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2MBA – The Offer
1.1 Funds Required
A total investment of $1.5 million is sought from an investor who has experience in the beverage appliance manufacturing and/or marketing industries. There will be two tranches –
- The first of $500,000 will be made once the Nestle contract is finalized. This is due to be completed by January 2001. This money will be used to finance the MVU assembly line and initial raw material supply.
- The second tranch of $1 million is due in January 2002. This money will be used to finance the La Barista assembly line, critical raw material supplies, as well as provide working capital.
1.2 Investor Equity
For the $1.5 million investment, the investor will receive a 30% equity stake in 2MBA, Inc. The financial projections forecast an Internal Rate of Return of 93%, providing the investor with a cash return 18 times their original investment at the end of Year 5. If the Board unanimously decides, dividends may be distributed; however, this business plan does not contemplate any dividend payments, only capital gains.
1.3 Management Equity
The Management team have invested US$121,400 (AUD$200,000) in 2MBA, Inc. via the company JAJA Pty. Ltd. in return for a 60% equity share in 2MBA, Inc.
1.4 Inventor Equity and Royalty
The inventor, Mr. Brian Pelerman, has already invested nearly $1.5 million into developing and commercializing the MVU and La Barista products. In return for granting exclusive marketing and distribution rights in the USA for a period of 10 years (options may also been granted for Mexico, Canada and South America), his company MVU Pty. Ltd. will be granted a 10% equity stake in 2MBA, Inc. and receive royalty payments for each unit sold. Royalty payments are calculated at 5% of sales revenue, with a base minimum in the first five years of 1,500 MVU’s and 5,000 La Barista units. If these numbers are not achieved the contract may be renegotiated at the request of MVU Pty Ltd.
1.5 Board of Director’s Composition
The Board will be comprised as follows:
- Investor (2 positions)
- Management Team (2 positions)
- Inventor (1 position)
- Independent Chairperson (1 position)
1.6 Exit Mechanisms
2MBA, Inc. will be positioned for an IPO or trade sale in year 6 of operations. An earnings multiple of ten has been factored into the valuation calculations and reflects a conservative rate for this industry.
1.7 Investor Claw Back Strategy
If the Management team fails to achieve at least 90% of the key performance criteria contained in this business plan (subject to negotiation including a mechanism for measuring the investor’s, directors performance and operational support) over the five years, the investor will be entitled to claw back from the Management team, at no cost, 20% of the management team’s equity, therefore raising the investor’s holding to 50%.
|Table of Contents||Appendices|
|0. Executive Summary
1. The Offer
2. The Products
3. The Organization
4. Strategic Analysis
5. Key Strategic Issues
6. Marketing Plan
7. Production Plan
8. Organization Plan
9. Financial Plan
|A. Internal Environment Analysis
B. Critical Risks and Problems
C. SWOT Analysis
E. Production Layout
F. Action Plan
G. Team Member Details
H. Reference Sources
I. Financial Analysis Worksheets
|All information herein is confidential and belongs to 2MBA, Inc.|