EE204: Business Management for
Electrical Engineers and Computer Scientists



Venture Capital

Read

  1. How Venture Capital Works (HBS course materials)
  2. Alternate Sources of Funding
  3. Envia Systems (HBS course materials)

Case Summary

Venture capitalist Atul Kapadia was inclined to provide seed funding for Sujeet Kumar and Michael Sinkula to found Envia Systems, a lithium-ion battery company. Admittedly, Envia was little more than the founders' vision of an affordable electric vehicle and the potential of playing in a very large market. But for Kapadia, it was precisely these two key ingredients that made Envia attractive and akin to other early-stage investments he had made at Bay Partners.

Discussion Questions

  1. Consider the range of information Kapadia had at the time of his investment in Envia. What would lead you to invest? What would give you pause?
  2. Was Envia situated in the appropriate part of the S-curve as described in the reading? Is Kumar's timeline for realizing the product a good one from a VC standpoint?
  3. What are the advantages of the Li-ion battery? What must happen in order for these advantages to be realized?
  4. Evaluate Envia's go-to-market strategy. Discuss the difficulties Envia faced in finding a customer. Do you think they made the right decision in approaching end users like Apple, Motorola, and GM? Were there other potential customers Envia could have considered?
  5. Critique Envia's initial choice for CEO.
  6. Envia went through multiple stages of funding and product development without finding a customer. Why did the funding continue through this period of uncertainty?
  7. How should Kapadia proceed with the term sheets he has? How much money should he seek in the Series C round, and from whom?