Business Angels?
Sterling-Bond
market potential.
Small donations, minimal risk, all funding into escrow until minimum
threshold is crossed (£40,000).
Sponsorship converted to shares in proportion to donations after threshold
is crossed.
Also, business angel opportunity as follows:-
The basic idea for the project and the opportunity, without giving the game
away, is as follows:-
1. A new invention/innovation.
2. Patent applied for (in other words they've staked their claim).
3. Very new - this is only week four in the process.
4. Moving very fast, to seize the market as quickly as possible.
5. Willing to discuss upto 40% stake in the company.
6. Looking for an honest, reputable and committed partner, one who can
either:-
i. Contribute substantially in the way of technical or marketing
knowledge for the product's worldwide success.
ii. Become a silent partner, confident that the product will work and
that suitable security and guarantees can be put in place.
7. Do not want / will not accept to give away more shares without
substantial contractual protection, as had a bad experience with VC
investors in another project where 60% was controlled outside, not enough
money was invested and the VC eventually liquidated and asset-stripped the
earlier company (entirely different business) leaving founders in the cold.
8. Market potential for domestic and small enterprise territories, worldwide
as follows:-
i. Assume 0.1% of domestic (household) market in UK = 20,000 units
ii. Assume 1% of Small Business market in UK = 60,000 units
iii. Assume ten major comparable territories worldwide = 20,000 +
60,000 x 10 = 800,000 units
iv. Assume average retail price of approx. £500.00/unit
v. World market retail sales potential = £400,000,000
vi. Gross margin TBA.
9. Management team:
i. Former Technical Director/IT consultant.
ii. Former accountant now freelance financial consultant.
iii. Others TBA.
10. Funding requirement, estimates:-
i. Seed through development: upto £500,000
ii. Development through to production and launch: balance -
£4,500,000
iii. Total estimated requirement: £5,000,000 in tranches as
required.
11. Progress to-date:
i. Patent applied for on a basic design concept.
ii. Marketing and PR campaign underway.
iii. National TV have made enquiries following local press exposure
and will feature working models once complete.
iv. Local fund-raising and sponsorship campaign now underway as
quicker alternative to prolonged VC negotiations.
v. Local companies have contributed 20,000 flyers for promotion
campaign to wealthier districts of the country.
vi. Volunteers currently assembling e-mail shot list from Yellow
Pages. To spam local industry for sponsors.
vii. One pre-sales order already received from the public (although
this may just be someone testing the offer).
12. Likely investor exit strategy if desired:
i. Through buy-back in 3-5 years from internal funding.
ii. Through smaller scale stock flotation at similar timescale to
fund exit and/or expansion.
COMMENT
As you know the usual process is to develop your idea, undertake an
agonising process of raising funds then develop the product, undertake
another agonising process for your second-round funding, then launch it on
the world. In the UK this is even more arduous as there is such a
reluctance to invest in new innovation. This is why a more aggressive and
innovative programme has been adopted - to raise the profile and the funding
as quickly as possible, undertake development, whet the public's appetite
and have the product ready for sale in the shortest possible time.
Regards
Michael Bond
Director, Sterling-Bond