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Paul Olsen Case Discussion Paper

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Paul Olsen Case Discussion Write Up

Nina Borysova

This case has been very interesting for me, because of how controversial I think it is. We had a very lively discussion in class with a strong divide around how Paul Olsen should proceed.

There are certain things that Paul, as an aspiring entrepreneur has done well:

1. He was able to secure a restaurant location with a lot of potential. Even though gentrification in a big city can go either way, if done well, and supported by the city government, such revitalization efforts can really jumpstart commerce and drive new, higher-­‐income customers there.

2. Paul has been tirelessly rallying to get investments from partners and has selected a smart way to put the agreement together – attract many small-­‐ share partners. In this way there is less risk if several of them want to eventually pull out vs. the situation when there are only several partners present with large sums of money invested. One of them pulling out can very well shut the business down.

3. Lastly, although not quantifiable or easily assessible, the boldness of Paul’s move to invest his student loan money into a business after his previous failure deserves admiration and is a true showing of an entrepreneurial spirit.

The project had many hurdles – unfinished construction around the venue, slow process of raising necessary capital, lack of experience of both main partners in the restaurant industry, to name a few. Moreover, Paul’s position of a partner was much less attractive vs. the one agreed for his main partner, Rose, who would own 30% of the business and put up no money upfront.

With the new threat of mafia taking over the business we are now not sure who Paul will handle the situation – give the business up, fight back or ignore the situation alltogether. It is my conviction based on everything that I have learned, that Paul would attempt to fight back, perhaps reporting the threat to police, but this move will not be successful and he will have to eventually give up the restaurant and move elsewhere to protect him and his family.

This case teaches us a valuable lesson of how important it is to take all factors into account, when starting a business, including external environment, which is not limited to competitive landscape. Any low probability and high probability risks need to be carefully analyzed and this analysis is instrumental in making thought out business decisions.

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