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© 2007 by
Baylor University
Note to Instructors:
E T&P Radha Jalan and
ElectroChem, Inc.:
Energy for a
Clean Planet
Frances M. Amatucci
Susan Coleman
The ElectroChem, Inc. case focuses on two key issues. First, as a relatively small firm
in an emerging high-tech industry, the company faced a number of financial challenges.
As the case points out, many firms in the fuel cell industry depended heavily on govern-
ment contracts as a source of funding. Thus, revenues were highly unpredictable and most
firms in the industry were unprofitable. They constantly “hustled” for grants and contracts,
as well as for other external sources of financing, including equity investors. The case
illustrates the danger of taking on angel investors who may have a different vision for the
company than the founding entrepreneur.
A second issue deals with the challenges that Radha faced as a woman entrepreneur
in a male-dominated industry. Although well-educated and hardworking, Radha did not
Please send correspondence to: Frances M. Amatucci, tel.: (412) 749-3785, e-mail: amatuccif@comcast.net
This case can be used in undergraduate and graduate courses in the areas of entre-
preneurship or entrepreneurial finance, small business management, or strategic manage-
ment of technology and innovation. The case is somewhat unique because its protagonist
is a minority woman entrepreneur.
Instructors could use the case to illustrate the financial challenges faced by an
entrepreneur in an emerging industry. The financial statements could be used to calculate
ratios that will indicate that ElectroChem experienced difficulties in the areas of liquidity,
asset management, debt management, and profitability. Further, sales levels were some-
what erratic given the firm’s heavy dependence of government contracts. Students may
wish to discuss how attractive the industry really is in light of its unstable revenues and
negative profitability.
Instructors could also use this case to discuss possible sources of funding for such a
firm. As a relatively small firm with an uncertain future, ElectroChem was not really a
candidate for the venture capital, which could have provided much needed external
capital. Alternatively, Radha sought out external investors with almost disastrous results.
Students can discuss the options that Radha actually had for funding as well as steps that
she could have taken to avoid the problems that developed with her equity investors.
The case provides some interesting information on the fuel cell industry, its develop-
ment and potential. It highlights the important role played by government agencies in
fostering the growth of the industry due to its potential impacts on national defense,
security, and the general good. Instructors could use the case to initiate a discussion of the
opportunities and risks associated with entering an industry having tremendous growth
potential yet with an unclear timeline for general acceptance and commercial viability.
1. What are the competitive forces in the fuel cell industry? Identify the potential oppor-
tunities and risks as reflected in the driving forces for fuel cell technology.
2. Why did Radha take over the management of ElectroChem? What challenges did she
face?
3. What does a SWOT analysis reveal about ElectroChem’s position within the fuel cell
industry?
4. What does your analysis of case Tables 3 and 4 reveal about ElectroChem’s financial
condition?
5. What steps did Radha take to turn around ElectroChem? How has Radha positioned
ElectroChem strategically in the marketplace for fuel cell technology so far?
6. How could Radha have avoided the incident with Bill West and Peter Clinton? What
lessons can be learned for future interaction with equity investors? What other sources
of external funding could Radha have considered?
7. Evaluate Radha’s performance during the 10 years she has led ElectroChem. Develop
a set of recommendations for her to strategically position ElectroChem for the future.
Suggested Readings
Amatucci, F.M. and Sohl, J.E. (2004). Women entrepreneurs securing business angel financing: Tales from the
field. Venture Capital: An International Journal of Entrepreneurial Finance, 6(2/3), 181–196.
Brush, C., Carter, N.M., Gatewood, E., Greene, P.G., & Hart, M.M. (2004). Clearing the hurdles: Women
building high-growth businesses. Upper Saddle River, NJ: FT Prentice Hall.
Coleman, S. (2002). Constraints faced by women small business owners: Evidence from the data. Journal of
Developmental Entrepreneurship, 7(2), 151–174.
Eisenmann, T. & Willis, R. M. (2004). Fuel cells: The hydrogen revolution? Harvard Business School case
#9-804-144. Boston: Harvard Business School Publishing.
Leach, J.C. & Melicher, R.W. (2003). Entrepreneurial finance. Mason, OH: Thomson South Western.
Frances M. Amatucci is an adjunct professor at the Huizenga School of Business and Entrepreneurship at
Nova Southeastern University.