Questions:1.What is the nature of the opportunity? What are the strengths and weaknesses of the companys business model?2.Why has TixToGo had trouble gaining momentum?3.What should Lu Cordova do first? What next?4.How would you value TixToGo? From whom and under what terms should the company raise funding? How much should they raise?5.What general lessons about entrepreneurship and venture financing can you draw from this case? Be specific in your answers.
Answer:1.On seeing the lack of web services for ticket booking and also unexplored niche markets requesting for seat reservation of venues with less than 200 seats, TixToGo designed a self-service site to individuals and organizations to facilitate collection of registration fees, ticket purchases, donations or sign-ups for activities over the Internet, believing that the dynamics of the Internet would allow strong growth potential and lucrative returns.
The strengths of this companys business model are on its market potential and competitive advantages.
Responding to event organization, the potential target markets were enormously huge as portrayed in Exhibit 6, addressing to an around $120 millions of revenue. Also, there were not existing rivals competing in the market. This would give them a first mover advantage.
Nevertheless, the company is weak at its management level. Without a top-notch management team at the beginning, they failed to obtain sufficient venture capitalist or bridge fund to sustain their business. Moreover, they are unable to improve the site infrastructure and deal with the legal and administration work. These pitfalls would limit the expansion of the companys services and seriously affect the scalability, profitability and sustainability.
2. Due to an over-$200k deficit in year 1998 and 1999, TixTiGo, at the time of decision, failed to sustain its business with the current cash or consider further expansion. There are several reasons: (1) the...