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Problem Solution: Gene One
Gene One is a privately-owned biotech company that has realized incredible growth since its inception in 1996. Gene One entered the biotech industry with groundbreaking gene technology that eradicated disease in tomatoes and potatoes. Since farmers no longer need to use pesticides when growing these plants and consumers are pleased to buy homegrown products untainted by chemicals, the result is a win-win situation which helped Gene One grow to a $400 million company in just eight short years.
Sharply rising stock indices on Wall Street indicate a growing interest in biotechnology, and leadership changes at the Food and Drug Administration are further enhancing investor confidence in the industry (Gene One Scenario, 2008). However, if Gene One expects to remain competitive and to realize further growth, it must raise capital.
Accordingly, at Gene One, the Chief Executive Officer (CEO) and his Board believe that in order to keep pace with demand and realize conservative annual growth targets of 40%, Gene One is going to have to go public within the next three years. By going public with the issuance of an initial public offering (IPO), the company will be able to raise capital which it will use for advertising, marketing, and research and development.
Situation Analysis
Issue and Opportunity Identification
Gene One is at a crossroad in its tenure as a privately-owed biotechnology firm. To continue forward momentum in the industry, Gene One must raise capital for advertising, marketing, and research and development. Don Ruiz, CEO has determined that the best way to raise capital is through the issuance of an IPO. The CEO and the Board of Directors (board) expect to ...