2001 | Case No. SM48 | Length 20 pgs.
The founders of a software company met their first round milestone of building an operational prototype that directs the flow of information across networks. The company now has to develop a business plan. The company’s original intent was to sell precoded chipsets or complete products to perfect quality control, protect its intellectual property, and develop direct customer relationships while testing demand. Modum manufacturing would be outsourced and only finished goods would be inventoried. The company would initially employ a direct sales model, which would transition to distribution and retail partners once sales volume and profitability was proven. At the board meeting, however, the investors were opposed to a product company and insisted the company revise the business plan to reflect a traditional software licensing model; they had reservations about manufacturing and inventory and thought the expenses of such an operation would be beyond what this company could handle.
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