Case study on funding issues in business:

Case Study: GreenCycle
GreenCycle is a startup that aims to reduce electronic waste by recycling old electronics. The company was founded by two MBA graduates, Alex and Ben, who were passionate about sustainability.

*Background*
Alex and Ben started GreenCycle with an initial investment of $100,000, which they raised from friends and family. They set up a small recycling facility and began collecting electronic waste from local households and businesses.

*Growth and Funding Issues*
As GreenCycle grew, Alex and Ben faced funding issues. They needed to expand their facility, hire more staff, and invest in new equipment to increase their recycling capacity. However, they were struggling to raise additional funds.

They approached several venture capital firms, but were rejected due to the high risk associated with the electronic waste recycling industry. They also tried to secure a bank loan, but were denied due to lack of collateral.

*Funding Options*
Alex and Ben were considering the following funding options:

1. *Equity Crowdfunding*: They could raise funds from a large number of people, typically in exchange for equity.
2. *Angel Investors*: They could approach angel investors who invest in startups in exchange for equity.
3. *Government Grants*: They could apply for government grants that support sustainable businesses.
4. *Asset-Based Financing*: They could use their assets, such as equipment or property, as collateral to secure a loan.

*Questions for Discussion*
1. What are the pros and cons of each funding option for GreenCycle?
2. Which funding option would you recommend for GreenCycle and why?
3. How can Alex and Ben mitigate the risks associated with each funding option?
4. What are the implications of each funding option on GreenCycle’s ownership structure and control?

*Teaching Notes*
This case study can be used to teach MBA students about the different funding options available to businesses, the pros and cons of each option, and how to evaluate and choose the best funding option for a business.

The case study can also be used to discuss the following topics:

– Funding strategies for startups and small businesses
– Risk management and mitigation strategies
– Ownership structure and control
– Sustainability and social responsibility in business

*Assignment*
Ask students to work in groups to evaluate the funding options for GreenCycle and recommend the best option. They should provide a written report that includes:

– An analysis of the pros and cons of each funding option
– An evaluation of the risks associated with each funding option
– A recommendation for the best funding option and a justification for their choice

The report should be 3-5 pages long and include any relevant appendices or exhibits.