Case | HBS Case Collection | September 2014 (Revised March 2015)

Fast Ion Battery

by Ramana Nanda, Robert F. White and Stephanie Puzio

Abstract

John Davidson, a partner at Ware Street Capital (WSC) and a board member at Fast Ion Battery, had just received a phone call from Don Lerner at Bluelock Ventures telling him that Bluelock would not participate in the $5M bridge financing for Fast Ion Battery. Lerner's call could not have come at a worse time. Fast Ion was running out of cash and needed another round of financing urgently to continue developing its revolutionary battery.
Davidson faced a real dilemma. On the one hand, the company was finally gaining traction with developing its technology and the search to replace the current CEO had yielded two prospective candidates who were extremely well-suited to drive the company forward with a more capital efficient business model. On the other hand, Ware Street Capital and the two other investors had already invested $10 million into a company that had not performed up to investors' expectations. Would they be throwing more good money after bad by providing the bridge financing? Moreover, would other, later stage, investors be willing to provide the significant amounts of capital required to get the company to an exit event given the changing climate for clean tech investments?
These questions became more pressing following Lerner's call that Bluelock had chosen not to continue backing Fast Ion. Was Fast Ion Battery worth saving?

Keywords: venture capital; entrepreneurial finance; real options; term sheets; Clean Technology; Entrepreneurship; Venture Capital;

Citation:

Nanda, Ramana, Robert F. White, and Stephanie Puzio. "Fast Ion Battery." Harvard Business School Case 815-025, September 2014. (Revised March 2015.)