Washout: The Founders Tale and Investors Tale Harvard Case Solution & Analysis

Competing stories of the founders Alantec, Inc, and the venture capitalists who funded the company considered in the context Kalashian against Advent VI LLC The California Supreme Court case. The founders of the company that manufactured the switches for computer networks, raised several rounds of funding from venture capital firms, which ended the control board of directors. After the company has continued to lag behind their sales projections, the board ousted founders and brought new management. Subsequently, the company raised two new round of funding, which led to the dilution of the interests of the founders of about 8% to less than 0.01%. Alantec then launched a new product "Power Hub», which has become very successful, and the company eventually went public. Founders sold their remaining shares soon after the IPO. Two years later, Alantec was bought for the equivalent of $ 70 per share. Following the sale The founders sued, arguing that venture capitalists committed fraud and breached its fiduciary duty, controlling shareholders Alantec. matter presents actual extracts from the notes of the court as the founders and venture capitalists, and is competing views on how and why it happened dilution. "Hide
by Lena G. Goldberg, Chad M. Carr Source: Harvard Business School 13 pages. Publication Date: November 16, 2010. Prod. #: 311078-PDF-ENG

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