The quest for entrepreneurial growth in a tumultuous Brazil
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2016-09-12
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Prado Junior, Servio Tulio
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This case introduces the concept of entrepreneurial funding and tackles the issue of how startups can find growth amidst economic downturn. Students follow the development of Carrinho em Casa, an entrepreneurial venture that offers a grocery delivery service to its clients in less than two hours. Although it offers a unique service in its marketplace, Carrinho em Casa is having trouble scaling its business due to difficult economic conditions and limited financial flexibility. Nearly a year after its launch, the co-founders of Carrinho em Casa are at a crossroads and remain unsure of how to take their business to the next level. On the one hand, co-founder David is advocating the need for external capital, arguing that obtaining VCbacked funding would provide Carrinho em Casa with the boost it desperately needs. On the other hand, co-founder Ricardo believes bootstrapping is the wiser solution. He insists that Carrinho em Casa should continue to grow organically through its already unit-profitable business, and as a consequence maintain total ownership of the company. The case introduces the concepts of VC funding and bootstrapping and encourages students to explore the opportunities and challenges of these different types of financing. The case allows students to grapple with the strategic and tactical decisions related to funding and pushes them to better understand how such decisions can impact all aspects of the business: sales, profits, management, motivation, incentives and exit opportunities, amongst others. Finally students are encouraged to reflect on the numerous challenges and opportunities related to starting an entrepreneurial venture in emerging markets under difficult economic, political and social conditions.