Capital Markets-Case Study Analysis on Apex Investment Partners

Read the following Harvard Business School case study:

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Lerner, J. (1995, October 27). Apex Investment Partners (A): April 1995.

Next, answer the following questions and provide your recommendation. Provide a rationale for your recommendation. There is a “help” spreadsheet that can be used to assist in completing the financial analysis and for organizing and summarizing the issues. Spreadsheet tables can be pasted into a Microsoft Word document to highlight and summarize the main issues, but you should also include text discussion within your document that expands on the summary tables.

Case study analysis questions:

  1. Summarize the operations and past funding used by AccessLine. For a venture capitalist, does AccessLine appear to be an attractive investment opportunity? Identify the attractive and unattractive aspects along with the nature of the risks associated with the company.
  2. Assess which of the two venture capital group appears to have the better capability and better fit for funding AccessLine. Discuss the advantages and disadvanatages of each.
  3. Discuss why the valuation of AccessLine is important to understand and what stakeholders are concerned with this value. Complete the valuation model template presented within the help spreadsheet. Include the model in your report document and describe the steps and the results.

Present your case study analysis in Microsoft Word document format.

All written assignments and responses should follow APA rules for attributing sources.

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Harvard Business School 9-296-028
Rev. November 17, 1997
Apex Investment Partners (A): April 1995
As the three venture capitalists from Apex Investment Partners headed to the Seattle-Tacoma
Airport, their mood was pensive. Rick Bolander, George Middlemas and Oliver Nicklin—along with
several analysts from an affiliated firm—had just spent nearly 12 hours with officials from
AccessLine Technologies, an emerging telecommunications firm based in Bellevue, Washington. The
company appeared to have extraordinary potential for rapid growth. If Apex was to be the lead
venture investor, it would need to move quickly. But before the transaction could be completed,
however, two major obstacles needed to be surmounted.
AccessLine had pioneered the development of the first commercial system to deliver a broad
array of personal communication services. It was the developer of the “One Person, One Number”
concept, which allows individuals to manage all of their telecommunications (personal and business
calls, faxes, voice messaging, and paging) through a single phone number. A caller need not know
the location or phone number of a subscriber’s communication device, but simply dial the AccessLine
Apex was not only excited about AccessLine’s technology, but also about its business
approach. The intense competition among traditional telephone companies and new entrants had led
carriers to offer new services to differentiate themselves. The AccessLine System provided such a
differentiating service, with relatively modest capital and operating expenditures. The firm had
signed agreements with several key players in the telecommunications industry which allowed it to
generate increasing fees as the use of these services increased. The company also was poised for
rapid international growth through its relationships with European and Canadian carriers. Unlike
most early-stage deals in which Apex considered investing, AccessLine had relatively limited risk:

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