Abstract
In 2015, Marco Janmaat, along with his father and two friends, founded VR Owl to sell VR cardboards, VR content and VR-supported corporate events. The business grew exponentially, and within a year, the company had become the major VR solutions provider in the Netherlands. However, Janmaat expected that the demand for his products and services would soon decline, as the hype surrounding VR was dying down. To find an alternative survival path, Janmaat started to redirect resources towards innovating scalable new products. But before he could fully develop these products and gain market traction, the company's revenues had plummeted due to the shift of focus from the core business to R&D. In a pinch, Janmaat approached a venture capital firm that agreed to invest in VR Owl but only on their own terms. The alternatives Janmaat had were clear: he could either go back to his original business and hope for the best, or accept the VC's unreasonable offer and make a leap into the unknown.
Objective
1. To highlight all external financing options available for new ventures. 2. To study in depth the positive and negative aspects of each financing alternative. 3. To make students understand a typical dilemma that entrepreneurs face when in need of funds. 4. To discuss the importance of bootstrapping in start-up firms and to stress the importance of the entrepreneur’s social capital and networks. 5. To discuss the risks associated with the involvement of family and friends in business.
Citation Note
Based on field research; 9 pages.
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