DART of Barbara Arnerson CaseDART of Barbara Arnerson CaseTeam Pangaea, Wednesday Oct 31,2007

DecisionDecision

Barbara Arnerson should join InterWeb.Barbara Arnerson should join InterWeb.

Factors taken into considerationFactors taken into consideration

Stock Option offer of InterWeb ($225,000) is twice in value than BioGene Stock Option offer of InterWeb ($225,000) is twice in value than BioGene ($115,200) in 2010($115,200) in 2010

Barbara has 0.051% of ownership of InterWeb as opposed to BioGene where Barbara has 0.051% of ownership of InterWeb as opposed to BioGene where she owns only 0.026%she owns only 0.026%

Barbara will have a steep learning curve in a start-up Barbara will have a steep learning curve in a start-up

Potential Ownership at BioGene and Potential Ownership at BioGene and InterWebInterWeb

There are currently There are currently 23,030,30323,030,303 shares outstanding at shares outstanding at BioGene. BioGene.

There are currently There are currently 118,600,000118,600,000 shares outstanding at shares outstanding at InterWeb.InterWeb.

Barbara would own Barbara would own 0.026%0.026% of BioGene with her offer of BioGene with her offer of 6,000 shares. of 6,000 shares.

Barbara would own Barbara would own 0.051%0.051% of InterWeb with her offer of InterWeb with her offer of 60,000 shares.of 60,000 shares.

Comparison of stock option offersComparison of stock option offers Option 1: BioGene

In four years, when the options are fully vested, Barbara will hold 6,000 shares of BioGene.

At a value of $19.20 per share, her stock will be worth $115,000.

Option 2: InterWeb

In four years, when the options are fully vested, Barbara will hold 60,000 shares of InterWeb.

At the typical value of $12.50 per share at IPO, these shares will be worth $750,000.

Taking into consideration the 75% risk factor, the expected value of her shares is $750,000*25%=$187,500.

Other factors to considerOther factors to consider

FactorFactor InterWebInterWeb BioGeneBioGene

Learning ProcessLearning Process Working with a group of Working with a group of scientists that have scientists that have product specific product specific knowledgeknowledge

Working under Rasha Working under Rasha Motani who has Motani who has knowledge in areas knowledge in areas which interest Barbarawhich interest Barbara

Career SecurityCareer Security Risky since company Risky since company might not reach IPO but might not reach IPO but greater chance for greater chance for personal success in personal success in smaller companysmaller company

Stable source of Stable source of income and job income and job security but she may security but she may feel like small cog in feel like small cog in big machinebig machine

Social LifeSocial Life Unpredictable hours of a Unpredictable hours of a start-up may have a start-up may have a negative impact on her negative impact on her personal lifepersonal life

More stable working More stable working hours will give her time hours will give her time to do other things with to do other things with her lifeher life

Reality TestReality TestRiskRisk Mitigation StrategyMitigation Strategy Contingency Contingency

PlanPlanSeveritySeverity

Long hours at work Long hours at work keep her away from keep her away from family and friends family and friends

and cause emotional and cause emotional stressstress

Ask CEO for Ask CEO for predetermined amount of predetermined amount of vacation time each monthvacation time each month

Negotiate Negotiate with CEO for with CEO for leaveleave

MediumMedium

Lower income from Lower income from working in a startup working in a startup prevents her from prevents her from doing some things she doing some things she had planned for after had planned for after collegecollege

Talk to other employeesTalk to other employees

and get their input on and get their input on

how to relaxhow to relax

Change her Change her initial plan to initial plan to fit into the fit into the reality of reality of working in working in startupstartup

LowLow

Product flops pre-IPO Product flops pre-IPO and her job security is and her job security is at riskat risk

Maintain contact with Maintain contact with other potential employers other potential employers who would be willing to who would be willing to hire her if things get out of hire her if things get out of controlcontrol

Leave the Leave the company company early before it early before it closes downcloses down

HighHigh