Case study PowerPoint
Albert Hernandez is the CEO of Healthspeak, a health technology company. He feels proud of how fast his company has grown’ in three years. The business has partnered with more than 500 health plans, employers, and federal programs to improve efficiencies of health care provision and maximize revenues. However, Albert Hernandez requires to raise more capital to improve his technology infrastructure. Initially, he was thinking of the traditional venture firms. However, the receives a call from Global Company Devices (GCD), who claims to have been referred by NEA. Hernandez is in a dilemma of whether he should take the deal of the investment with a corporate venture capital (CVC) group or use other alternative venture capitals that are interested in investing at Healthspeak.
Problem
HealthSpeak has been partnering with other big companies to improve efficiency in healthcare provision and maximize revenue. It has managed to raise over $20 million in traditional capital financing ventures to build a data-driven and personalized approach system to optimize healthcare delivery. However, Heathspeak’s technological infrastructure is currently straining financially due to the increased user base. Hernandez is out to seek a venture that will support the Healthspeak backbone. His initial plan is using the traditional venture capitals as he’s been using for the past three years. However, he receives a proposal from Global Company Devices (GCD) who wants to partner with HealthSpeak and tests their new commodity, Newton. Hernandez hardly knows about Corporate Venture Capitals. Moreover, his partners advised him against going for CVCs. Hernandez is puzzled whether he should take the offer from GCD or stick with the VCs he is familiar w.
Solutions
HealthSpeak should go for GCD’s offer. After Munce explained the benefits of GCD to Healthspeak, it is clear that the latter is going to benefit more when Hernandez chooses CVC over traditional VCs. CVCs focused on financial end goals over short and long term horizons, unlike the VCs that focused on return on investment per year. VCs request for additional rights and dictate the types of shares they will buy while the CVCs are flexible and focus on deriving strategic value form an investment and not financial gains. Moreover, GCD was going to test their new AI, Newton, with Healthspeak, which would improve the latter’s efficiency. Since Healthspeak was an analytic data company, then Newton would increase the speed and quality of the data analysis.
Conclusion
Even if Hernandez is hesitating on signing away Healthspeak core technology to a single vendor, he should take the offer as it is benefiting Healthspeak in great lengths. Apart from getting the capital that the company seeks, GCD is introducing an AI to Healthspeak’s operations, which will increase efficiencies in care delivery. Moreover, GCD is not demanding special rights as the traditional VCs do.