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Walnut Case

In: Business and Management

Submitted By crazylemon
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Walnut Venture Associates

RBS Group is a complete accounting application solution provider targeting its products to software companies. Their product, SOFTRAX, provides software companies with a full-package of solutions spanning in financials, sales & marketing, customer support and software operations. Robert O’Connor, RBS’s founder and CEO was seeking a $2 million second round venture capital financing to support their regional sales offices growth and recruit personnel in sales, implementation & customer support. Though RBS is still a young company, it indicates to position itself in a unique niche market within a solid market. They have seasoned management team and have allied with several key clients and partnerships. What’s more important, RBS had positive earnings since starting the business. Walnut Venture Associates, a group of Angel investors seeking early-stage type investment opportunities in the New England market, is among parties interested in providing capital to RBS. It is definitely a right decision for them to make investment in such promising company. However, this angel group has an investment policy capping the investment commitment ranging for $250 thousand to $1 million in a single round of financing. In addition, taken into consideration of RBS’ aggressive expansion risk, it is viable for Walnut to persuade management team in RBS Group to reduce financing amount to $1 million. Before investment, Ralph B. Wagner, the leader of this investment, requires to analyze the financial and conduct due diligence on RBS to weigh the viability and proceed the investment. Although RBS Group has solid revenue and great profit margin in the middle market with ample opportunities and avoids direct competition from giants including SAP, Oracle, etc., there are still plenty of risk considerations before Walnut Venture Associates can proceed. The...

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