AN ANGEL INVESTOR WITH AN AGENDA

AN ANGEL INVESTOR WITH AN AGENDA

Executive summary

The study has discussed the investment opportunities for angel investors. The angel investor Victor Serna has planned to invest $3 million for Gloria eldercare. In exchange, he claimed a 25% share of the company with an assurance of the opening chain of the eldercare center. Three critical issues, Three lessons, and three best practices have been analyzed in the study to address the relevance of investing in this company.

Three critical issues

Three critical issues for this reading are- the dilemma between taking the initiative to grow the company and not taking actions to improve it, the difficulty between the old business model and the new business model, and the critical issue of maintaining uniformity in all the healthcare centers.

• The dilemma between an initiative to grow the company or not to improve it: Gloria is in difficulty between whether she should enhance the company or should leave trying to build it. The offer from Victor Serna was attractive for Gloria that can help to revive her ailing eldercare centers. The eldercare centers were performing poorly due to a lack of a proper business plan. Moreover, Gloria has faced moral issues in most of her eldercare centers, and she has utterly failed to restructure the entire process. It leads her to considerable confusion over to continue leading the companies or to leave the plan to grow the organization.
• The dilemma between the old business model and the new business model: The dilemma between the old business model and the unique business model. The current franchise model is not performing well in the competitive market as the market share of the company has declined to 1.03% from 2.44%. Thus, Gloria is thinking of adopting the commercial offer provided by Victor. The existing model is leading the company to grow at a slower pace, where most of the other eldercare organizations are running at a steady speed. On the contrary, the new business model offered by Victor ensures the organization to open a chain of eldercare centers across the city which can promote a fast-paced growth for the organization.
• The issue of maintaining uniformity in the organization: Gloria has severely failed to maintain quality and consistency in the services she offers to the clients. Most of the clients of eldercare homes are not satisfied with the services provided by the organization. The staff of Gloria does not maintain the code of conduct of ethical care for all the elderly patients in the care home. It leads Gloria to a moral debacle that can change her mind of continuing the existing services.

Lessons learned

The lessons learned from this reading are as follows:

• Adaptation of situational decision: The early staged start-ups need to adapt situational decisions to make their organization safe from any possible financial and operational debacle. Gloria ha severely faced downfall for not taking a wise and situational decision. The eldercare should have accepted the offer provided by Victor, an angel investor. Gloria could have reacted quickly to the proposal of the opening chain of eldercare home across the city along with financial support. A timely and situational decision could have saved the eldercare organization from its dilemma and ethical issues.
• Developing a situational business plan: A steady business plan must be produced by the start-ups to ensure the blueprint of upcoming business activities. However, Gloria did not have any situational business plan which can support the organization to get financial aid from angel investors. Instead, the eldercare organization was running with an old franchise model that failed to ensure sufficient growth to the company. However, a situational change of business plan could be beneficial for the organization to save it from various critical issues. Moreover, it could be useful for the company to attract the angel investor to provide more financial help along with a situational business plan ensuring fast growth.
• Conducting due diligence: Conducting due diligence should be highly prioritized while dealing with angel investors. Gloria should maintain a persistence that can ensure that the business is in low-risk. However, the company failed to establish any diligence. Instead, the eldercare home witnessed severe issues associated with uniformity and quality practice. The active initiative could have been taken to nullify all the ethical concerns from the organization to make it worthy of funding.

Best practices

Best practices are- making strategic decisions, aiming to improve networking and quality practice. The explanation is as follows:

• Making strategic decisions: Strategic decisions actively controls the debacle of an organization. The strategic choice of accepting the offer from Victor can be useful to revive the company with better approaches reaching to a large number of customers. Victor offered $3 million along with the ownership of 25% of the company’s stake, which can be beneficial for Gloria to restructure its strategy and to redevelop the operational activities of the organization.
• Aiming to improve networking: The best part of accepting the offer of Victor is the scope of expanding the brand network. Víctor offered to open a chain of eldercare centers to increase the networking base.
• Quality practice: Gloria has always preferred to maintain a quality practice in the organization. The brand of maintaining strict performance standards, along with highly engaged holistic care and well-customized services, firmly retained the brand value over the years. The brand value has exaggerated the diligence of the company, which promoted Victor to invest funds and to provide additional support to the eldercare home.