Abduction Productions Ltd.
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. Young Entrepreneur - Paul McTaggart
Author Brian McKenzie
When Paul McTaggart graduated from university in 1996, two of his instructors predicted he would become a millionaire by the time he turned 30.
Although Paul's academic record was about the middle of the class, his record as a budding entrepreneur was truly amazing. Paul started his first business when he was in grade 9. By the time he graduated from high school, he had built this venture: Student Lawn and Yard Maintenance to the point where he had 4 employees. Paul's skill as a salesman and a promoter drove the growth of Student Lawn and Yard Maintenance, but it was the operation systems Paul created for the business on his person computer that drove the success of the venture.
Paul's goal, when he entered the University of Victoria in 1992, was to learn about the use of computer in business. In his first year, he fit as many Computer Science courses into his schedule as he could. That summer, he got a job marketing computer hardware and software. However, the most important thing Paul discovered that year was the internet. Through the university computer labs, Paul discovered that he could send and receive e-mail around the world. More important, he discovered surfing the web using the new program, Mosaic, and Paul realized it was about to change the way the internet worked.
When Paul entered the Commerce program, he knew his future in business would be intimately tied to the internet. He set out to learn everything he could about networks and got a job that summer working as a Computer Network Assistant at the University of Victoria. Throughout the final two years of his Commerce degree, Paul developed his skill as a network specialist, and closely followed the development of the internet. When Netscape was launched in 1994, Paul knew e-commerce was about to be born, and that he wanted to be a part of it.
Paul McTaggart's research lead him to discover that 54% of all North Americans believe in the existence of extra-terrestrials. He felt this group could form a huge client base for the paradigm of marketing he foresaw for the internet. With four talented friends, Paul created a website (http://www.abductee.net) designed to capture the interest of people who want to take part in the mystery of extra-terrestrial life. The web site offers a full line of products such as tee shirts, polo shirts, ball caps, wool hats, jewellery, models, posters and books.
This case outlines the scenario of Paul's struggle to raise financing for Abduction Productions. The case will be of interest to all young entrepreneurs who are starting ventures and of particular interest to those who are starting knowledge based ventures.
Paul and his friends capitalized the company with their own sweat equity, and Paul's savings. However the cost of building a top quality web site, and developing a line of merchandise made them realize they must have more capital to continue with the venture. The case describes the process of applying for a $15,000 loan from the Canadian Youth Business Foundation, a $30,000 loan from BDC, and a $25,000 line of credit from several chartered banks. The case also details Paul's attempts to find 'angel' financing, and his decision about how much equity he felt he could give up in exchange for start-up capital.