9.1 Initial Capitalization
True Dimensions is currently funded with $30,000 invested by its principals. This funding will support initial direct sales. In August, 1995, True Dimensions will seek $200,000 in exchange for 35% of the common stock and a pro-rata seat on the Board of Directors. We desire an equity infusion in order to permit accelerated growth. The funds are required primarily for working capital needs during the national sales rollout. An investor can expect a 31% five year compounded annual return on their 35% equity stake.
9.2 Financial Projections
Financial projections are detailed in Appendix D. The following chart shows the net income and sales for True Dimensions over the next 5 years.
9.3 Harvest Strategy and Valuation
At the end of year 5, True Dimensions expects sales at roughly $3.6 million, and net income at $358,000. Using the discounted cash flow model shown in Appendix D (page 38), True Dimensions' terminal value in year 5 is expected to be $2.1 million. This assumes a conservative 2% growth rate after we have established national distribution in year 5. Should the inventor or management wish to sell their equity, or should it become necessary to raise capital for in-house manufacturing, the company will evaluate a range of exit scenarios.
|True Dimensions, Inc.|
|Table of Contents||Appendices|
0. Executive Summary|
1. The Company
3. Market Analysis
4. Technology & Operations
5. Customer Interviews
6. Marketing Strategy
8. Risk Analysis
|All information herein is confidential and belongs to True Dimensions, Inc.|