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Ravenna Tech.

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Ravenna Technologies Inc.

Founded:- 1994

Founders:- Chris Theodora (Chairman)

Chris Vitale ( Senior Scientist) CEO:- Juan O Gorman

President of Marketing:- Galla Placida.

It is a small, start up biotech company. It was a genomics-

platform company to exploit a solid phase DNA chemistry.

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Business Strategy of Ravenna

Build a strong and rapid growing business byoffering genomic-research products.

Commercialize the product through business

alliances with of each market. Advancing their technology.

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Market opportunities

Market opportunities fell in to two categories.1. Biomedical Research

I. Microarray fabrication

II. Purification of DNA before high-throughtput sequencing

III. PCR typing to detect viruses2. Clinical Diagnostics

I. Detecting bacteria in platelets.

II. Identified specific bacterial pathogens in positive bloodculture test.

Ravenna had five products in development whichare expected to commercialize in market over thethree years through corporate alliances.

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Competition Faced

No competitor in array (supplying attachmentsolutions to genomic-screening companies) market.

Only two competitor in PCR-typing area:-

Chiron Diagnostics Roche Molecular Systems

Several competitors in the DNA sample purification.

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Challenges

1) The loan extension included an agreement by theexisting venture investors to provide the company with$ 3m in additional financing.

2) Ravenna had 5 products in development, which itexpected to commercialize over the next 3 years throughcorporate alliances.

3) It generated $54,000 revenue in 1999 and was projecting$1,30,000 revenue for 2000, $3.9M in 2001 and $180 Mrevenue in 2004.

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Bridge loan

Total amount raised- $2.5m.

Culberston August- $ 1.25m

Maturity time was Dec.2000

Interest rate was 15.44% Loan will be repaid out of the amount raised from

venture financing round.

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Problem for Culberston August

Whether to extend loan duration or not?

Biotech products take long time to give return and itis associated by high risk so VCs are diverting

towards IT sector.

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The Decision

Mr. Bridge should extent loan duration because:-

The company is expecting to launch three products in nextthree years.

Ariva is dominating player in Array market.

In addition to interest company had received the warrantsfrom Ariva, it can raise their yield in future.

If company earn the revenue $59m at 2003 this would give58% return to Culbertson August on extended bridge loan.