8
COST OF REVENUES
$0.02
$0.4
$9.0
$24.0
$51.0
GROSS
$0.3
$4.2
$25.6
$61.6
$118.9
92
92
74
72
70
Sales & Marketing
$0.5
$1.9
$4.0
$14.6
$29.2
Research & Development
$0.4
$1.5
$2.0
$4.6
$7.9
General & Administration
$0.4
$0.8
$1.4
$3.2
$5.5
Total Operating Expenses
$1.3
$4.1
$7.5
$22.5
$42.6
457
90
22
26
25
$(1.0)
$0.1
$18.1
$39.2
$76.3
% of Net Revenue
OPERATING EXPENSES
% of Net Revenue
EARNINGS BEFORE INTEREST & TAXES
DEPRECIATION
$0.0
$0.70
TAXES
$–
NET EARNINGS (LOSS)
$(1.0)
$3.0
$5.3
$(0.55) $5.2
$11.2
$21.7
$(0.07) $11.2
$25.0
$49.4
Years 1 to 5 (000,000)
$1.7
Statement of Cash Flows
Year 1 Year 2
Year 3
Year 4
Year 5
Net Earnings
($1.0)
($0.1)
$11.2
$25.0
$49.4
Depreciation
$ 0.01
$ 0.7
$ 1.7
$ 3.0
$5.3
(Increase)/Decrease Accounts Receivable ($0.0)
($0.1)
($1.8)
($2.8)
($4.6)
(Increase)/Decrease Other Current Assets $0.0
$0.0
$0.0
$0.0
$0.0
Increase/(Decrease) Accounts Payable
$0.0
$0.0
$0.5
$0.8
$1.5
Increase/(Decrease) Other Current Liab. $0.0
$0.0
$0.0
$0.0
$0.0
Net Cash Provided by Operating Activities ($1.0)
$0.5
$11.6
$26.0
$51.5
OPERATING ACTIVITIES
Working Capital Changes
INVESTING ACTIVITIES
Technology & Equipment
($0.20) ($1.9)
$(2.9)
$(4.0)
$(9.0)
Other
$0.0
$0.0
$0.0
$0.0
Net Cash Used in Investing Activities
($0.20) ($1.9)
($2.9)
($4.0)
($9.0)
Increase/(Decrease) Short-Term Debt
$0.0
$0.0
$0.0
$0.0
$0.0
Increase/(Decrease) Long-Term Debt
$0.0
$0.0
$0.0
$0.0
$0.0
Increase/(Decrease) Common Stock
$0.01
$0.0
$0.0
$0.0
$0.0
Increase/(Decrease) Preferred Stock
$2.0
$0.0
$5.0
$0.0
$0.0
Net Cash Provided/(Used) by Financing
$2.0
$0.0
$5.0
$0.0
$0.0
$0.0
FINANCING ACTIVITIES
INCREASE/(DECREASE) IN CASH
$0.8
($1.4)
$13.7
$22.0
$42.5
CASH AT BEGINNING OF YEAR
$0.0
$0.8
($0.6)
$13.1
$35.2
CASH AT END OF YEAR
$0.8
($0.6)
$13.1
$35.2
$77.7
Years 1 to 5 (000,000)
Balance Sheet
Year 1 Year 2 Year 3 Year 4 Year 5
ASSETS
CURRENT ASSETS
Cash
0.8
Accounts Receivable
0.6
13.1
35.2
77.7
0.0027 0.1
1.9
4.7
9.3
Other Current
0
0
0
0.0
0.0
Total Current
0.8
(0.5) 15.0
39.9
87.0
Technology & Equipment Cost
0.2
2.1
5.0
9.0
18.0
Less Accum. Depreciation
0.0
0.7
2.4
5.4
10.7
Net Book Value
0.2
1.4
2.6
3.6
7.3
1.0
0.9
17.6
43.5
94.3
Short-Term Debt
0
0
0
0
0
Accounts Payable
0.0002 0.0
0.5
1.3
2.8
Accrued Expenses
0
0
0
0
0
Other Current Liab.
0
0
0
0
0
Total Current Liabilities
0.0002 0.0
0.5
1.3
2.8
0
0
0
0
FIXED ASSETS
TOTAL ASSETS
LIABILITIES & SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
LONG-TERM DEBT
0
STOCKHOLDERS’ EQUITY
Common Stock
0.01
0.01
0.01
0.01
.01
Preferred Stock
2.0
2.0
7.0
7.0
7.0
Retained Earnings
(1.0)
(1.1) 10.1
35.1
84.5
Total
1.0
0.9
17.1
42.1
91.5
1.0
0.9
17.6
43.4
94.3
TOTAL LIABILITIES & EQUITY
In early November, despite clear indications that the gathering would be dismal at best, Ajay decided to
attend the West Wireless Conference in California. He explained that, even though he had been correct
about the conference, his decision to attend yielded a golden connection:

My timing was so lucky. It turns out Nick Epperson had just left VeriFone and was looking for his
next gig. VeriFone had kept him as a consultant…. The conference was so bad. There was no one
there. I don’t even know why I showed up. But I met Nick in person. He and I clicked and he said,
“I’m on board; let’s do this.” I went back to VeriFone, and I said, “Guess what? I just got Nick as
my advisor. Do you want to work with us?” VeriFone replied, “Absolutely”—because now we had
credibility. It is all about having the right people.
After the conference, Ajay flew north to spend his second Thanksgiving with the Huseby family in
Seattle. Ajay presented his Vayusa plan to Tom’s three general partners at SeaPoint Ventures. In
summary, Ajay explained that Vayusa needed to raise $2 million in the first year to support the beta
development and implementation, and to hire senior management. Vayusa would then need another $5
million in funding to reach a positive cash-flow position in year three (see Exhibit 6.3). The presentation
went well, and all but one of the partners seemed to be on board. Unfortunately, that was one fewer
than Vayusa needed to garner a SeaPoint term sheet.
Spring Exodus
By January of 2002, Vayusa had a working prototype to support a detailed business plan, and a board of
advisors that included—in addition to Tom from SeaPoint Ventures and Nick from VeriFone—a former
CEO of NYNEX, a former CEO of Citibank, and Bob Anderson, director of the MIT Enterprise Forum and
former CEO of GenRad. Nevertheless, the founding team had been unable to make much progress with
the Boston merchants or secure commitments for a first round of venture funding.
Each month Ajay was painfully reminded of their need for a capital infusion by a persistent Indian
national whom he had met through an organization of Southeast Asian entrepreneurs:
Rahul used to call me every month to see if I was interested in working with him. He was based in Boston
and had an outsourcing company in India to write software code. Every month he used to call me and
say like, “Hey I like your idea, would you be interested in working with me? I want to work with you.”
Due diligence by contacts Ajay had back in India verified that Rahul would be an excellent choice to build
the software platform, so Ajay continued to string him along until he could raise enough capital to take
that next step. Ajay had applied for a follow-on NCIIA grant, but that money would likely be less than the
first award—and far less than they would need to move ahead in a substantial way.
Troy, whose wedding had been rescheduled for April, announced in late January that he was leaving the
team and moving back to New Jersey. The following month Ajay kept a meeting that Troy had scheduled
long before with a gentleman recommended by a venture firm that had liked their concept but did not
participate in early-stage funding. Ajay described the meeting with Jack Weston, a 20-year credit card
industry veteran who had recently joined a startup that was building applications to store coupons on
charge cards:
When I showed Jack what we were doing, it struck him that we were one step ahead [of his company]
because we had the chip and our solution was with every cell phone…. He loved the demo, and we ended
up having a two-hour conversation. When he started asking me about the team, I realized that he might
be looking for his next gig. I hinted to him in the meeting that we were looking for senior people or
someone from the industry who knows the space. I asked if hewould be interested. He said, “Let me think
about it.” We started meeting once a week after that.
Two months later Mr. Weston joined Vayusa as an advisor, but at the same time, their software
designer Tim Patel decided to leave the team. Soon after, Walter brought in Phuc Truong, a Babson MBA
with whom Ajay had never worked. Ajay commented that his initial skepticism was soon allayed:

Phuc was running Club Nicole in Boston. Phuc and Walter had worked together in some of their
classes. I didn’t know Phuc at all then. Walter said that Phuc wants to join the team and that he
had a lot of merchant contacts… he knew a lot of wealthy people in town as well… I’m like, I
don’t know Phuc, and he runs a club; what is he going to bring to the table? It turns out that all
the merchants in Boston knew Phuc because he had worked before for a startup that was a retail
business and he knew every damn merchant in the city… It made a lot of sense because I didn’t
have time to go out and talk to a lot of merchants. I needed someone who knew the merchants
on a very personal level [because] with a lot of shops—like small mom-and-pop shops—it is very
much about personal relationships.
While it had seemed that Walter had suggested Phuc as a substitute for Troy, when Walter called it quits
less than a month later, it was clear that he had not wanted to leave his good friend Ajay standing alone
at the helm.
Go or No Go?
With all of his original partners gone and Phuc barely up to speed, Ajay was once again standing on the
edge of a decision to try to keep moving forward or cut his losses and head back to Wall Street. It was
maddening. Without a substantial startup investment soon, Vayusa would most certainly fail. Ajay
leaned back, glanced at his cell phone for the time, and considered his next move.

Entrepreneurial Attributes: Consider Ajay’s background and experience. Create a
comprehensive list of attributes that you think Ajay possesses. Which three are the most
important; why do you think so? How did these attributes help him succeed?

Business Plan Outline: The case includes an executive summary; using the model below, create
a brief 10-slide PowerPoint presentation about his new venture.

Bootstrapping: Why did Ajay pursue the bootstrapping method of getting his company off the
ground; please describe at least six examples of his efforts in terms of financing, services, and
people.

Opportunity and Market Assessment: How did Ajay and Walter find this opportunity? How big
is the market, do consumers and merchants have a need for the product, what does Ajay have
to do to answer these questions? (Instructor Note: Ajay needs to gather initial sector market
data and customer feedback to gauge attractiveness.)

Funding and Team: Would you invest? What does Ajay have to do to get funding sources
interested?
Paper Length: Four to five pages—PowerPoint—Max 10 slides including cover page
“Business Model”
Style Pointers for the Written Plan and Oral Presentation
Once you start writing plans for external consumption, the way you present the information becomes
important. Not only do you need to capture the reader’s attention with a well-researched opportunity,
but also you need to present your case in a way that makes it easy and interesting to read. Too many
business plans are text-laden, dense manifestos. Only the most diligent reader will wade through all that
text. The key is to create visual catch-points.
Use a table of contents with numbered sections, as we described earlier in this chapter. Then use clearly
marked headers and subheaders throughout the document. This allows the reader to jump to sections
she is most interested in. Another way to draw the reader to important points is to use bulleted lists,
diagrams, charts, and sidebars.9 Your reader should be able to understand the venture opportunity by
just looking at the visual catch-points of a plan. Work with your team and trusted advisors on ways to
bring out the exciting elements of your story. The point is to make the document not only content rich
but also visually attractive.
Some investors have no interest in a plan at all. Instead, they prefer to see an executive summary and
PowerPoint slides, and they often read the PowerPoint slides instead of asking the entrepreneur to
personally present those slides. We have already discussed executive summaries, so let’s spend a few
moments on PowerPoint slides. You should be able to communicate your business opportunity in 10 to
12 slides, possibly along the following lines:

1. Cover page showing product picture, company name, and contact information

2. Opportunity description emphasizing customer problem or need that you hope to solve

3. Illustration of how your product or service solves the customer’s problem

4. Some details (as needed) to better describe your product

5. Competition overview

6. Entry and growth strategy showing how you get into the market and then grow

7. Overview of your business model—how you will make money and how much it will cost to
support those sales

8. Team description

9. Current status with time line

10. Summary including how much money you need and how it will be used
The key to creating a successful presentation is to maximize the use of your slides. For example, graphs,
pictures, and other visuals are more powerful and compelling than texts and bulleted lists.
Entrepreneurs who create bulleted lists often use them as cue cards during an oral presentation and
either stare at the screen behind them as they talk or continually look back and forth between the
screen and their audience. In either case, this behavior might prevent you from creating a personal
connection with your audience.
This connection is important because it conveys that you have confidence in your plan and that you
have a strong command of the concept. A second problem with bulleted lists is that those in your
audience will tend to read them, and their attention will be focused on the slide and not on what you
are saying. Again, you want to create a strong personal connection with your audience. You should be
able to use graphics to communicate the key points. Doing so will better engage your audience and
make them more inclined to view your opportunity favorably.

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