Valuation
However, it should be noted that many of these companies offering similar services were large corporations to begin with, like at&T, and thus had more financial capital to draw upon for research and development of new technology, thus making it easier to offer expanded services and increase their value as a company than Space Data.
Determining how much money is needed
Unfortunately, the need for new money always seemed around the corner for the Space Data Corporation. When more funds were required for regional testing, most capital venture funds were wary. The financial needs of Space Data coalesced with a market downturn and "the market for paging and messaging firms had collapsed over the past year, with most having plunged by more than 90% from their peaks (MacCormack 2002:11). Investment banks were not interested, except for one, provided the company's plan met with FCC approval, including "patent protection, a formal contract with the weather service, and a contract with a carrier"(MacCormack 2002:11).
Deal structure
Space Data was thus forced to relinquish some of its hands-on control over its administration because the technology it was using was growing increasingly expensive to use and the market was growing softer, in terms of available capital. As it accepted more capital from outside the family and the business, more entities gained input into the endeavor.
Marketing strategy and tactics for a new venture
The problem with the technology the two entrepreneurs selected was that it was moving extremely fast. Their original plan was to start small and relatively cheap, after the initial period of testing, and then expand. However, because the testing and funding took longer than expected, technology had grown more expensive. Paging was obsolete and rapidly being discontinued. Observed Jerry: "The bankers are pushing us straight into voice, which sounds great but scares the hell out of the engineering team. And out of the blue we now have telemetry as a new opportunity, but it's certainly not the business that we dreamed about when we founded Space Data nearly five years ago. One thing is for...
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