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Ivey Publishing
Invest or Take: A Venture Capitalist's Ethical Dilemma
Product Number:
9B16M057
Publication Date:
05/30/2016
Revised Date:
05/27/2016
Length:
10 pages (8 pages of text)
Product Type:
Case (Gen Exp)
Source:
Ivey
In May 2015, a managing partner in an Australian venture capital firm faced a major dilemma. As one of five partners, he held the deciding vote on whether his firm, KTN Capital, would take an entrepreneur’s idea for a solar-powered water filter and build a new company around it, or instead, invest in the entrepreneur’s company. The venture capital firm would not be doing anything illegal by taking the entrepreneur’s idea because the entrepreneur had not properly protected his intellectual property through patents, but the decision-maker was struggling with the ethics of that choice. To further complicate the situation, the entrepreneur was very difficult to deal with, and the investment firm was facing pressure from the fund’s investors to find investments that would yield big returns. The managing partner had many business and ethical considerations to factor into his decision, and it seemed there would be no easy choice.
Learning Objective:
This case can be used in courses in entrepreneurship, ethics, and management, in classes that involve evaluating ethical decision-making. The case demonstrates an example of the ethical grey areas in business, especially concerning private investments, where there are few rules and regulations. Through this case, students will explore the following concepts:

  • The ethical grey areas that often exist in investment decisions
  • The difference between legal and ethical
  • The extraneous factors that can weigh in on ethical decisions
  • The approaches used to evaluate the ethical decision-making process
  • The measures that entrepreneurs should take to protect their ideas
Issues:
Disciplines:
General Management/Strategy,  Entrepreneurship,  International
Industries:
Finance and Insurance
Setting:
Australia, Small, 2015
Intended Audience:
Undergraduate/MBA
Price:
$4.25 CAD / $4.25 USD Printed Copy
$3.75 CAD / $3.75 USD Permissions
$3.75 CAD / $3.75 USD Digital Download
Associated Materials
Translations: Simplified Chinese (10 pages)
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