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A corporate start-up does so well that a year later, the start-up offers to buy back the equity from its parent. Cabletron Corporation provided Ellacoya $3 million in first round financing in return for a 45% equity stake because they were convinced that their employee, Kurt Dobbins had the right combination of technical insights and leadership characteristics to start a successful business. Dobbins put together a team for his company some of whom were Cabletron employees and the results were dramatic. Even though the firm of about 24 engineers had still not sold a product, the venture capitalists showed great interest, sensing the great potential of the company. However, a major condition for providing second round financing for Ellacoya was a buyback from Cabletron. The founder now begins negotiations with his former employer. The teaching note includes strategies for case presentation, key concepts, solutions to the assignment questions in the case, and suggestions for the most effective ways to work this case into a course.