The PE ratio has been computed for taking the average of the PE ratios of the National Sartoga comparable firms since they are performing well. Seth took a deep breath, quit his job at Calvert Mutual Funds, and started brewing batches of tea in his kitchen.
Outsiders could be hired by Goldman to form the strategic management team of Honest Tea. The pre money and the post money valuation for Honest Tea have been performed using the VC method of valuation.
Angel investors would also have more connections in the financing market unlike the current sources of financiers. Lastly, if the company goes ahead for raising the required financing through the venture capital firms then, the company can raise a much higher financing amount to invest in the expansion of the business.
When Seth heard the name, the simmering idea began to boil—it was the perfect name for a brand that would strive to create honest relationships with its customers, suppliers and Case honest tea environment.
At this level of external financing, the company would be able to maintain control over the company. What is a fair pre-money and post-money valuation of Honest Tea?
These growth rates have been assumed based on the projected growth of the company and the expansion of the business operations. Five weeks after taking the plunge, he brought thermoses of tea and a recycled bottle with a mock-up label to Fresh Fields Whole Foods Market. If the company has multiple investors at this growth stage then it can be resolved by hiring an external agent that would be responsible for solving the investor relationships.
An active person, Seth was continually in search of the perfect drink to quench his thirst after a run, a game of basketball, or between grad school classes.
The company would lose control at this level of financing. Lastly, the company can prevent the dilution of the earning per share by issuing warrants and retaining the right of buying those warrants at a later stage.
Barry had just returned from India where he had been analyzing the tea industry for a case study. Barry had even come up with a name to describe a bottled tea that was made with real tea leaves—Honest Tea. Yet, Seth found most drinks either too sweet or too tasteless. As they found themselves doing the same beverage mixing after the run, Seth knew then that if he was going to quench his thirst for good, he would have to create the drink himself.
A number of assumptions have been made to perform the valuation of the company. In this way, Goldman would be able to direct the path of the company and retain the control of the company.
The drawback for seeking the required financing from the venture capital firms is that they would demand a significant stake in the company and the control of the current owners might be lost. The most feasible source to raise the required financing would be through the angel investors because then the company would be able to retain more control of the company and acquire real board of directors.This case examines the decisions of Seth Goldman and Barry Nalebuff, founders of Honest Tea.
Honest Tea is a start-up in the ready-to-drink tea market. Goldman and Nalebuff must craft an expansion and financing strategy. Product Description All Honest Tea organic iced tea beverages are real-brewed with Fair. Honest Tea Case Solution,Honest Tea Case Analysis, Honest Tea Case Study Solution, Honest Tea Case Solution General environment of the tea beverage industry: It is expected that Tea beverage industry is a continuously growing industry an.
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Honest Tea Case Study. Honest tea used to offer a "Peach White Tea", that tasted better and had less sugar. Since the Coca Cola company bought the Honest Tea company, they have started messing with the ingredients and adding tons of sugar.
The case should have only contained the half and half bottles. Published 23 days ago. Jimmy Ziggs. out of 5 /5(1K).Download