Qualtrics: Bootstrapping Growth

By Maryanna Quigless, Jonathan Levav
2014 | Case No. SM224 | Length 18 pgs.
In March 2012 the founders of Qualtrics sat together in the Provo, Utah, office of advisor Duff Thompson. They stared down one of the toughest decisions in the ten-year history of the company. Thompson and Qualtrics’ CEO Ryan Smith had spent the last few months fielding calls from venture capitalists and strategic partners who were interested in becoming a part of the Qualtrics story. The culmination of their effort was a $500 million buyout offer, several venture capital (VC) term sheets, and a line-up of prominent institutional partners. This case examines Qualtrics’ growth through ten years of bootstrapping and challenges the reader to evaluate four potential liquidity options for the next phase in Qualtrics’ evolution.

Learning Objective

This case provides an in-depth study of how Qualtrics navigated four phases of growth. The first phase highlighted how a small family-team in a basement in Utah built an early survey product. This was followed by a second phase that focused on scaling the core Research Suite product. Next, the case examines the third phase of product expansion and national scale which caught the eye of investors. Finally, the case concludes in the fourth phase which presents four funding opportunities for evaluation by CEO, Ryan Smith and the rest of the founding team. Teaching goals include: • Corporate planning under extreme financial constraints • Execution strategies for early-stage companies • Evaluation of the venture capital investment process • An understanding of the varying long-term implications of funding options (bootstrapping, institutional financing, venture capital funding, and strategic buy-out) • The role of market definition/selection in planning for scale.
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