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• Case | HBS Case Collection | 2013

  Getit

  Ramana Nanda

  Sidharth Gupta, CEO of Getit Infomediary Ltd, had just received a term sheet from Helion Venture Partners (Helion), one of India's independent venture capital firms, offering to invest Rs 200 million in return for an equity stake in the company. His dream of transforming Getit from a regional print company into a digital company with broad geographical reach was within grasp. However, Gupta had to act fast; Helion's term sheet would expire in a fortnight if unexecuted. Bank finance and trade credit had tided Getit through tough times in the past, and Getit still had a Rs 250 million bank line to draw on. Should he take the venture capital investment? And if so, what implications would this have for his family business and for him personally?

  Keywords: venture capital; publishing; media and publishing; entrepreneurial finance; Venture Capital; Media; Entrepreneurship; India;

  Citation:

  Nanda, Ramana. "Getit." Harvard Business School Case 813-178, May 2013.

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• Working Paper | HBS Working Paper Series | 2013

  Independent Directors' Dissent on Boards: Evidence from Listed Companies in China

  Juan Ma and Tarun Khanna

  In this paper, we examine the circumstances under which so-called "independent" directors voice their independent views on public boards in a sample of Chinese firms. First, we ask why independent directors dissent, i.e. how they justify such dissent to public investors. We find that when independent directors dissent, they tend to offer mild, subjective justifications. Overt criticism of the management team is rare. Next, we ask when an independent director is more likely to dissent and who is more likely to dissent. Controlling for firm and board characteristics, we find that independent directors' dissent is associated with breakdown of social ties between the independent director and the board chairperson, who is at the center of the board bureaucracy in China. Dissent is more likely to occur when the chairperson who appointed the independent director has left the board. Dissent also tends to occur at the end of board "games", defined as a 60-day window prior to departure of the board chairperson or departure of the independent director herself. The endgame effect is particularly strong, seeing 27% of the dissent issued at board "endgames" which represents only 4% of independent directors' average tenure. While directors with foreign experience are more likely to dissent, we do not find that academics, accountants and lawyers are significantly more active in dissenting. Lastly, we show that dissent is consequential to the director and the firm. For directors, we show that dissent is significantly associated with the likelihood of exiting the director labor market. For firms, we document an economically and statistically significant cumulative abnormal return of -0.97% around announcement of dissent. Although the literature has suggested that dissent might be reflective of diverse viewpoints, and perhaps beneficial in and of itself through reduction of firm variability, we do not find this offsetting beneficial effect to be strong.

  Keywords: corporate governance; independent directors; China; China; Asia;

  Citation:

  Ma, Juan, and Tarun Khanna. "Independent Directors' Dissent on Boards: Evidence from Listed Companies in China." Harvard Business School Working Paper, No. 13–089, April 2013. (Revised May 2013.)

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• Case | HBS Case Collection | 2013 (Revised from original 2012 version)

  TerraPower

  William A. Sahlman, Ramana Nanda, Joseph B. Lassiter III and James McQuade

  John Gilleland, CEO of TerraPower, returned to his office after a lengthy meeting with potential investors. It was October 2012, and TerraPower was in the process of raising a $200M Series C round to finance the ongoing development of its next-generation nuclear reactor. Though early in the fundraising process, Gilleland noted that this most recent conversation was similar to conversations with other interested cleantech growth equity investors. The conversations circled around a common theme: "This is the biggest idea that's ever been presented at our partners' meeting. We love what you're doing, but it's not right for us as an investment." Outside of raising money from typical growth equity and infrastructure funds, Gilleland could partner with a government and/or form a joint venture with an existing nuclear power player. Reliance Industries as an investor in TerraPower could provide an entry point into the fast growing Indian market. At the same time, Gilleland and Gates had talked with China National Nuclear Corp. about a possible cooperation with TerraPower. Whom should Gilleland call next?

  Keywords: nuclear power; entrepreneurial finance; venture capital; Financing and Loans; Energy Industry; United States; China; India;

  Citation:

  Sahlman, William A., Ramana Nanda, Joseph B. Lassiter III, and James McQuade. "TerraPower." Harvard Business School Case 813-108, April 2013. (Revised from original November 2012 version.)

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