Babson Case Number: BAB068 | Length: 7 Pages

Abstract

The SolidWorks case is a sequel to the Jon Hirschtick case (BAB 061). It describes the second round of financing. The principal issues in the case are valuing a software business that has not yet shipped product, raising money from “strategic” partners and venture capitalists, and deciding how much money to raise.
SolidWorks raised $3.8 million of first–round venture capital and has made excellent progress with that money. It has developed a product that is getting rave reviews. It has established channels of distribution and begun shipping product. It estimates that it needs $4.5 million in the second–round of financing to take it to profitability. The decision that Jon Hirschtick and his team have to make is whether to take $4.5 million or perhaps as much as $10 million in this round of financing.