Performance of Tenex Greenhouse Ventures - Essay Example

Venture capital business is very much essential for today’s aspiring entrepreneurs for giving lives to their innovative ideas and insights. This business acts as a catalyst for any innovative innovations and risk-associated entrepreneurship. It creates job opportunities, stimulates the economic growth of a country or global economic growth and recovery. The venture capital industry has been undergoing in substantial transition. It is termed rightsizing. The leading global players in this industry have been shrinking due to poor return on investment and a decrease of potential new entrepreneurship to ask capital for the venture. This industry enjoyed a substantial growth rate in pre dot com bubble era. The transition has been underway in quite slow motion due to frequent economic downturns in global economy. Still, the venture capital firms with a wide market presence have been enjoying good returns (Pearce & Haemming, 2012, p.1).

The greenhouse was established at the time of the global tech bubble. It missed out on the pre-era growth phase of this industry. The company business model is single industry-specific which is the healthcare industry. Though the business operates with a narrow customer segment, it had comparatively better opportunity and growth potentiality. The company achieved successful completion of $12 million fundraising within one and a half years of establishment. Therefore, the fundraising potential of the company is very strong as it did within an era of economic slowdown in the global economy due to the tech bubble. Therefore, by comparing the business trend of the company with industry, it can be said the company had developed a strong partner network to operate actively and to serve its target segment.

The case describes the position of the company in the early stage of the 20th century and the first two years of its establishment. The company has very quickly developed a potential partner network to raise funds to be ready to serve its target segment. It achieved more than its initial goal which developed considering the economic condition. But as a venture specialist for a specific and steady industry of healthcare instrument business, it was able to show quite an attractive and noticeable business model to its investment network partners. The company developed its short goals by considering environmental factors to make a strong foothold in the venture capital industry.

The company has set targets or business goals with determination. It desired to less prediction of cash availability, accept funding after in-depth scrutiny of Target Company with high consideration of crunch downs. The company also concentrated on fewer deals with comparatively stronger competition from premier deals. It can reduce the future risk of return on lower investment. It also expected few financing after initial funding to be ready next potential funding.

Though the business operates with high potential and determination, it poses both pros and cons to other businesses participating with Tenex Greenhouse. An important pro is that the company developed a strong hybrid fund Tenex Greenhouse Investor by partnering with Tenex and it was an integrated mix of venture capital and angle investment fund. Therefore, it became an intellectual portfolio of companies. A major con is that the business model of it which was an integrated mix of venture capital and angle investor. It received repose from the potential clients that they are not aware of this type of business idea.

Dr. Samuelson should pursue investment from Greenhouse as it will provide a complete package of financial as well as a strategic solution to the company. CardioFib only needs to share some stake of the company to Greenhouse for this intellectual property. On the other side, Ruderman also should proceed with this offer of funding to CardioFB because the business model and the product are quite innovative and EBITDA increased with a huge growth rate from 2002 to 2006. The economy of scale was achieved more by the company within this period. Overall, this deal should be accepted by both sides.