Case | HBS Case Collection | September 2016 (Revised November 2016)

Western Technology Investment

by Ramana Nanda, William A. Sahlman and Nicole Keller

Abstract

Based in Portola Valley, California, Western Technology Investment (WTI) specialized in a hybrid form of debt and equity financing for early-stage companies. Like traditional venture capital and private equity firms, WTI raised funds from institutional investors and evaluated deals. However, instead of making initial investments in the form of equity, WTI focused primarily on lending money to start-ups, charging them interest and receiving warrants that could later be converted to stock in the case of a liquidity event. Most initial investments—usually in the range of $3–$5 million—were made in tandem with or following a company’s early rounds of venture capital equity financing. In addition, like more traditional venture capital investors, WTI hoped to participate in follow-on debt and equity investments in its successful portfolio companies.

Keywords: entrepreneurial finance; venture capital; entrepreneurship; finance; Equity; Finance; California;

Citation:

Nanda, Ramana, William A. Sahlman, and Nicole Keller. "Western Technology Investment." Harvard Business School Case 817-019, September 2016. (Revised November 2016.)