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Abstract

This case can be taught alone or as an epilogue to 'Impact Makers (A): The Newman's Own of Management Consulting' (UVA-F-1797). The case is based on Impact Makers, an IT consulting company headquartered in Richmond, Virginia. The company focus on creating value for a community led to an innovative corporate structure where original founders of the firm hold all voting rights, while the cash flow rights belong to two non-profits, setting the stage for a Newman's Own model of management consulting. The case asks students to evaluate whether a board member should invest in Impact Makers' growth effort. The case opens with Impact Makers seeking up to USD3 million in preferred-equity financing to grow its geographic presence, expand areas of practice, and convert intellectual property into tools that would increase margins and profits in digital health care markets. The protagonist, David Wade, is a rational mainstream investor. Yet he is a strong supporter of the company who had participated in previous company (bridge financing) debt offerings. The material requires students to explore the expected return of the proposed offering and evaluate the implicit and explicit discounts Wade would be making if he invested.

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Abstract

This case can be taught alone or as an epilogue to 'Impact Makers (A): The Newman's Own of Management Consulting' (UVA-F-1797). The case is based on Impact Makers, an IT consulting company headquartered in Richmond, Virginia. The company focus on creating value for a community led to an innovative corporate structure where original founders of the firm hold all voting rights, while the cash flow rights belong to two non-profits, setting the stage for a Newman's Own model of management consulting. The case asks students to evaluate whether a board member should invest in Impact Makers' growth effort. The case opens with Impact Makers seeking up to USD3 million in preferred-equity financing to grow its geographic presence, expand areas of practice, and convert intellectual property into tools that would increase margins and profits in digital health care markets. The protagonist, David Wade, is a rational mainstream investor. Yet he is a strong supporter of the company who had participated in previous company (bridge financing) debt offerings. The material requires students to explore the expected return of the proposed offering and evaluate the implicit and explicit discounts Wade would be making if he invested.

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