RICE UNIVERSITY
ALEXANDER WESLEY AND JACOB HERZIG
[email protected]
303-900-2767
Table of Contents
Executive Summary ....................................................................................................................................... 1
Market and Industry Analysis ........................................................................................................................ 4
Market Sizing and Target Customers ............................................................................................................ 4
Competition in Target Market ........................................................................................................................ 5
Marketing and Sales ....................................................................................................................................... 6
Marketing and Sales Plan Overview ............................................................................................................. 6
Pre-sale Campaign ....................................................................................................................................... 6
Face to Face Marketing ................................................................................................................................ 7
Internet Based Marketing .............................................................................................................................. 7
Sales Channels ............................................................................................................................................. 7
Team ................................................................................................................................................................ 8
Financials........................................................................................................................................................ 9
Use of Funding ............................................................................................................................................. 9
Financial Highlights (Please see key assumptions in Appendix) ................................................................... 9
Appendix ........................................................................................................................................................11
Key Financial Assumptions ..........................................................................................................................11
Year 1 Breakeven Point ...............................................................................................................................11
Demand Creation and Budget Forecast (matches pre-launch marketing budget) ........................................12
Selected Press: ............................................................................................................................................13
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Executive Summary
Overview:
As mobile devices become increasingly portable, we have
work and entertainment experiences almost anywhere, but
the experience is inhibited: with the portability, we get a small
screen and almost everyone prefers a large screen
experience. The missing link is having the large screen that
80%
prefer
for
work 1 and
entertainment2, that is also portable.
SPUD Popped-Up
SPUD Collapsed
That’s why Arovia, Inc. created its first
product, SPUD, the Spontaneous Pop-up Display. SPUD is the world’s first high resolution3, 24-inch computer
screen that collapses like a small umbrella to approximately the size of an Apple TV4 and weighs less than a
pound and a half. With SPUD, Arovia’s customers have the large and portable screen they need, anywhere they
want. SPUD, either wirelessly or wired, connects to a phone, tablet, or laptop. SPUD has 4 hours of battery life.
SPUD relies on Arovia’s optical, mechanical, and design innovations to create an ideal form factor and
experience for Arovia’s customers. SPUD can be conceptualized as a small projector connected to a collapsible
projector screen. The collapsible screen works similarly to an umbrella, which enables the customer to easily
pop-up (and collapse) the display in one motion. SPUD’s mechanics successfully tension the screen such that
wrinkles are mitigated. Arovia has also validated screen materials that provide high contrast and resolution while
also being wrinkle resistant. Arovia’s solution effectively eliminates the biggest issue with portable projectors,
the lack of a suitable display surface in the varied environments we use mobile devices. Only in the last few
months have portable projectors developed to the point where they can offer the resolution and battery life that
Arovia’s customers need. The technology is advancing such that future versions of SPUD will offer even higher
resolution and take up less space when popped-up.
Arovia has made 6 fully functional prototypes, completed the final design, has chosen and quoted key
components (at volume), and is in discussions with contract manufacturers for producing at volume. Arovia owns
the IP (2 trademarks, design patent filed, PCT/utility patent filed).
Arovia will launch a pre-sale campaign (i.e. Kickstarter), selling SPUD at a $300 price point, in early summer
2016.
By attending only one major event (South by Southwest 2016) and subsequent widespread press (including
Gizmag5, Discovery6, Engadget7 as well as others; please see appendix), 1300 potential customers (and
https://www.dell.com/downloads/global/products/monitors/en/dual_monitors_boost_productivity_whitepaper.pdf
http://www.tvtechnology.com/news/0086/big-screen-tv-preferred-by--percent-of-viewers/273046
3 1280x720
4 2.17 (height) x 5.64 (width) x 7.52 (length)
5 http://www.gizmag.com/spud-pop-up-screen/42350/
6 http://news.discovery.com/tech/gear-and-gadgets/tasty-tech-eye-candy-march-20-160320.htm
7 http://de.engadget.com/2016/03/20/spud-24-zoll-ausfaltmonitor-fur-die-westentasche/
1
2
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counting) gave their email address to Arovia. These potential customers are so excited about SPUD that they
want to be notified when SPUD pre-sales begin. Over 30% of the people who go to Arovia’s website give Arovia
their email (average landing page conversion is 2.35% and top 10th percentile is 11.45%); this data coupled with
Arovia’s more than 200 face to face customer interviews provides clear evidence of widespread product market
fit and demand for SPUD. Additionally, Google has recently reached out to Arovia to help with promotion, due to
the buzz Arovia is generating. Arovia has bootstrapped to date with its only funding coming from a $50K grant
from the National Science Foundation and $25.2 K provided through self-funding.
Arovia is a brand that focuses on providing the best, no sacrifices mobile experience to its customers.
Market:
Arovia’s customers include mobile professionals (e.g. auditors, management consultants, product managers,
app developers, MBA students, entrepreneurs) who typically work at 3 or more places and consumers who
prefer viewing content on a large screen (e.g. showing movies to kids in back of car, while being in different
rooms in home or apartment, camping, tailgating, exercising in the park). There are about 70 million mobile
professionals8 in the United States (50% of working population) who typically work at 3 or more places.
Consumers who prefer a large screen constitute at least 80%9 of smartphone users or 152.4 million people in the
U.S.. Consumers overlap with the mobile professionals and therefore, the total addressable market, assuming a
$300 price point is $45.7 billion in the U.S. or $780 billion if including the 2.6 billion global smartphone users10.
Arovia’s serviceable addressable market constitutes a small subset of this large total addressable market and
includes U.S. millennial aged early adopters of technology who prefer larger screens which Arovia estimates as
$3.8 billion11. Arovia’s initial target market are the customers who need a better solution than USB monitors (1318”, “portable12” monitor, that use the USB port for power and data). USB monitors average 500,000 domestic
unit sales annually. Therefore, this initial target market is $150 million13.
Beyond the mobile professional and consumer, Arovia’s mobile display solutions have utility for government and
industrial applications (e.g. military, first responder, disaster relief, field engineering, construction, etc.). These
applications demand a more ruggedized solution and will be addressed in subsequent product offerings.
Marketing and Sales:
Arovia plans to go to market with a pre-sale campaign (i.e. Kickstarter) in early summer 2016. To ensure a
successful campaign, Arovia has primarily relied on face to face marketing (Maker Faire Houston and South by
Southwest) and positive press to build a backlog of customers who are ready to purchase on the first day of the
campaign. Following, the pre-sale campaign, SPUD will be available for sale at retail channels including,
initially, Amazon and Arovia’s website. After demonstrating initial traction, SPUD will be available at major
8
9
http://www.businessnewsdaily.com/3300-employees-work-home-office.html
https://www.exacttarget.com/sites/exacttarget/files/deliverables/etmc-2014mobilebehaviorreport.pdf
Already, approximately 25% of the people on Arovia’s mailing list are international and about half of the press
coverage Arovia has received has been international.
11
Technology adoption curve and 83.1 million millennials
12 Same size and weight as traditional 13-18” monitor
13 Assuming $300 price point for SPUD
10
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retailers including Best Buy and Microcenter. The B2C sales team will be in charge of managing these
channels. Additionally, a B2B sales team will manage relationships with corporate clients (i.e. accounting14,
consulting, and engineering firms etc.).
Competition:
Arovia has no direct competition in the portable and large display market. Currently, the only “portable”, “large”
displays are USB monitors, but they have only one third the screen area15and weigh twice as much as SPUD and
are cumbersome. There are currently 1.5 million USB monitors in use today in the U.S. ($177 million in domestic
sales; based on Arovia’s indirect analysis of Amazon sales), including by about half the staff at the big 4 accounting
firms. They retail for $100 to $300.
Team:
Alexander Wesley co-founded Arovia after years of frustratingly
wanting a large screen on the go. With a background in optics
(B.S./M.S. University of Rochester) and product management
(managing international launch of new technology product and
Rice University MBA), he invented SPUD so mobile people like
him can have the large screen experience, whenever, and
however they want. Alexander is the CEO of Arovia.
George Zhu co-founded Arovia due to his passion for productivity,
George Zhu and Alexander Wesley
rapid prototyping, and mechanical engineering. George is a master
prototyper and was the first person to ever create a one-step pop-up display, SPUD. George is a Rice University
mechanical engineer. He is the CTO of Arovia.
Mark Kimbrough is Arovia’s lead industrial designer. He has been honored with over 15 international design
awards, and has had six products added to the permanent design collection at the Chicago Museum of Design
and Architecture.
Arovia’s advisors include Gene Frantz, Chris Church, Adam Wulf, Lydia Musher, John Reale, Karl Maier, and
Michael Evans. Gene is considered the father of modern digital signal processing. During his extensive career
as a TI Fellow (top technical position at TI) he designed and brought to market numerous acclaimed products
(most notably the Speak & Spell which was the first product to contain a speech synthesizer). Chris has founded
three successful companies in Houston, including Alert Logic, Dynamic Perception, and, currently, MacroFab.
Dynamic Perception and MacroFab are both electronic hardware companies, like Arovia.
Ernst and Young uses about 100,000 USB monitors (a competing product) which costs them $10 M; the
competing product breaks frequently and offers a much smaller screen size than SPUD
14
Typically, 15 inch or less screen size and area decreases approximately the square of the screen
diagonal; i.e. 15^2=225 inches^2 is approximately 3 times smaller than 24^2=576 inches^2
15
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Startup Costs:
The initial startup costs are custom tooling and injection molds ($400 K), salaries ($280 K), further engineering
development ($200 K), pre-launch marketing ($100 K), and patent attorney costs ($20 K) for a total of $1 M.
These key expenditures enable Arovia to make SPUD commercial ready and begin shipping in early 2017.
Pro-forma Financials:
Metric
Sales/Pre-sales ('000 Units)
Total Revenue ($M)
Revenue ($M)
COGS ($M)
Gross Margin
Total Expense ($M)
EBITDA ($M)
2017 2018 2019 2020
22
64
157
396
7
22
47
103
6
21
45
100
4
11
23
43
44% 50% 50% 58%
5
13
28
51
2
8
17
48
Investment Offering
Arovia is seeking a $1 M stock investment to fund the milestone of shipping the first SPUDs in February 2017.
Arovia could be a likely acquisition target given the amount of acquisition activity in the consumer electronics
industry. Acquirers could include Dell, Samsung, Apple, or Sony, among others.
Market and Industry Analysis
Market Sizing and Target Customers
Arovia’s customers include mobile professionals (e.g. auditors, management consultants, product managers,
app developers, MBA students, entrepreneurs) who typically work at 3 or more places and consumers who
prefer viewing content on a large screen (e.g. showing movies to kids in back of car, while being in different
rooms in home or apartment, camping, tailgating, exercising in the park). There are 70 million mobile
professionals in the United States (50% of working population) who typically work at 3 or more places.
Consumers who prefer a large screen constitute at least 80% of smartphone users or 152.4 million people.
Consumers overlap with the mobile professionals and therefore, the total addressable market, assuming a $300
price point, is $45.7 billion in the U.S. or $780 billion if including the 2.6 billion global smartphone users.
Arovia’s serviceable addressable market constitutes a small subset of this large total addressable market and
includes U.S. millennial aged early adopters of technology who prefer larger screens which Arovia estimates as
$3.8 billion. Arovia’s initial target market are U.S. customers who need a better solution than USB monitors
(<18”, “portable” monitor, that use the USB port for power and data). USB monitors average 500,000 domestic
unit sales annually. Therefore, this initial target market is $150 million. A major auditing firm, Ernst and Young,
purchases 35,000 units a year of USB monitors. The other big 4 accounting firms exhibit similar buying
behavior, demonstrating a large B2B market opportunity in only one industry (with almost every industry having
more of its workforce becoming mobile).
Beyond the mobile professional and consumer, Arovia’s mobile display solutions have utility for military and
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industry application (e.g. military, first responder, disaster relief, field engineering, construction, etc.). These
applications demand a more ruggedized solution. Arovia plans to introduce a product tailored for this $11 B
market in FY1816.
Competition in Target Market
As there are no alternative producers of large and portable display devices similar to SPUD, Arovia’s closest
competitors are manufacturers currently producing portable USB monitors (i.e. AOC, ASUS, Acer GeChic, HP,
and Lenovo).
Screen Size
SPUD
24"
Tabletop
Monitors
24"+
Weight
Battery Life
<1.5 lb.
4 hrs.
9 lbs.
N/A
Durability
Price
Connectivity
USB
Monitors
13-18"
1.5-3 lbs.
N/A
Break in 1
Durable
Durable
year
$300
$150 $100-$300
HDMI/wireless HDMI/VGA USB Cable
Surface Pro
4
12.3"
1.76 lbs.
3.25 hrs.
iPad
Pro
12.9"
1.57
lbs.
6 hrs.
VR Oculus Rift
N/A
0.97 lbs. (on
head)
N/A
Durable
Durable N/A
$900
$800
N/A
N/A
Wired
$1,300
USB monitors are computer displays that use laptops to provide power and video input (they can also be
conceptualized as iPads without an operating system). Arovia seeks to directly supplant use of these products
among the target demographic of mobile professionals. These devices range in price from around $100 to as much
as $1200. USB monitors cannot be collapsed in size for transport like SPUD. Therefore, the screen size of these
devices is limited to practical uses for customers to carry in a backpack or briefcase, which, at currently 13-18
inches, is quite a bit smaller than the screen size SPUD offers (offering a quarter of the screen real estate as
SPUD). USB monitors typically weigh the same as and encompass the same volume as a laptop (2-4 pounds).
Given that SPUD offers a favorable value proposition compared to USB monitors, supported with interview data
from over 200 customers, Arovia is currently planning on a $300 initial price point for SPUD.
16
http://www.facethefactsusa.org/facts/feds-spend-74-billion-it (assuming 15% of IT spending is displays)
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Further on the horizon, Organic Light Emitting Diode (OLED) technology stands as a potential competitor to SPUD.
OLED is light and thin, and most importantly could potentially utilize flexible plastics to create a foldable and
compact display technology. All potential competitors, including OLED, who use these traditional display
technologies rely on the emergence of flexible transistors, in order to offer portability, which many experts believe
is unrealistic. Moreover, the mechanics patented by Arovia cover alternative forms of collapsible displays.
Therefore, Arovia could adapt its solution to one of these technologies, if they offer a better user experience.
Marketing and Sales
Marketing and Sales Plan Overview
Arovia conceives of its marketing along two key dimensions: chronological and channel. Chronologically, the time
leading up to and during the pre-sale campaign will be different than the post-pre-sale stage. In terms of channels,
Arovia expects significant overlap in its efforts to generate awareness of SPUD. Ultimately, Arovia will need distinct
strategies to address each of the B2B and the B2C channels.
Additionally, Arovia has intent-to-use trademarks for SPUD and Arovia to help mitigate copying and protect the
brand.
Pre-sale Campaign
Successful pre-sale campaigns rely on being featured (i.e. on the front page) on the pre-sale site. Having this
exposure creates a domino effect which manifests as non-targeted customers purchasing the product and regional
and national publicity driving purchasing. Therefore, a successful pre-sale campaign strategy focuses on being
featured by the pre-sale site. Products are featured for 2 reasons (1) you know someone at the pre-sale site and
give them sufficient notice (i.e. 2 weeks) of your launch (i.e. managing a mutually beneficial relationship with the
pre-sale site) and (2) meeting the sales campaign goal on the first day. Arovia is already working with the
consumer electronics lead at Kickstarter, John Dimatos, to help with the SPUD launch on Kickstarter.
Meeting the sales campaign goal requires a few components (1) having a backlog of customers on the day the
campaign launches who convert (i.e. purchase SPUD), (2) setting the lowest goal possible (i.e. it’s better to well
surpass a $30,000 goal with $50,000 then barely meet a $50,000 goal), (3) having a compelling marketing video,
and (4) offering incentives customers care about (e.g. if sales surpass $100,000 all customers receive automatic
upgrade to touch-screen version of SPUD).
To procure a backlog of customers prior to the campaign, Arovia primarily has focused on face to face marketing.
The current number of signups is 1300 with an anticipated 20%17 conversion rate based on initial survey and
further purchases through promotion By attending only one major event (South by Southwest 2016) and
subsequent widespread press (including Gizmag, Discovery, Engadget as well as others), 1300 potential
customers (and counting) gave their email address to Arovia because they are so excited about SPUD that they
want to be notified when SPUD pre-sales begin. Over 30% of the people who go to Arovia’s website give Arovia
their email (average landing page conversion is 2.35% and top 10th percentile is 11.45%); this data coupled with
Arovia’s more than 200 face to face customer interviews provides clear evidence of widespread product market fit
and demand for SPUD. Concurrently, Arovia will utilize and coordinate their networks (personal, Rice, UH Industrial
Design) to promote the launch of the campaign.
17
i.e. 260 unit sales in the first 24 hours ($78,000)
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Arovia’s goal is to raise more than $100,000 in the campaign which will demonstrate the need for SPUD and that
SPUD satisfies customer needs, de-risking and therefore increasing the value of Arovia.
Face to Face Marketing
Arovia will utilize outbound marketing means to boost awareness of SPUD directly among the target customer
base using face to face marketing. An example tactic would be setting up a kiosk in an airport, where Arovia would
invite traveling professionals to try its product. Arovia could establish a similar presence in hotels. Professionals
would be invited to connect their laptop to the SPUD and get a full experience of the product. Arovia also expects
to attend conferences with large numbers of potential customers (i.e. South by Southwest, Makerfaires, CES, NAB
Show, American Institute of CPA (AICPA) conferences for auditors, NATP conferences for tax consultants, IMC
conferences for management consultants) to demonstrate the product. Arovia has averaged 100 email signups
per 8 hours at conferences attended to date.
Internet Based Marketing
It is likely that consumers looking to meet their need for a portable screen search for concrete products such as
“tablets” or “USB monitors.” Arovia will need to optimize its online presence in order to redirect traffic headed
towards these products towards SPUD. Arovia has already launched a blog that targets mobile professionals
with the intent of catalyzing a community of customers. Arovia has also seen early success in Facebook with
Arovia’s post reaching 3000 people, with 645 of those engaging in the post, with an expenditure of $10.
Arovia’s search engine optimization and search engine marketing strategy will both boost its ranking among
search results, as well as boost the quality score that drives the effectiveness of AdWords spending (reducing
cost per click). While average cost per clicks can be in the $1-2 range, more competitive words can cost as
much as $60 and are increasing, although much of this is driven by consumer services as opposed to goods.
Arovia will use a high quality campaign on niche search terms to target a cost per click of below $2. However,
Arovia’s current 30% landing page conversion rate provides strong evidence of the efficacy of internet based
market for this business.
Using Amazon Marketing as opposed to AdWords may be a better choice, as costs per click are generally lower
(about $0.25 for electronics) and presumably the audience of Amazon users are those primed to make a
purchase. The only downside to Amazon is that advertisers are prohibited from directing users outside of the
Amazon website (e.g. to their own website). Thus Arovia would be forced to conduct all sales generated by this
advertising on the Amazon channel and occur the necessary fees (the typical 8% on a $300 projected FY16-17
price would be $24).
Sales Channels
B2C
Arovia will seek a presence on online marketplaces such as Amazon, as well as traditional retailers such as
BestBuy since these are the most frequented consumer electronics retailers in the United States. BestBuy, for
example, has an official online vendor portal through which companies can apply to become new vendors. The
exact terms BestBuy offers are probably negotiated with each vendor, but it can be inferred that Arovia would
receive 75% of final product sales price given BestBuy’s average gross margins. Anyone can sell on Amazon and
they charge an 8% channel cost. SPUD would also be available for sales on the Arovia’s website.
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B2B
Arovia’s B2B strategy must solve the problem of persuading professional services firms, F500 companies, and
others to budget SPUD for their mobile professionals. Many of these firms, including the big 4 accounting firms,
already use USB monitors, however are frustrated by their durability, smalls screen size, and weight.
Arovia’s current conversations indicate that at professional services firms, partners drive key budgeting decisions.
Partners are motivated to drive the productivity of their firm, and this means that more junior firm members who
insist that SPUD would be productivity-enhancing would be the key influencers in this situation. Arovia has been
approached by Ernst and Young, one of the big 4 accounting firms for pilot testing due to their frustration with USB
monitors. Ernst and Young currently spends $3.5 M a year on USB monitors.
Non-partnership F500 firms, on the other hand, tend to be more hierarchical, with a chief technology officer (CTO)
explicitly in charge of technology budgeting decisions.
An additional B2B channel could be hotels, co-working spaces, and airlines purchasing SPUDs to rent. Given the
durability of SPUD, this would offer a good value proposition for these businesses.
Team
Due to the technology and target market, Arovia requires a team with a background in optical engineering,
mechanical engineering, industrial design, branding, sales, and marketing.
President and CEO: Alexander Wesley
Alexander Wesley founded Arovia after years of frustratingly trying to be productive while on the go. With
a background in optics (B.S./M.S. University of Rochester) and product management (launched new
technology product on international marketplace and Rice University MBA), he invented SPUD so you
can have the display experience you want, wherever you want.
CTO: George Zhu
George Zhu joined Arovia due to his passion for productivity, rapid prototyping, and mechanical
engineering. George led the development of first 6 prototypes and works closely with Arovia’s industrial
designers in developing the first consumer ready version of SPUD. George is a master prototyper and
was the first person to ever create a one-step pop-up display, SPUD. George is a Rice University
mechanical engineer.
Lead Industrial Designer: Mark Kimbrough
Mark Kimbrough is Arovia’s lead industrial designer. From 1995 to 2006, Mark Kimbrough was Principal,
and Creative Director of Design Edge, Inc., a product design and development consultancy in Austin,
Texas. Based on international design awards, Design Edge was consistently ranked by BusinessWeek
magazine as one of the top 10 product design firms in the United States during Mark’s tenure. Mark’s
body of design work is extensive: He holds over 20 design and utility patents, his work has been
published in numerous national and international magazines, and several books highlighting notable
design achievement. He has also been honored with over 15 international design awards, and has had
six products added to the permanent design collection at the Chicago Museum of Design and
Architecture.
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Advisors
Arovia maintains a team of advisor with extensive and relevant engineering, entrepreneurship, marketing, and
legal experience. Arovia’s advisors include Gene Frantz, Chris Church, Adam Wulf, Lydia Musher, John Reale,
Karl Maier, and Michael Evans. Gene is considered the father of modern digital signal processing. During his
extensive career as a TI Fellow (top technical position at TI) he designed and brought to market numerous
acclaimed products (most notably the Speak & Spell which was the first product to contain a speech
synthesizer). Chris has founded three successful companies in Houston, including Alert Logic, Dynamic
Perception, and, currently, MacroFab. Dynamic Perception and MacroFab are both hardware companies, like
Arovia.
Financials
Use of Funding
The funds needed to first launch SPUD include machine tooling and molds ($400,000), design engineering
($200,000), pre-sale marketing ($100,000), salaries ($280,000), and the attorney costs ($20,000) for the PCT
(U.S. and additional jurisdictions).
The PCT patent grants Arovia the options for patent filings, for 18 months, in jurisdictions who have signed the
Patent Cooperation Treaty in addition to including a filing with the USPTO. Arovia will delay filing outside the
United States until the international market opportunity and strategy is formulated.
Design engineering consists of initial conceptualization, refinement of chosen design form, and engineering of
initial prototypes. Arovia’s costs over the next year are dominated by the tooling and molds needed for initial
prototyping of custom optical components and mechanical parts.
Arovia’s marketing costs consist of pre-sale campaign face to face marketing ($80,000, including initial demo
units) and internet based marketing ($20,000) leading up to the first SPUD’s shipping in February 2017.
These key expenditures enable Arovia to make SPUD commercial ready and patent protected.
Financial Highlights (Please see key assumptions in Appendix)
Income Statement
All values in Million USD
Units (000's)
Gross Sales
Net Sales
Cost of Goods Sold
Direct Material
Direct Labor
SG&A
Overhead
Marketing & Sales
R&D
EBITDA
Depreciation & Amortization
Earnings Before Interest & Taxes
Provision for Income Tax
Net Income
2016
-
0.27
0.21
0.06
0.15
(0.42)
0.00
(0.42)
(0.42)
2017
22
6.70
6.35
3.78
3.50
0.28
0.64
0.49
0.14
0.29
1.65
0.00
1.65
0.58
1.07
2018
64
21.56
20.61
10.73
10.06
0.67
1.52
1.12
0.40
0.79
7.56
0.01
7.55
2.64
4.91
2019
157
46.95
44.86
23.29
21.55
1.74
2.83
1.95
0.87
1.75
17.00
0.02
16.98
5.94
11.04
2020
396
103.22
99.53
43.35
38.76
4.59
4.94
3.40
1.54
3.07
48.17
0.05
48.12
16.84
31.28
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Balance Sheet
All Values in Million USD
2016
Assets
Cash & Mkt. Securities
0.70
Accounts Receivable
0.00
Inventories
0.00
Net Fixed Assets
0.01
Patents
0.02
Total Assets
0.73
Current Liabilities
Accounts Payable
0.00
Unearned Revenue (Kickstarter) 0.12
Non-Current Liabilities
Long-term Debt
0.00
Total Liabilities
0.12
Stockholders' Equity
Initial Paid-in Capital
0.03
Investment
1.00
Retained Earnings
(0.42)
Total Liabilities & Equity
0.73
Statement of Cash Flow
All Values in Million USD
Cash Flow from Operating Activities
Net Income
Depreciation & Amortization
Change in Current Assets
Accounts Receivable
Inventories
Change in Current Liabilities
Accounts Payable
Unearned Revenue (Kickstarter)
Net Cash Provided by Operating Activities
Cash Flow from Investing Activities
Purchase of Equipment & Intellectual Properties
Net Cash Provided by Investing Activities
2017
2018
2019
0.60
0.51
0.95
0.03
0.04
2.13
2.96 9.75
1.65 3.59
3.09 6.73
0.10 0.22
0.08 0.15
7.88 20.44
0.45
0.00
1.29
0.00
2.79
0.00
5.20
0.00
0.00
0.45
0.00
1.29
0.00
2.79
0.00
5.20
0.03
1.00
0.65
2.13
0.03 0.03
1.00 1.00
5.57 16.62
7.88 20.44
0.03
1.00
47.93
54.16
10
2020
30.47
7.96
14.93
0.50
0.31
54.16
2016
2017
2018
(0.42)
0.00
1.07
0.00
4.91
0.01
11.04
0.02
31.28
0.05
-
0.51
0.95
1.14
2.14
1.94
3.64
4.37
8.20
0.12
(0.30)
0.45
(0.12)
(0.05)
0.83
2.48
1.51
6.99
2.41
21.16
0.03
(0.03)
0.05 0.12
(0.05) (0.12)
0.22
(0.22)
0.48
(0.48)
-
-
Cash Flow from Financing Activities
Proceeds from Stock Issuance
Net Cash Provided by Financing Activities
1.03
1.03
-
Net Change in Cash
0.70
(0.10)
2.36
2019
6.77
2020
20.69
Arovia Business Plan
Please do not distribute outside of NVC | [email protected]
Appendix
Key Financial Assumptions
•
Arovia sells 22,000 SPUDs in FY 17 based on demand creation budget (later in Appendix)
•
$1 M investment in FY16
•
Arovia sells 10,000 government/industrial SPUDs in FY18
•
SPUD sales grow at 120% for mobile professional, 200% for consumer, and 100% for
government/industrial
•
Pre-sale 400 units in FY16
•
Sell price for SPUD is $300, $250, $250, $200 for FY17, 18, 19, and 20 respectively for mobile
professional and consumer, $800 for government/industrial
•
Domestic sales 100% in FY16 and 17 and 90%, 80%, and 70% in FY18, 19, and 20 respectively
•
B2B 50% and B2C 50% of sales
•
Initial cost of goods sold (quantity 1000) is $151 based on quotes and estimates
•
1 sales person at $100 K salary for every $5 M in B2B sales
•
Add 2 R&D personnel a year at $70 K a year
•
1 marketing personnel for every $5 M a year in sales at $60 K a year
•
1 accounting personnel for every $5 M a year in sales at $80 K a year
•
R&D expense is 10% of sales
•
Marketing expense is 5% of B2C sales
•
Sales expense is 5% of B2B sales
Year 1 Breakeven Point
BEP=
𝑓𝑖𝑥𝑒𝑑 𝑐𝑜𝑠𝑡/𝑚𝑜𝑛𝑡ℎ
𝑚𝑎𝑟𝑔𝑖𝑛/𝑢𝑛𝑖𝑡
$63,334/𝑚𝑜𝑛𝑡ℎ
=
$116/𝑢𝑛𝑖𝑡
=
546 𝑢𝑛𝑖𝑡𝑠
𝑚𝑜𝑛𝑡ℎ
11
Arovia Business Plan
Please do not distribute outside of NVC | [email protected]
12
Demand Creation and Budget Forecast (matches pre-launch marketing budget)
 Assumption: In FY17 convert 22 K customers (1834 a month)
 Internet based marketing and ads (currently averaging 30% conversion rate on landing page)
 Unpaid: AICPA newsletter, LinkedIn posts, Facebook, Reddit, Tom’s Hardware (banned), IGN,
iLovetoTailGate Blog, AVSforum, flyertalk etc.
 Google analytics+time to determine best channels, tactics, and manage
 Paid: Facebook, Google Ads
 $20 K, estimate from http://www.entrepreneur.com/article/54436
 Face to face marketing and ads (currently averaging about 175 signups for every $1000 in tradeshow
expenditure)
 50 early units=$500*60=$30 K
 Pilot testing, demos at hotel lounges, airports, MBA schools
 Attending and exhibiting (at some) trade shows focusing on mobility and auditing,
 $50 K
 Total=$100 K
Arovia Business Plan
Please do not distribute outside of NVC | [email protected]
13
Selected Press:
http://www.gizmag.com/spud-pop-up-screen/42350/
http://news.discovery.com/tech/gear-and-gadgets/tasty-tech-eye-candy-march-20-160320.htm
http://www.printedelectronicsworld.com/articles/9239/24-inch-computer-screen-that-collapses-to-the-size-of-your-fist
http://de.engadget.com/2016/03/20/spud-24-zoll-ausfaltmonitor-fur-die-westentasche/
http://www.inavateonthenet.net/news/article/arovia-debuts-24-in-display-that-fits-in-your-pocket
https://enuchi.jp/3530/
http://www.3dnews.ru/m/# arovia-reveals-spud-pop-up-screen page_930121
http://www.deccanchronicle.com/technology/in-other-news/180316/spud-an-umbrella-like-screen-that-fits-in-yourpocket.html
http://computerhoy.com/noticias/hardware/spud-monitor-24-pulgadas-portatil-plegable-42207
http://masquetech.com/2016/03/20/spud-una-nueva-pantalla-de-24-pulgadas-que-puedes-llevar-en-tu-bolsillo/
http://it.lrytas.lt/techno/pirmas-realiai-veikiantis-sulankstomasis-ekranas-telpa-i-kisene.htm
http://news.rambler.ru/scitech/33092633/
http://www.gizlogic.com/spud-monitor-plegable-portatil/
http://www.mittelstand-die-macher.de/produkte-loesungen/hardware/pop-up-display-portabler-monitor-zum-falten-vonarovia-22265
http://www.computerbase.de/2016-03/spontaneous-pop-up-display-faltbares-24-zoll-display-fuer-unterwegs/
http://tech-insider.es/spud-monitor-24-pulgadas-plegable/
http://www.businessnewsline.com/news/201603221205220000.html
http://www.dvhardware.net/article64088.html
http://www.insidehook.com/nation/arovia-foldable-techs-latest-a-2-foot-tv-screen-that-fits-in-your-pocket-sxsw/