Disrupting Justice at RightNow: Rich or King

Shikhar  Ghosh; Amir Reza Rezvani

Case | HBS Case Collection | September 2020

Disrupting Justice at RightNow: Rich or King

by Shikhar Ghosh and Amir Reza Rezvani

Abstract

The case examines issues such as cascading problems within the organization, changing founder roles, founder success criteria, as well as company exit consideration. In 2017, Dr. Torben Antretter, a former competitive tennis player and academic researcher, founded RightNow with his two co-founders. RightNow was set out to provide consumers with “Justice-as-a-Service” by purchasing their legal claims that they would not pursue otherwise. Three years after inception and after overcoming numerous consecutive hurdles, the company was entering its next stage of its lifecycle. The selection of an investor type would be instrumental to the next few years of the company and the lives of the founders. With success, considerations around company exit and defining success criteria became inevitable. Different investors types had different investment criteria with regards to target returns, growth ambitions, decision rights, and ownership stakes. Antretter and his co-founders had to decide, jointly as well as individually, what they want to do. Discussions among the founding team showed that they needed to develop an ‘exit strategy’ in the same way that they had developed a growth strategy. When should they consider an exit and take some chips off the table? Was it more important to become rich or to remain kings of their kingdom?

Keywords: exit; Startup; financing; founders; Entrepreneurship; Law; Venture Capital; Success; Financing and Loans; Business Growth and Maturation; Strategy; Legal Services Industry; Germany;

Language: English

Format: Print

18 pages

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Citation:

Ghosh, Shikhar, and Amir Reza Rezvani. "Disrupting Justice at RightNow: Rich or King." Harvard Business School Case 821-028, September 2020.

The case examines the focus of an early stage company, and how an unexpected external incidence can threaten or void the business model. It encompasses issues such as defining and pivoting a business model, organizational requirements for a pivot, investor relations, disruptive business models, as well as business conduct in continental Europe. In 2017, Dr. Torben Antretter, a former competitive tennis player and academic researcher, founded RightNow with his two co-founders. RightNow was set out to provide consumers with “Justice-as-a-Service” by purchasing their legal claims that they would not pursue otherwise. Just one year after its inception, the company had closed a €25 million financing to increase its market share and leverage further growth opportunities. Upon closing of this financing round, matters took a sudden and unexpected turn when the National Supreme Court announced a ruling that airlines were no longer required to refund flight tickets. This decision wiped out RightNow’s profit margins. Antretter and his co-founders had to decide what they should do with the business. How should the founders approach investors? Should they quit and walk away from their entrepreneurial dream or try to reinvent the business with a different focus? What would be the strategy going forward?

Case | HBS Case Collection | August 2019 (Revised July 2020)

Unifying Divisions: Loop's Mission to Preserve the Planet

Shikhar Ghosh and Marilyn Morgan Westner

The case focuses on the initial startup team and Founders’ agreements. In March 2018, Sanchali Pal proposed renegotiating the informal founders’ agreement and equity split she and her co-founders had drafted the previous spring. They had been working together for over a year to solve one of the most complex and urgent problems of our time—global warming. Their company—a technology platform that enabled users to track and improve their carbon footprints on their smartphones in real time—had grown from their individual passion to combat the looming climate crisis.
In the past year, their approach had been validated multiple times at different national clean energy competitions. But beneath external success, internal frictions threatened the team. Differing expectations and overlapping roles and responsibilities sparked frustrations between the co-founders and Pal began spending a considerable amount of time mediating their disagreements instead of focusing on the business. The case ends as the co-founders are meeting to discuss 3 core issues: 1) How to re-divide equity—what changes should they make to their original agreement? 2) How to establish clear roles, titles, and decision-making rights so that they could function effectively as a team. 3) How to allocate spending cash. Each grappled with key questions: Did they still trust one another? Did they feel respected? Could they renegotiate an agreement in a way that everyone could accept?

Keywords: Founders' agreements; Business Startups; Climate Change; Conflict Management;

Citation:

Ghosh, Shikhar, and Marilyn Morgan Westner. "Unifying Divisions: Loop's Mission to Preserve the Planet." Harvard Business School Case 820-032, August 2019. (Revised July 2020.) View Details

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Disrupting Justice at RightNow: Rich or King

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