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In June 2001, the owners of this small rapidly-growing sports promotion firm are assessing the financing implications of their growth plans. Threshold Sports organizes professional cycling races, and holds major race franchises for several large U.S. cities. It seeks to expand quickly the number of events that it manages, eventually to build professional cycling in the U.S. to a level consistent with Europe. The growth outlook creates a financing need of $500,000. The case presents three financing alternatives: debt, common equity, and convertible preferred stock. The task for the student is to assess the alternatives and make a recommendation. The choice hinges importantly on the estimated value of the firm.This case was prepared to serve several objectives: ·Explore the attributes of classic financing alternatives: debt, common equity, and convertible preferred stock. This comparison enlivens the standard textbook discussion of financing alternatives, and underscores important distinguishing features. ·Illuminate the special role of convertible preferred stock in financing new ventures. This is a standard investment vehicle used by angel investors and venture capitalists who finance fledgling firms. This case permits a consideration of why this form of financing may dominate the others. ·Exercise valuation skills for small rapidly-growing firms, and skills in the communication of value to investors. ·Apply concepts about capital structure design, and the classic FRICTO framework, in the resolution of the corporate financing problem.The case is readily adaptable to course settings as diverse as introductory finance, advanced corporate finance, and entrepreneurial finance. Furthermore, the case is well-suited to standard classroom discussion, team presentations, and individual papers. Students identify readily with cycling, sports promotion, and the entrepreneurial setting of the case.