Sendwine Case

Case Assignment #6: Sendwine

1. Imagine that you are a Venture Capitalist in 1999 and that you have been asked to invest $30 million “B” round for Sendwine.com. Would you invest? What criteria would you use to make your decision? How is Sendwine position against those criteria?

If I was a venture capitalist in 1999 and I was asked to invest $30 million for Sendwine.com I would be a little skeptical at first. The internet was fairly new at that time and there was a lot of uncertainty around it. People weren’t sure if the older generation would learn to adapt to it and people weren’t sure if it was going to last in the future years. Some people simply viewed it to be a new fad but if they knew how much it would expand over the coming years they would surely invest in it. If I was a venture capitalist, I would consider the investment with the rest of my team and I would look at all of the alternatives I could invest my money in. I would look at the rise of the internet and make an informed decision about whether it was going to fade away or burst into the limelight. I would look at Sendwine.com’s previous investors, as well as their previous years’ profits. I would also look at the future path that Sendwine is looking to pursue and see what they are going to be doing with my $30 million. I would consider Sendwine’s operations and see how they run their business from the start of the product to the end result when the customer receives it. Sendwine is positioned very well along that criteria. Sendwine made huge profits in their first few quarters of starting their business and it only seemed to be going uphill from there. Sendwine was also in one of the most robust markets in the industry at that time, the internet. The internet was bringing about huge changes which would create many conveniences for the customer. It was surely only going to get better rather than fade away and therefore Sendwine would be one of the many benefiters from this. Sendwine also has a...