Preface of Textbook
About the Textbook
About the Authors
Book Website at McGraw-Hill
DVD Contents
Stanford 1e Book Website
McGraw-Hill 1e Book Website
Book Contents
Table of Contents
Venture Opportunity, Concept and Strategy
Venture Formation and Planning
Functional Planning of the Venture
Financing and Building the Venture
  Business Plans (App. A)
  Case Studies (App. B)
Online Sources (App. C)
Sample Syllabus
Course Overview
Calendar of Sessions
Entrepreneurial Perspective
Idea or Opportunity
Gathering Resources
Managing Ventures
Entrepreneurship and You
Additional Resources
Schools Using This Textbook
Authors Blog


This case examines the challenges that Yahoo! founders Jerry Yang and David Filo faced in analysing and choosing a first-round financing option. With the possibility of either selling Yahoo! outright, partnering with a corporate sponsor or starting an independent business, Jerry and Dave have to consider not only the established culture and needs of their novel fledging webportal, but their own personal entrepreneurial goals and vision for Yahoo!. The pressure is also on them to make a critical decision, as Mike Moritz of Sequoia Capital offers them deal with a 24 hour deadline.

This case also includes excerpts from the original Yahoo! business plan.

When should this case be discussed?

Yahoo! is a good first or second case to tackle in an introductory class in technology ventures. A student should be able to make good headway on the case after reading the first four chapters. The case can also be revisited after a more in depth examination of business plans and funding sources.

Teaching notes are available in Instructors Section at
There are two other accompanying cases about Yahoo! that can be found at

Relevant chapters and questions

Ch 3: Building a Competitive Advantage
Ch 4: Creating a Strategy
Ch 7: Venture Creation and the Business Plan
Ch 17: The Financial Plan
Ch 18: Sources of Capital
1. What makes Yahoo! a true business opportunity and not just an idea? How do Dave and Jerry's personal goals and vision for Yahoo! align with each of their financing options? What is the vision and the value of Yahoo!? What is its business model and strategy?

2. Analyze the Yahoo! business plan using Sahlman's model as presented in Figure 8.7 (p. 191). Identify the major risks in each of these categories: deal, resources, people, opportunity.

3. What are the advantages and disadvantages of each of the funding options Yahoo! could pursue?

Copyright 2004-2007 Stanford University. All Rights Reserved.