An Angel Investor with an Agenda (Commentary for HBR Case Study)

Description

Gloria Londono, the owner of a chain of innovative, holistic day care centers for the elderly in Spain, is offered 3 million euro by Victor Serna, a wealthy physician-investor. In exchange, Serna wants a 25% stake, a board seat, a vote on all strategic decisions, and the ability to liquidate his position in five years, either through a public offering or a sale. His terms are not negotiable; his objectives are not transparent. The money would enable Londono to open 10 additional wholly owned centers (all but one of the existing locations are franchises) and would increase her control over the brand. Should she accept Serna's offer or stick to her currently successful strategy of going it alone? The authors of this fictional case study are Regina E. Herzlinger, of Harvard Business School, and Beatriz Munoz-Seca, of IESE Business School, University of Navarra. Expert commentaries are written by T. Forcht Dagi, of the Harvard-MIT Division of Health Sciences and Technology and HLM Venture Partners, and Merle D. Griff, CEO of SarahCare Adult Day Care Centers and Home Care. For teaching purposes, this is the commentary-only version of the HBR case study. The case-only version is Reprint R1103X. The complete case study and commentary is Reprint R1103M.

Keywords

Corporate governance Entrepreneurship Investors