Punch Tab Case

Punch Tab Case Questions

1. Now that he is raising capital for his second business, how is Kamara’s situation different now versus when he was starting YousendIt? What are the three primary reasons?

When Kumaran started YousendIt, not many VCs or angels knew of him so it was hard to finance the first stages of the project. However, after successfully creating YousendIt and selling it, investors were more likely to finance PunchTab because Kumaran had proven his success with his first project. PunchTab was also a better prepared project because Kumaran learned how to face the challenge of starting up a company. Elaborating on its future financial planning and company environment, Kumaran and Oufkir created an actual business plan for PunchTab with future expectations, unlike YousendIt. Kumaran’s goal for PunchTab was different from YousendIt since he wanted a bigger and later exit with PunchTab with more control from him as the CEO. By having more of a hand in the company, Kumaran wanted to create a better business environment that would fit his lifestyle.

2. Please name three qualities that would make an ideal angel investor for PunchTab?

An ideal angel investor would be someone who helps PunchTab grow by helping develop ideas for the company. They would also have to be willing to put in the time to see the project to the end and be able to accept any incoming problems about the investment.

3. Why does Sturiale say that deal terms (e.g., valuation, % ownership) are irrelevant? Is that what determines how wealthy an entrepreneur will be? What is meant with that statement?

Sturiale stresses that wealth will come for an entrepreneur when there is the right market size and the right people are working on the project. By having people who are patient, uplifting, and diligent, the project will grow and thus reduce the risk of the business. With the right team and market, a project’s potential will naturally catch the eyes of angels or VC...