SERVERVAULT: RELIABLE, SECURE, AND WICKED FAST

Advance Assignment to Students 1. What is a firms burn rate? How might this rate influence a firms strategy for financing its growth? 2. Please prepare a forecast of ServerVaults statement of cash flows for the 30 months beginning with July 2000 and ending in December 2002. Note that case Exhibit 4 gives you the statement of cash flows for the past six months. Case Exhibit 5 gives the forecasts of facilities and servers. The associated computer spreadsheet file considers the impact on ServerVaults cash balance of variations in these areas. 3. Using your forecasting model, please determine the following: a. Cash investment in July 2000. How long will a cash investment of as little as $5 million or as much as $15 million permit the firm to have a positive cash balance? b. Operating assumptions that you may deem to be important. What operating assumptions prove to be the key drivers of ServerVaults burn rate? 4. Based on your modeling and sensitivity analysis, how important is growth in facilities and number of servers to ServerVaults cash requirements? What is it about ServerVaults business model that dictates this? 5. On what should Patrick Sweeney and Jim Zinn especially focus in managing the growth of their firm?

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