Internet Securities, Inc.: Path to Sustainability

Abstract

Founded in 1994 when the Internet was still a "toy for techies," the case is set in 1998 when Internet IPOs were red-hot. Internet Securities provides hard-to-find financial, business, economic, and political information on emerging markets. Information from over 600 information suppliers in more than 25 emerging markets (e.g., China, Russia, Poland, Venezuela, Argentina, Chile, Turkey) is provided to over 650 institutional clients, including J.P. Morgan, Deutsche Morgan Grenfell, KPMG, and ING Barings. After ruling out seeking another round of VC financing, the cash-strapped founder of this Internet information service provider must decide whether to IPO or accept an offer to be acquired by Euromoney, a global publishing and information content provider that is eager to launch an Internet information service. The case contains a term sheet that can be reviewed to support analysis and decision making.

Learning Objective: The case enables students to: Understand the challenges of building a sustainable business from idea to opportunity to launch and growth; Analyze the company's business model; Compare Internet IPO data and comparable company acquisition transactions from 1994 through 1998; Determine valuation and deal terms; and Identify personal motivations of a founder at key transition periods in the process of launching and growing a new venture.