Phoenix Industries

By H. Grousbeck, Brian Keare
2000 | Case No. E26
This case describes the story of Phoenix Industries, a computer document assembly software company, and its management team. After a venture capital investment in the company, the company brought in a professional management team and the founder remained as a Board member. As the company tried to implement its growth strategy, tensions raised between the management team and the founder as Board member. The management team felt that they could not accomplish anything with the founder’s veto of all their proposals. After a number of years of this, the management team began to seek an exit by selling the company. They were successful in finding a number of bidders and finding an attractive price for the company. However, the management team felt that they were not being compensated enough for their efforts, so they negotiated a special deal for them in the acquisition, with the consent of the venture capital investors. However, the founder’s family objected to this arrangement and threatened to hold up the whole deal if it was not made attractive for them. The reader is asked to figure out a way to compromise among the players and select a prudent course of action. Teaching Note Available.
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