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  • May 2020 (Revised December 2022)
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Soofa: Displaying the Right Path?

By: Jeffrey J. Bussgang, Amy Klopfenstein and Amram Migdal
  • Format:Print
  • | Language:English
  • | Pages:17
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Abstract

In November 2019, Sandra Richter, co-founder and CEO of Soofa, a network of advertising-supported digital bulletin boards, must decide between two different fundraising and expansion plans for her company. One plan entails raising $15 million in a Series A round and pursuing an aggressive expansion strategy, while the other represents a more modest $3 million raise to bring the company to operating profitability. Richter had developed the $15 million plan with an executive introduced to her by her venture capital board members with extensive fundraising and startup experience; however, after months of pitching to investors, the aggressive expansion plan had failed to produce a term sheet. Richter must decide whether the rapid expansion is the right course of action for the company as she begins to question whether her business could realistically meet the plan’s projections even if she could secure the financing to fund it. Meanwhile, Soofa’s capital was rapidly dwindling. Richter must raise another round of capital by early 2020, or will be forced to lay off the majority of her staff and close her operations. Should she continue pursuing the aggressive expansion plan, pivot to the more modest plan based on operating profitability, or attempt to pursue both plans simultaneously? And how should she navigate the growing tension on her board given the company’s struggles?

Keywords

Business Ventures; Business Model; Business Plan; Business Startups; Entrepreneurship; Decision Making; Decisions; Ethics; Geography; Geopolitical Units; Finance; Investment; Markets; Market Entry and Exit; Demand and Consumers; Network Effects; Media; Society; Urban Development; Sustainable Cities; Information Technology; Information Infrastructure; Digital Platforms; Strategy; Business Strategy; Expansion; Relationships; Partners and Partnerships; Capital; Venture Capital; Advertising Industry; Technology Industry; Media and Broadcasting Industry; North and Central America; United States; Massachusetts; Cambridge

Citation

Bussgang, Jeffrey J., Amy Klopfenstein, and Amram Migdal. "Soofa: Displaying the Right Path?" Harvard Business School Case 820-098, May 2020. (Revised December 2022.)
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About The Author

Jeffrey J. Bussgang

Entrepreneurial Management
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Related Work

    • February 2021
    • Faculty Research

    Soofa: Displaying the Right Path?

    By: Jeffrey J. Bussgang and Amy Klopfenstein
    • May 2020 (Revised December 2022)
    • Faculty Research

    Soofa: Displaying the Right Path?

    By: Jeffrey J. Bussgang, Amy Klopfenstein and Amram Migdal
Related Work
  • Soofa: Displaying the Right Path? By: Jeffrey J. Bussgang and Amy Klopfenstein
  • Soofa: Displaying the Right Path? By: Jeffrey J. Bussgang, Amy Klopfenstein and Amram Migdal
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