Artemis images: note to instructors.

The case is positioned to discuss the start-up process for a new business and the issues involved in turning a business idea into a workable plan. Specifically, the case deals with the realities of implementation in the face of changing conditions, lack of finances, and uncertain markets.

This case contains enough information to evaluate the Artemis Images business plan and the business planning process. Students should be able to identify with the dual roles that Chris has tackled: struggling to manage a fledgling business while trying to court investors to obtain much-needed financing.

Key Issues and Discussion Points

A major theme of this case concerns the planning process and managerial issues facing a young woman trying to launch her own company in a changing economy. Key issues and discussion points include:

1. The personal decisions involved in starting a business.

2. The process of launching a new venture.

3. The risks of creating an innovative business model versus imitating an industry standard.

4. The internal and external forces that impact the formation and implementation of a new business.

5. The realities and difficulties of "selling" a business plan to investors.

Potential Audiences and Uses

This case is intended for a business planning course or a course in entrepreneurship or entrepreneurial finance. Students who are engaged in writing their own business plan should find the issues in the case particularly helpful, since the case highlights business-plan essentials and typical pitfalls that entrepreneurs encounter in setting up and seeking financing for fledgling enterprises. Students should also identify with the varying degrees of commitment of the management team and the conflicts among the four founders.

Suggested Teaching Approach

The instructor may want to start the case discussion by asking students whether or not they think there is any hope for Artemis Images. While it is likely that many students will push for persevering despite the company's current difficulties (especially since many students will have accessed the website and found out that Artemis Images is, in fact, operational at this time), some students will see no way out for the company, given the obvious failure of the website in May 2001 and the exit of key players. A discussion about what the company can do to survive its current setback can be a launching pad for an in-depth analysis leading to strategic and operational recommendations.

The following questions may be used to guide a class discussion.

1. Why did Chris start her own company? What did she have to lose? What did she have to gain?

2. Evaluate the Artemis Images management team. Has Chris chosen the fight people? Discuss division of ownership among the four founders.

3. Evaluate the advantages and disadvantages of the Artemis Images business model.

4. List and discuss the internal and external factors that may have impacted Artemis's business plan.

5. How would you assess the value of Artemis Images? Is this company attractive to investors?

6. What challenges does Artemis Images face as it attempts to raise early rounds of capital? What are milestones and what role might they play in Artemis's funding?

7. Discuss possible exit strategies for Artemis Images.

8. (How) Can this company survive?

A "closing" question for students can be "Would you invest in this company?" This can serve to focus students' attention on the financial situation and potential viability--and profitability--of the company.

Suggested Readings

1. Timmons, J.A. (1999). New Venture Creation, 5th ed. Boston: Irwin/McGraw-Hill.

2. Smith, J.K. & Smith, R.L. (2000). Entrepreneurial Finance. New York: Wiley.

3. Keeley, R.H., Cooper, J.M., & Bloomer, G.D. (1998). Business Angels. Boulder: Colorado Capital Alliance.

4. Ruhnka, J.C., Feldman, H.D., & Dean, T.J. (1991). The "Living Dead" Phenomenon in Venture Capital Investment. The Journal of Business Venturing, March.

Related Topics

Depending upon the sophistication of the audience, this case can be used to discuss legal and operational concerns surrounding the formation of a new venture. Specifically, issues such as division of ownership and duties; contractual issues and legal remedies (e.g., for non-compliance); "virtual team" management; and logistics (location constraints). There is enough financial information in the case for a discussion of market projections, pricing, cash flow management, debt and liquidity, and valuation.

Joseph R. Bell is an assistant professor and director of the Entrepreneurship Center at the Monfort College of Business, University of Northern Colorado.

Joan Winn is an associate professor of management at the Daniels College of Business, University of Denver.