Prospect Colleges

By H. Grousbeck, Alicia Seiger
2004 | Case No. E179
The case takes the reader through Julie’s initial effort to raise money simultaneous to identifying an industry and an acquisition target. Julie eventually settles on the for profit post-secondary education industry and raises funds to purchase a small career college in southern California. She and her investor set up a holding company, Prospect Colleges, with which they plan to acquire and operate multiple small schools, thereby gaining efficiencies in operations and management, and benefiting from the marketing and branding power of the Prospect name. In her acting role as President of Clarita, the first Prospect college, Julie faces challenges with respect to ageism among her administrative employees and the difficult decision of whether to give-in to her investor’s preference and hire an experienced COO before Prospect has taken another step towards scaling its holdings.
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