“Helping You Push the Horizon”
FEASIBILITY DECISION: INFEASIBLE
HORIZON INVESTMENTS LLC.
Business Feasibility Study
Group 7
Daniel Youse
Josh Mann
Drexel University
Executive Summary
The race to the moon inspired a generation and gave this country an identity and a universal belief in
our supremacy over the world. American’s love to be inspired, they love to feel like they are ahead of
the rest of the world and in recent years this feeling of supremacy has been lost. Other countries are
closing in and America is losing its luster. The desire for excellence is still there, recently where the
government has given up, commercial companies have stepped in. SpaceX recently completed the first
commercial space flight to International Space Station and companies like Planetary Resources have
unveiled ambitious plans to harvest asteroids for resources. Americans love to be inspired and the time
for the fever to catch is close again.
Horizon Investments would be a limited liability corporation owned and operated by the members of
group seven. This investment company would be a unique blend of venture capital and hedge fund. The
target consumer would be atypical investors, young adults and other members of the society that
normally don’t invest. We target these investors not with promises of major returns but with the idea
that they will help “push the horizon of technology”. Utilizing a simplified online investment platform we
will attempt to make first time investors smoothly transition into having a portfolio. Customized weekly
newsletters that focus on what new technological innovations the investor has helped fund. These will
help people feel like they are contributing to something larger then themselves. In the long term these
investments wouldn’t be donations to a company, the investors would maintain a share of Horizon
Investment fund that loaned the money. As the company grows so would the funds’ return on the
original investment and so would the investors’ return on their contribution to the fund. Another selling
point of the funds will be the chance to help fund the next Facebook, the next IBM, or the next
Microsoft. The fund approach allows investors to pull their resources and broaden their investments in
emerging technologies.
The industry we are approaching is a broad one with literally hundreds of firms involved in both venture
capital and investments. This mean it would be difficult for us to stand out if we were targeting the
same investors. Our targeting of young adults will be unique in the investment market and our use of
technology to inspire our investors will also be a unique approach to that market. The 20 to 34 year old
demographic doesn’t contain the most money but it is broad in numbers. We will look to exploit a large
volume of investors over a few wealthier investors.
Our products will start out as limited; we will only offer three funds, two with specific focuses and one
broad technology fund. The three starting funds will be Horizon Technology, Horizon Space, and
Horizon Energy. Our primary means of income will be advisory fees for managing the funds and
transaction fees for moving around shares, including an early termination fee. We will need a small
business loan to get the business off the ground. The major issue is the critical mass of fund value. If
the funds are too small they don’t have enough investment capital to spread around. With too little
diversity the fund will become very risky and could cave with a single investment not panning out.
Financially we will need a small business loan to get started. The issue again is enough capital to start
the funds. Banks and other financial institutions require collateral to give small business loans and no
institution will loan us the millions required to get the funds to critical value with our physical collateral.
A bank isn’t knowingly going to loan us money to make risky investments. We could get a loan for the
actual startup cost devoid of the investment capital.
The idea is to capitalize on the idealism of young adults and impress on them that collectively they could
make a difference in their future. People are always interested in the later technology from Google
Glasses to mining asteroids, the market is there to take advantage of but the capital required for startup
may be too great.
Concept of Business
Products
Our products will be investment funds that target new technological fields. We will allow investors that
want to get involved in progressing technology a chance to help newer innovations get off the ground.
All of our funds will be organized to focus on specific market areas.
Examples of funds include:

Horizon Technology – A broad fund that targets emerging technologies

Horizon Energy – focuses on the latest energy companies or companies developing technology
in the energy market

Horizon Connection – focuses on companies developing new modes of mass communication

Horizon Space – focuses on companies pushing into space or developing supporting
technologies

Horizon Longevity – focuses on biomedical technologies that advance the human life span

Horizon Nano – focuses on companies supporting Nano technologies and carbon Nano tubes

Horizon Quarks – focuses on companies utilizing particle physics in developing technologies
Customer Base
Our targeted investor is young adults or first time investors. We will attempt to inspire them to help
make a difference and believe a younger audience will be more receptive to this message. Young adults
have grown up in a world of constant changes in technology and have seen entrepreneurs like Bill Gates
or Mark Zuckerberg amass a fortune using innovation. This target audience is more likely to be idealistic
and less concerned about immediate return on investment. Also our chosen web based distribution
method will work better with this audience.
Distribution
Horizon Investments will be a web based investment firm. We will attempt to develop the most
streamlined investment process possible, utilizing a minimalist approach to the entire website.
Currently attempting to sign up for any web based investment company can be a long task. Our limited
offering and focus away from instant returns will actually aid us in cutting down on the complexity of the
interface. In addition to being able to check the current value of their fund and the current fund
holdings, investors will receive a weekly newsletter that illustrates what new advancements in
technology they help fund.
Growth
The main point of growth will not be immediately recognized. Transfer fees and advisory fees charged
to the individual funds will cover daily expenses but the true profit will come when a technology we’ve
invested in finally hits the market. The concept is much like venture capital in the respect that we invest
early on in the technology and when/if it develops into a product we reap large rewards. Normally
investing in a small startup technology can be a risky venture, we allow investors to mitigate their risk
and increase their impact by pooling the money and diversifying the portfolio. The issue with this type
of growth is it is unpredictable but the high risk is necessary for the higher reward.
Income
The company will collect fees based on a percentage of the funds value for advisory fees while managing
that fund. We will also collect fees for transfers of money and early withdrawal fees. Withdrawal fees
will be necessary to diminish “day trading” type behavior. Investing in our funds might be a compulsory
act driven by a moment of inspiration and we want mitigate to investors having the same but opposite
compulsion to withdraw. As the funds grow in size we will collect larger amounts in advisory fees. In
addition we will also have supplied a large portion of the startup capital to the fund and can sell or
transfer our shares as capital is needed. These will be high risk and high reward investments so the goal
will be to remove large portions of our original investment as time goes on so the fate of the company
isn’t tied directly to one fund.
Industry Analysis
Porter’s 5 forces Matrix
Force
Rivalry Among
Companies
Bargaining Power of
Suppliers
Bargaining Power of
Buyers
Threat of New Entrants
Threat of Substitute
Products/Services
Importance
2
Threat to Industry
3
Weighted Score
6
4
5
20
5
3
15
3
4
5
4
15
16
Total
72
Rivalry Among Companies
There is constant competition in both the venture capital and hedge fund markets and this competition
normally centers on getting the most investors. Our business will not focus on the same clients that the
majority of investment firms target. The venture capital market is the opposite; it normally focuses
around competition for the best ideas. While most startups have to pitch their idea to venture capital
firms in the hopes of getting money, some startups are lucky enough to have venture capitalist fight
over them. The Rivalry between venture capitalist for a great idea is more likely to affect our business
model.
Bargaining Power of Suppliers
Since we don’t have suppliers in the normal sense we applied this to the companies we are investing in.
If new startups refuse our capital because it requires giving up a portion of their business we will not be
able to follow our intended business model. We have to demonstrate that we are the best source of
startup capital for newer technology firms.
Bargaining Power of Buyers
Obviously having people invest in the funds is paramount. Initially the funds will not generate value by
themselves because the investments will be in high risk areas. The fund might actually lose value if
substantial investments don’t work out. To this end keeping new investors coming in is very important.
Threat of New Entrants
We are targeting a previously ignored customer base but each customer isn’t going to contribute a
substantial amount. Our business model depends on the volume of investors. New entrants into the
market will diminish our market share and steal investors away.
Threat of Substitute Services
The threat of substitute services is another major threat because if established investment firms start
offing similar investment funds then we will lose clients to companies with better reputations.
SWOT
As a fund specializing in technology we have a job to inform new investees about the great
opportunities they may have. We put our focus into technology investments targeting young adults and
new investees. We are not an attractive industry compared to others. We must make our investment
appealing to the public in a down economy like today. We need to create the biggest returns possible
for our customers and be able to keep them in a position to keep us investing.
Strengths-Being less distracted in an industry is going to be our key to success. As other hedge funds
have lost sight of their goals and fell behind in the race we will continue to be on top of each and every
new change. Keeping our operations in order by maintaining proper data will save us from the
headaches of facing other hedge funds in the industry. Our data marketing will allow us to analyze any
and all opportunities that arise and be able to take advantage of them before the competition
capitalizes. We will have a tight leash on internal media and file downloads keeping track of all
information we obtain to prevent the spread of any incorrect data.
Weaknesses- We will face big challenges within the firm that will tend to keep us from focusing on our
goals. As technology changes at a rapid rate, we must have investors on top of each and every move.
Staying ahead and keeping data well organized and making an opportunistic move can and will most
likely be our biggest weakness. One cannot be on top of each and every subject, leading the industry.
Being in a recession, we also have some internal factors that can cause us to crash. In rough times,
employees have been known to steal information within and sell it to competitors.
Opportunity- As a rapid growing industry we have the opportunity to capitalize while the economy is in
a recession. Businesses tend to increase in innovative technology during these harsh times to change the
downward slope of stock prices. We will take advantage of every change that is made and keep our
focus on new investees and younger adults looking to buy into discretionary investments.
Threats- In such a broad industry, we have threats all around us causing us to be just another pea in
the pod. Being in a recession since 2008, the eyes are on investors and the world is going to have
someone to blame. Hackers have stepped up their game and have become even better at stealing our
information. Competitors with better risk management tools are going to keep us on our toes. We must
be the best in the market with portfolio pricing and counterpart risk.
Competitor Analysis
Hedge funds in the new innovative technology industry such as DigitalGlobe, which provide commercial
earth imagery products and solutions, reported net purchase of 1.3 million shares in 2012. This is about
3.69% of their total float of 35.20M shares. First quarter earnings showed $87 million, which was up 12%
over last year. The firm has been increasingly buying and increasing their EPS.
First Solar, which manufactures and sells solar modules using a thin film semiconductor technology.
They reported a $449 million loss on revenue of $497.9 million. They had their second ever loss and
ended the year 2011 by firing over 30% of their workforce.
Competitors are taking new technology mainly using energy and natural resources to create large gains.
Over all they have been successful, but at any given time they may hit a downfall only to rise back to the
top. Competitors are consistently buying out others and taking a new direction in the industry. With
such a broad industry, change is almost certain and any firm must be willing to make a turn. New to this
market, we will focus on innovative technologies to idealistic young adults and help them invest in
something that may brighten their future. Most technologies are targeted at the higher class which
mean large investments, larger risk, but also bigger gains. We take a big risk entering this industry, but
by taking advantage of our competitors’ weaknesses and standing out we will move forward. We will be
young and diligent just like our investees and keep them informed on new information as it comes in
from research and data polls. We will invest only in technology that will bring the larger of returns and
provide the most for our firm.
The other side of our competition will be Venture Capitalist. We aid at being the preferred source of
capital for innovative companies. This market is broad with multiple sources of capital for new
companies. The Venture Capital market is mainly controlled by wealthier investors and our main
problem will be getting enough name recognition that new and innovative companies will come to us as
a source of capital investment.
Market Analysis
Target Market
Our targeted market for investors will be young adults and first time investors. The U.S. Bureau of Labor
Statistics has the following information on the income of our target demographic as of the first quarter
of 2012.
Age (Years)
20 to 24
25 to 34
Number of
Workers
7,548,000
24,017,000
Median
Weekly
Yearly
Earnings Earnings
$463 $24,076
$702 $36,504
As you would expect the total median weekly earnings of our target audience is rather low compared to
older demographics. However there is a substantial number of working adults in these age ranges that
we believe have been largely ignored by the investment community. If we extrapolate the total amount
of money earned in a year by these demographics and assume a 1% investment rate we get an available
market size of $10.5 Billion dollars.
Age (Years)
20 to 24
25 to 34
Number of
Workers
7,548,000
24,017,000
Median
Weekly
Yearly
Earnings Earnings
Total money
1% investment
$463 $24,076 $181,725,648,000 $1,817,256,480
$702 $36,504 $876,716,568,000 $8,767,165,680
Total: $10,584,422,160
This target market isn’t normally inclined to investment but is predisposed to compulsive buying. Our
focus of inspiration will attempt to pull them into the investment community. Our board approach
won’t focus on a specific education level or profession we will instead use mass marketing toward the
target age group in general. Since we will be a web based investment firm, the majority of our focus will
be on consumers in this demographic that use the internet. We will not accept foreign investments in
the beginning to simplify the tax reporting of the entire system.
Our other target market will be startup companies that have innovative technologies they are looking to
develop and bring to market. It is important we target these companies to expand our investments and
see higher returns if the technology impacts the market. The U.S. Bureau of Labor Statistics estimated a
7.2% growth in semiconductor and other electronic component manufacturing and a 14.5 % growth in
computer and peripheral equipment manufacturing from 2010-2020. These industries will be a large
part of our investments and the data supports future expansion of the markets.
Entry Strategies
After the initial creation of the company we will spend two months setting up the office, computer
server, installing investment software and setting up the website. After this period we will develop our
initial offering and begin investing our startup capital. Over the next two months we will have
developed our funds’ investments and when we have balanced our portfolio we will go live with the
website. We will also begin a heavy advertising campaign on technology blogs, News sources, and other
websites visited by youth. We will also place a few ads in magazines that share our target demographic
like Maximum, Cosmopolitan and Popular Mechanics. We will also eliminate the initial transaction fees
for the first 10,000 customers. We estimate it will still take about 3.5 years’ worth of advertising and
word of mouth for the company to truly penetrate our target audience.
Product Development
Funds
As stated earlier Horizon investments will offer a range of funds targeting specific technology centers.
The mix of the funds will be 50% developed companies that are working on new technologies and 50%
new companies developing their first products. For investments in developed companies shares will be
acquired through a broker at market value and the value of the investment maintained like any other
normal investment. Investment in new companies will work slightly different. Our firm is part hedge
fund and part Venture Capital we will approach new companies (or after our reputation is established
they will approach us) work out an agreement for the investment and how much of the company the
fund will retain. Normally the Venture Capital market is contained to wealthier investors; our funds will
allow average and new investors to pull their money to join in.
Our initial offering will include the following funds and the newer companies we are likely to invest in:
Horizon Technology

NanoWatt - http://www.nanowattdesign.com/ - a company developing new ultra low
power integrated circuits

Sensatex Inc - a Company focused on development of smart textile systems to
collect physiological signals. Could help doctors and weight loss enthusiasts
monitor body functions.

Lightning Motorcycles - http://www.lightningmotorcycle.com/ - developing the
world’s fastest electronic motorcycle.

Stirling Project - http://volodesigns-sterlingproject.blogspot.com/ - Developing a
highly efficient Stirling engine that can use multiple fuel source to develop
energy.

Ovonyx, Inc – http://www.ovonyx.com/ - a company developing new
semiconductor memory technology that has faster write and erase speeds the
conventional flash memory.
Horizon Energy

Soluz - http://www.soluzusa.com/ - a Firm developing a commercializing Micro
Power using solar PVs in developing countries

BetaBatt - http://www.betabatt.com/ - Developing reliable battery
replacements using patented 3D energy conversion architecture.

Nanosolar - http://www.nanosolar.com/ - building cost-efficient solar panels
Horizon Space

Sierra Nevada Corporation - http://www.spacedev.com/ - A Corporation that
develops high performance components and systems to be utilized in space.

SpaceX - http://www.spacex.com/ - A company that recently sent a rocket to
the International Space Station and had also lined up contracts with satellite
companies to deliver them to space.

Planetary Resources - http://www.planetaryresources.com/ - A company
developing technology with the long term goal of mining near Earth asteroids
for minerials
In addition to the companies listed above the funds would also invest in stable companies with a proven
track record of innovation. Some of these companies would include Boeing, Lockheed Martin, Dow, and
IBM. These companies would represent the stabilizing force for the funds’ assets. As stated earlier the
mix of risk to stability will be maintained around 50/50. This allows for the risky investments in new
companies without jeopardizing the entire funds’ assets. It also keeps with the funds objectives of
expanding technology since most of the large firms invest heavily in research and development.
The three funds listed above will be the first for Horizon to offer. Future funds will also include Horizon
Connection, Horizon Longevity, Horizon Nano, and Horizon Quarks. These funds will be developed as
Horizon amasses capital to expand. By limiting our initial offering we ensure we can maximize the focus
of our capital so the fund can have an impact on the companies it invests in.
Complications
A major complication to this set up is getting the companies involved. They have to be willing to allow
outside investments with the expectation of future returns. As discussed in the market analysis the
world of Venture Capital is diverse and getting companies to choose it as the solution to their capital
problem could be difficult in the beginning. Once the fund has established a reputation companies will
be more open to the support but there will be a period of slow starting.
Another complication, and probably the most damaging, is the critical mass of the fund value required
to be effective. If the fund is too small the advisory fees won’t support the company and the funds
won’t be able to offer sufficient capital to start ups. Without enough capital to start the fund will
stagnate and not draw in additional investors. This is a major issue with the target audience of the funds
and the high volume, low amount investments. This short coming will be discussed further in the
finance section.
Ideas for future
Horizon’s goal is the expansion of human technology in many fields and in support of that Horizon will
also target patents in the future. After the funds have established themselves in the industry another
tactic we would employ is patent swaps and buying industry patents. By asking companies that want
capital sign an agreement that allows other companies to use some of their patents (at a fair use price)
Horizon will build a bank of patents available to all of its companies. This will spur cooperation between
the firms Horizon has invested in and lead to more innovation. Furthermore, Horizon will also explore
the possibility of buying patents that will aid development in key industries and offer them at a low
licensing fee. Horizon will not be directly involved in the industry and will offer the patent to any
company it has investments in. This will reduce the restrictive nature of patents and turn a profit for the
fund. Companies will be willing to add their patents to the swap because it expands the patent they
have access to using. Since Horizon will have investments in all firms involved we will benefit from any
new developments.
Finances
Key Assumptions
In order to estimate the financial position of Horizon Investments several key assumptions had to be
made.

Advisory Fee Rate of 5%

Fee per Trade of $6.97 (Based on analysis online in next section)

Initial growth in capital from investors of 5% per year for the first 3.5 years

Future capital increase rates per year from investors after 3.5 in the following table
Fund Name
Horizon Technology
Horizon Energy
Horizon Space
Capital
increase
rate
40%
48%
35%
These rates were decided on by estimating the target markets interest in each area of
technology. The raise in energy prices has been a major concern for many in recent years so it is
natural to assume there will be major interest in creating alternate means of energy
development.

Fund value growth rate of 2% per year for the first 3.5 years

Future fund growth rates per year in the following table
Fund Name
Horizon Technology
Horizon Energy
Horizon Space
Value
increase
rate
7.00%
2.00%
0.50%
Returns on these high risk investments are difficult to forecast. We used conservative estimates
for the growth rate of each fund because several investments might actually lose value
offsetting some of the gains.

Initial Fund Capital of $1M per fund *This will be discus in the conclusion
Split of Finances
The financial position of Horizon investments is difficult to estimate because of the overwhelming issue
of startup capital for fund value. To better understand the finance of the company we will approach
them with two different sets of financial records. First we will show what the company’s finances will
look like assuming an investment of $3 million dollars from an outside source. The problem with
defining this source is that a bank will not loan the money without collateral and venture capitalist
aren’t going to help fund a company that will eventually directly compete with them. This means the
required $3 million dollars will have to come from a private investor in the company. At this time we
have been unable to identify such an investor. We will offer the financial records assuming that such an
investor could eventually be identified. Second we will offer the example of $100,000 of investment
capital. This represents the maximum amount of money the members of group seven could gather
without suffering financial ruin.
With $3 million from outside investor
Projected Fund Investments
As with most companies Horizon will go through a period of slow growth at the start. We estimate that
during this time we can increase the investments in the fund by 5% per year. Below is an estimate
growth in total invested capital. This growth will stem from new investors finding our website and
investing money. As our reputation grows so too will the new capital invested.
Original Capital Investment
The Original capital investment is set at $1 million per fund. This is a critical number for the company to
be realizing an income by 2016. A breakdown of this is contained on the Pro Forma Income Statement.
Funds total Invested Capital ( IN MILLIONS)
Initial Investment Period 5% growth
Example Funds
Horizon Technology
Horizon Energy
Horizon Space
Total
Orignal Capital Investment
2012
$1.00
$1.00
$1.00
$3.00
$3
2013
$1.05
$1.05
$1.05
$3.15
2014
$1.10
$1.10
$1.10
$3.31
2015
$1.16
$1.16
$1.16
$3.47
2016
$1.62
$1.71
$1.56
$4.90
2017
$2.27
$2.54
$2.11
$6.91
2018
2019
2020
$3.18 $4.45 $6.23
$3.75 $5.55 $8.22
$2.85 $3.85 $5.19
$9.78 $13.85 $19.64
Initial Rate (4 Years)
5%
Est. Growth
2021
Rate
$8.72
40.00%
$12.17
48.00%
$7.01
35.00%
$27.89
123.00%
Projected Fund Investments
Capital Invested In MILLIONS
$450.00
$400.00
$350.00
$300.00
$250.00
Horizon Technology
$200.00
Horizon Energy
$150.00
Horizon Space
$100.00
$50.00
$0.00
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Project Net Fund Value
Including the estimated increase in capital growth and using the estimate growth rate for the companies
listed in the Key Assumptions we have forecasted the value for our funds.
Estimated Net Fund Value In Millions
Initial Investment Period 5% growth
Example Funds
Horizon Technology
Horizon Energy
Horizon Space
Total
Original Capital Investment
2012
$1.02
2013
$1.07
2014
$1.12
2015
$1.18
2016
$1.73
$1.02
$1.02
$3.06
$3.00
$1.07
$1.07
$3.21
$1.12
$1.12
$3.37
$1.18
$1.18
$3.54
$1.75
$1.57
$5.05
2017
$2.43
2018
$3.40
2019
$4.76
2020
$6.66
Growth Rate
(4 Years)
2%
Est. Growth
2021
Rate
$9.33
7.00%
$2.59 $3.83 $5.67 $8.38 $12.41
$2.12 $2.86 $3.86 $5.22 $7.04
$7.13 $10.09 $14.29 $20.26 $28.78
2.00%
0.50%
9.50%
Estimated Net Fund Value
Fund Value IN MILLIONS
$450.00
$400.00
$350.00
$300.00
$250.00
Horizon Technology
$200.00
Horizon Energy
$150.00
$100.00
$50.00
$0.00
Horizon Space
Cash Needs Assessment
Advisory fees are based off of 5% of the total fund value and will be charged to the fund directly.
Transactions fees are based on an escalation of transactions that coincides with investment of more
capital. In addition the more clients using the funds the more moving of money will take place.
Financing will include a $250,000 small business loan from National Penn Bank. Current rates are
around 7.5% for the term of 4 years. This will cover the need startup capital for the actual company but
not the need capital to get the funds running, which will be discussed in the conclusion.
Horizon Investments LLC
Cash Budget
Cash Balance, Beginning
Add Receipts
Advisory Fees
Transaction Fees
Total Receipts:
Total Cash Available:
Less Disbursements:
Direct Labor
Rent
Advertising
Insurance
Utilities
Office Equipment
Computer Software
Computer Hardware
Total Disbursements
Excess(deficiency) of Cash
Available Over Disbursements
Financing:
Borrowings
Repayments
Interest
Total Financing
Cash Balance, Ending
Year
2013
2014
$146,002.50
$128,406.38
2015
$119,261.06
$2,091.50
$153,000.00
$155,091.50
$155,091.50
$20,915.00
$160,650.00
$181,565.00
$327,567.50
$21,333.30
$168,682.50
$190,015.80
$318,422.18
$21,759.97
$177,116.63
$198,876.59
$318,137.65
$160,640.00
$18,000.00
$6,500.00
$1,500.00
$5,640.00
$5,709.00
$53,900.00
$7,200.00
$259,089.00
$160,640.00
$18,000.00
$6,500.00
$1,500.00
$5,640.00
$192,280.00
$160,640.00
$18,000.00
$6,500.00
$1,500.00
$5,640.00
$192,280.00
$160,640.00
$18,000.00
$6,500.00
$1,500.00
$5,640.00
$192,280.00
2012
$0.00
($103,997.50)
$250,000.00
$250,000.00
$146,002.50
$135,287.50
($6,044.73)
($836.39)
($6,881.12)
$128,406.38
$126,142.18
($6,044.73)
($836.39)
($6,881.12)
$119,261.06
$125,857.65
($6,044.73)
($836.39)
($6,881.12)
$118,976.53
Pro Forma Income Statement
Our Pro Forma Income Statement is done for the next 5.5 years. It is estimated that we will not release
a positive income until 2016. Depreciation of Office Equipment is calculated using the straight line
method over a period of seven years. Salaries are $50,000 per employee including the pay roll tax of
$9,840 per employee. A breakdown of Startup Costs and employee taxes are in the following section.
Horizon Investments LLC
2012
Net Revenue
Traction Fees
Advisory Fees
Total Revenue
Operating Expenses
Adverising
Insurance
Depreciation Office Equipment
Purchase of Office Equipment
Computer Software
Salaries
Total Operating Expenses
General Expenses
Utilites
Telephone and internet
Web Hosting
Rent
Payroll Taxes
Total General Expenses
Other Expenses
Loan Interest
Total Revenue
Total Expenses
Earnings before Taxes
Taxes
Net Income
2013
2014
2015
2016
2017
$2,091.50
$153,000.00
$155,091.50
$20,915.00
$160,650.00
$181,565.00
$21,333.30
$168,682.50
$190,015.80
$21,759.97
$177,116.63
$198,876.59
$30,681.55
$252,614.03
$283,295.59
$43,323.37
$356,723.33
$400,046.70
$6,500.00
$1,500.00
$0.00
$13,160.00
$51,400.00
$160,640.00
$233,200.00
$6,500.00
$1,500.00
$1,880.00
$0.00
$0.00
$160,640.00
$170,520.00
$6,500.00
$1,500.00
$1,880.00
$0.00
$0.00
$160,640.00
$170,520.00
$6,500.00
$1,500.00
$1,880.00
$0.00
$0.00
$160,640.00
$170,520.00
$6,500.00
$1,500.00
$1,880.00
$0.00
$0.00
$160,640.00
$170,520.00
$6,500.00
$1,500.00
$1,880.00
$0.00
$0.00
$160,640.00
$170,520.00
$5,640.00
$1,920.00
$96.00
$18,000.00
$39,360.00
$65,016.00
$5,640.00
$1,920.00
$96.00
$18,000.00
$39,360.00
$65,016.00
$5,640.00
$1,920.00
$96.00
$18,000.00
$39,360.00
$65,016.00
$5,640.00
$1,920.00
$96.00
$18,000.00
$39,360.00
$65,016.00
$5,640.00
$1,920.00
$96.00
$18,000.00
$39,360.00
$65,016.00
$5,640.00
$1,920.00
$96.00
$18,000.00
$39,360.00
$65,016.00
($6,881.12)
($6,881.12)
$283,295.59
$228,654.88
$54,640.71
$0.00
$54,640.71
$400,046.70
$228,654.88
$171,391.82
$0.00
$171,391.82
$0.00
$155,091.50
$298,216.00
($143,124.50)
$0.00
($143,124.50)
($6,881.12)
($6,881.12)
($6,881.12)
$181,565.00
$228,654.88
($47,089.88)
$0.00
($47,089.88)
$190,015.80
$228,654.88
($38,639.08)
$0.00
($38,639.08)
$198,876.59
$228,654.88
($29,778.29)
$0.00
($29,778.29)
With $100,000 from group members
*All descriptions above still apply the only change is the startup capital for the funds
Projected Fund Investments (Change in Scale)
Funds total Invested Capital ( IN THOUSANDS)
Initial Investment Period 5% growth
Example Funds
Horizon Technology
Horizon Energy
Horizon Space
Total
Original Capital Investment
2012
$33.33
$33.33
$33.33
$100.00
$100
2013
$35.00
$35.00
$35.00
$105.00
2014
$36.75
$36.75
$36.75
$110.25
2015
$38.59
$38.59
$38.59
$115.76
2016
$54.02
$57.11
$52.09
$163.23
2017
2018
$75.63 $105.88
$84.52 $125.09
$70.33 $94.94
$230.48 $325.92
2019
$148.24
$185.14
$128.17
$461.54
2020
$207.53
$274.00
$173.03
$654.56
Initial Rate (4 Years)
5%
Est. Growth
2021
Rate
$290.55
40.00%
$405.52
48.00%
$233.59
35.00%
$929.66
123.00%
Capital Invested In Thousands
Projected Fund Investments
$500.00
$400.00
$300.00
Horizon Technology
$200.00
Horizon Energy
Horizon Space
$100.00
$0.00
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Project Net Fund Value (Change in Scale)
2012
$34.00
2013
$35.70
2014
$37.49
2015
$39.36
2016
$57.80
2017
2018
$80.93 $113.30
Growth Rate
(4 Years)
2%
Est. Growth
2019
2020
2021
Rate
$158.61 $222.06 $310.88
7.00%
$34.00
$34.00
$102.00
$100.00
$35.70
$35.70
$107.10
$37.49
$37.49
$112.46
$39.36
$39.36
$118.08
$58.25
$52.35
$168.41
$86.21 $127.59
$70.68 $95.41
$237.82 $336.30
$188.84 $279.48 $413.63
$128.81 $173.89 $234.76
$476.26 $675.44 $959.27
Estimated Net Fund Value ( IN THOUSANDS)
Initial Investment Period 5% growth
Example Funds
Horizon Technology
Horizon Energy
Horizon Space
Total
Original Capital Investment
2.00%
0.50%
9.50%
Fund Value IN ThousandS
Estimated Net Fund Value
$500.00
$400.00
$300.00
Horizon Technology
$200.00
Horizon Energy
$100.00
Horizon Space
$0.00
Cash Needs Assessment
Horizon Investments LLC
Cash Budget
Year
Cash Balance, Beginning
Add Receipts
Advisory Fees
Transaction Fees
Total Receipts:
Total Cash Available:
Less Disbursements:
Direct Labor
Rent
Advertising
Insurance
Utilities
Office Equipment
Computer Software
Computer Hardware
Total Disbursements
Excess(deficiency) of Cash
Available Over Disbursements
Financing:
Borrowings
Repayments
Interest
Total Financing
Cash Balance, Ending
2012
$0.00
2013
($1,897.50)
2014
($174,788.62)
2015
($346,993.69)
$2,091.50
$5,100.00
$7,191.50
$7,191.50
$20,915.00
$5,355.00
$26,270.00
$24,372.50
$21,333.30
$5,622.75
$26,956.05
($147,832.57)
$21,759.97
$5,903.89
$27,663.85
($319,329.84)
$160,640.00
$18,000.00
$6,500.00
$1,500.00
$5,640.00
$5,709.00
$53,900.00
$7,200.00
$259,089.00
$160,640.00
$18,000.00
$6,500.00
$1,500.00
$5,640.00
$192,280.00
$160,640.00
$18,000.00
$6,500.00
$1,500.00
$5,640.00
$192,280.00
$160,640.00
$18,000.00
$6,500.00
$1,500.00
$5,640.00
$192,280.00
($251,897.50)
($167,907.50)
($340,112.57)
($511,609.84)
$250,000.00
$250,000.00
($1,897.50)
($6,044.73)
($836.39)
($6,881.12)
($174,788.62)
($6,044.73)
($836.39)
($6,881.12)
($346,993.69)
($6,044.73)
($836.39)
($6,881.12)
($518,490.96)
Pro Forma Income Statement
Horizon Investments LLC
Net Revenue
Traction Fees
Advisory Fees
Total Revenue
Operating Expenses
Adverising
Insurance
Depreciation Office Equipment
Purchase of Office Equipment
Computer Software
Salaries
Total Operating Expenses
General Expenses
Utilites
Telephone and internet
Web Hosting
Rent
Payroll Taxes
Total General Expenses
Other Expenses
Loan Interest
Total Revenue
Total Expenses
Earnings before Taxes
Taxes
Net Income
2012
2013
2014
2015
2016
2017
$2,091.50
$5,100.00
$7,191.50
$20,915.00
$5,355.00
$26,270.00
$21,333.30
$5,622.75
$26,956.05
$21,759.97
$5,903.89
$27,663.85
$30,681.55
$8,420.47
$39,102.02
$43,323.37
$11,890.78
$55,214.14
$6,500.00
$1,500.00
$0.00
$13,160.00
$51,400.00
$160,640.00
$233,200.00
$6,500.00
$1,500.00
$1,880.00
$0.00
$0.00
$160,640.00
$170,520.00
$6,500.00
$1,500.00
$1,880.00
$0.00
$0.00
$160,640.00
$170,520.00
$6,500.00
$1,500.00
$1,880.00
$0.00
$0.00
$160,640.00
$170,520.00
$6,500.00
$1,500.00
$1,880.00
$0.00
$0.00
$160,640.00
$170,520.00
$6,500.00
$1,500.00
$1,880.00
$0.00
$0.00
$160,640.00
$170,520.00
$5,640.00
$1,920.00
$96.00
$18,000.00
$39,360.00
$65,016.00
$5,640.00
$1,920.00
$96.00
$18,000.00
$39,360.00
$65,016.00
$5,640.00
$1,920.00
$96.00
$18,000.00
$39,360.00
$65,016.00
$5,640.00
$1,920.00
$96.00
$18,000.00
$39,360.00
$65,016.00
$5,640.00
$1,920.00
$96.00
$18,000.00
$39,360.00
$65,016.00
$5,640.00
$1,920.00
$96.00
$18,000.00
$39,360.00
$65,016.00
($6,881.12)
($6,881.12)
$39,102.02
$228,654.88
($189,552.86)
$0.00
($189,552.86)
$55,214.14
$228,654.88
($173,440.74)
$0.00
($173,440.74)
$0.00
$7,191.50
$298,216.00
($291,024.50)
$0.00
($291,024.50)
($6,881.12)
($6,881.12)
($6,881.12)
$26,270.00
$228,654.88
($202,384.88)
$0.00
($202,384.88)
$26,956.05
$228,654.88
($201,698.83)
$0.00
($201,698.83)
$27,663.85
$228,654.88
($200,991.03)
$0.00
($200,991.03)
Other Financial Records
Tax Break down on $50,000 per Employee
FICA OASDI
$2,100.00
FICA Medicare
$725.00
Federal Tax
$5,465.00
State/ Local Est 3%
$1,550.00
Total
$9,840.00
Office Furniture
Desks
Chairs
Lighting
Filing Cabnets 4 drawer Vertical
Filing Cabnets 4 drawer Lateral
Bookshelves 4 shelf
Safe
Outside Signs
Computer Equipment
Computers
Monitors
Server
Server Rack
Backup Hard drives
Computer Software
Microsoft Office Professional
Vitech Equitrak Software for
investments
QTY
4
8
4
4
3
4
1
3
Itemized Startup Items
Price
Total
Comments
$300.00
$1,200.00
100
$800.00
50
$200.00
200
$800.00
500
$1,500.00
120
$480.00
500
$500.00
60
$180.00
4
8
1
1
2
$500.00
$100.00
$4,000.00
400
150
$2,000.00
$800.00
$4,000.00
$400.00
$300.00
4
$350.00
$1,400.00
1
$50,000.00 $50,000.00
Basic Home Office Computer loaded with Windows 7
19" Dual monitor setup on every computer
Bare Bones server
Bare bones open post frame
3TB external Backups
Conclusion
As discussed in the financial section the crux of the business comes down the finding an initial investor
to supply the fund startup capital. While three million dollars is the require amount to be earning an
income by 2016 it still isn’t enough for the funds to diversify enough to be stable while still offing
investment capital to startup technology companies. The growth potential is there but the funds need
to be able to handle the loss of significant investments. At the three million dollar mark any loss on
investment could irrevocably cripple the fund. Even the idealistic investors that the funds are targeting
won’t suffer the feeling of throwing their money away. To become a viable source of venture capital the
funds need to be able to give out multiple investments when good ideas are presented. This requires a
large amount of money on hand or investments with high liquidity. The nature of the majority of the
funds investments will be long term, preventing rapid shifts in focus when new ideas come up. Constant
injections of new capital will be required to maintain the funds ability to invest in newer technologies.
With the low value investments of the target audience an extremely high volume of investors will be
required to maintain the funds ability to invest.
Since no source of the millions required to truly grow the company to critical mass can be identified we
must decide this idea is infeasible. The age old adage still applies in this situation “You need money to
make money”. If a benefactor or group of benefactors could be identified the idea could be feasible but
would require major financial backers ready to inject new capital if the funds suffered heavy losses on
high risk investments..
Sources
United States. Bureau of Labor Statistics. Usual Weekly Earnings of Wage and Salary Workers: First
Quarter 2012. Washington: GPO, 2012 Web.
<http://www.bls.gov/news.release/pdf/wkyeng.pdf>
United States. Bureau of Labor Statistics. Industry Employment and output projections to 2020.
Washington: GPO, 2012 Web.
<http://www.bls.gov/opub/mlr/2012/01/art4full.pdf>
Vitech. Vitech Systems Group, Inc. 2012. Web. 1 Jun. 2012
<http://www.vitechinc.com/investment_overview.asp>
Staples.com. Stables Inc. 2011. Web. 3 Jun. 2012
<http://www.staples.com/>