4M Technologies: Funding the optical disc revolutions

This is a corporate entrepreneurship and technology management case investigating the financial and strategic dilemmas facing an extremely fast growing company striving to become the leading producer of optical disc integrated manufacturing systems in the world. Built from the ground up in the 90s in Switzerland, the company was still smaller than some of its key global competitors and heavily burdened by the debt it had taken on to establish its position in this high-technology market. To finance such an aggressive growth, the company relied mostly on bank financing and an equally aggressive use of supplier credit and customer prepayments, permitted only by the quality of its business relationships with those parties. But these arrangements had run their course and it was time for the company in the fall of 1999 to put its house in order financially to tackle the operational challenges ahead. The company is thus contemplating an IPO but a number of questions remain unsolved, such as where to list or even whether to list at all. The case is intended for undergraduate, graduate and executive education students to confront the realities of a wildly successful company facing an even more tempting and threatening future growth period. It is a great reminder of the challenges of growth in technology-intensive industries. It is also a great introduction to the new growth-equity markets in Europe, such as Neuer Markt, Easdaq, the Nouveau Marche, NMAX and others, which appeared in the later part of the 90s, offering new channels for the funding of technology companies. The case is accompanied by a CD-ROM based video of 9 minutes illustrating the activities of 4M Technologies and presenting some of the major actors, such as Adel Michael, the company’s founder, CEO and Chairman of the Board. The video is completed with a Powerpoint presentation file outlining the major issues of the case. Finally, the case makes reference to the URLs of major players in the industry.

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