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Case
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Reference no. 154-C07A-P
Prize winner
Subject category: Entrepreneurship
Published by:
Babson College (2007)
Version:
November 2009
Length:
17 pages
Data source:
Field research

Abstract

Victor Grillo, was deeply distressed by what was happening in Advanced Results Marketing, the company he had founded. After a promising beginning, ARM had been battered by a succession of problems: (1) fraud had been discovered in the accounting department; (2) some key accounts had been lost; (3) the company''s bank line of credit had been frozen; and (4) bills were piling up faster than they could be paid. Worse, he had lost the confidence of his investors. Over his objections, unhappy investors on the board had brought in an outsider CEO to straighten things out and to give ARM the professional image that would allow it to fetch a higher price when they put it up for sale - which they were anxious to do. That new CEO was shouldering Victor out of important decisions and isolating him from his company ''family''. An intense personal feud between the two men had ensued. Now, after a month of sleepless nights, Victor Grillo knew he had to make a move. He couldn''t allow this situation to continue. He had to fight back or get out. The case should be used toward the end of the managing growth course. ARM (A) is used to illustrate how an entrepreneurial company can get into trouble, and how a founder and investors respond to and manage under adversity.

Topics

Basement bootstrapping; Business model innovation; The direct response TV (DRTV) advertising industry; Private equity investors; Difficult transition from founder to outside professional management; Entrepreneur / investor conflict; Hiring ''wired to win'' employees; Motivating employees; Financial crisis; Accounting fraud; Bank line of credit; Growth

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