Mercado Harvard Case Solution & Analysis

His car eased back onto the Sand Hill Road in Palo Alto, California. As head and CEO of Mercado, a company that supplied the search and merchandising technology to electricity retail web sites, he had just met with another venture capital (VC) business in an attempt to raise a $26-million Series E round of financing. It was June 2008 and Mercado currently offered both on premise and on-demand or "software as a service (SaaS)" variations of its applications. Despite the fact that earnings from both options was projected to grow in excess of 80 percent Leibow discovered that investors normally pushed back on the firm's hybrid method of distribution.

Some VCs desired Mercado to focus entirely on its conventional enterprise business based on a perpetual, on-premise licensing model. Leibow understood that he had to make a decision quickly in order to raise the capital the firm needed, but he also wondered if it was not impossible to continue pursuing both approaches. The choice he made would appreciably affect the sales force and R&D team as well as which customers the business of Mercado targeted and how it would bring and keep them.

PUBLICATION DATE: July 10, 2008 PRODUCT #: E296-PDF-ENG

This is just an excerpt. This case is about FINANCE & ACCOUNTING

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