You are the manager of a venture capital fund. You have 4 companies that your fund could invest in and they are pitching to you to obtain funding. For each company decide if you will fund or not fund and why.You can also make your funding contingent on something that is not clear if you specify the information that is needed.

1. Automatic Payment Platform

Automatic Payment Platform (APP) provides a way for people to pay for purchases (minimum $200) over future monthly payments without any interest. They have been successful with bootstrapping and now they want to grow faster by finding additional capital. They are offering you two ways to invest: (i) a loan that can be converted into equity at the discretion of the lender or (ii) outright equity. Consider the COVID-19 pandemic in determining your decision on whether to invest or not invest and if so, which financial vehicle.

2. Super Testing

Super Testing provides testing for patients of medical doctors. They have designed portable blood testing trucks that can be deployed near doctor's offices to immediately meet patient needs. Doctors receive remuneration in the form of processing fees for patients that they refer. The business has been doing well during the COVID-19 pandemic as patients can be processed outdoors in compliance with social distancing restrictions. The doctors' fees are under scrutiny as other local clinics are complaining. Super Testing is offering revenue backed loans where the company borrows money and then pays back the money including interest where the interest paid is calculated as 10% of the profit of each truck. Each truck is separately financed and each loan is tied to one truck, so the profits are dependent on each truck's success. They are asking you to fund 10 new trucks for a total of $2.5 million. Do you invest in Super Testing?

3. Sound Haven

Sound Haven has developed wearable bone conduction speakers that enable a wearer to listen to music or phone calls while still being able to hear surrounding sounds so it is much safer while walking, jogging or even driving. The technology has been developed in-house and they want to start production to manufacture their wearable speakers after getting initial funding commitments via a crowd funding website. They are asking for $10 million to invest in manufacturing facilities in exchange for a 50% equity stake in the business. They have no historical revenue and base their valuation on having commitments from 10,000 people in the crowdfunding campaign, each willing to pay $399 for the speakers.

4. Energy Audit Company

Energy Audit Company (EAC) has a core business where they go into residential homes and then look for ways to save money, including installing solar panels, adding insulation and moving to more efficient heating and lighting. The company then finances any purchases with the savings in the electricity bill that the consumer is forecast to receive. They recently established their own separate installation subsidiary companies that can do the work that they recommend if needed. They are interested in raising $10 million to expand their business nationwide and be able to quickly respond with installations and work. They are offering 25% equity in the company based on a company valuation of $40 million and they have revenues of $9 million last year.$4 million of the revenue was from their core business, with costs of $1.5 million. The installation part of the company had revenues of $5 million and costs of $4.7 million.