Proforma
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![Page 1: Proforma](https://reader033.fdocuments.us/reader033/viewer/2022061110/5451b937af79590d428b7fa4/html5/thumbnails/1.jpg)
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A "disruptive innovation"
• HotWax offers Superior features Servers an untapped/underserved market
segment Provides comparable results at a vastly
reduced price
• Analogue: Desktop publishing Removing the need for the trained expert
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The HotWax Product Offering
• HotWax will provide hosted websites Budget: $29.99/mo Pro: $49.99/mo
• Discounts for advance payment
• HotWax goal is to have 80% of subscribers purchase the Pro plan
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Marketing HotWax
• Goal: Low cost/no cost marketing Word of mouth Creating a community
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Marketing HotWax
• Evangelizing to create a community Model: Macintosh Create sense of superiority and coolness Provide methods for community to
communicate• Online chats• “Click to share my stuff” – users can offer items on
their sites to other HotWax users
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Marketing HotWax
• Making News Use news outlets to generate interest
• “20 websites in an hour” – Seminar event at conventions 20 novice users build websites using HotWax First event: 27 August, Asheville TED
convention
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Marketing HotWax
• Doing Good Free hosted websites for nonprofits HotWax in the classroom
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Building Community = Sales
• You want to share / Show-off what you build Experienced users – “ninjas” Opinion leaders who want to evangelize for:
• Bragging rights• Part-time work
• HotWax word of mouth already spreading in Asheville
Plan: 50 HotWax Websites by 31 October
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Corporate Structure
• S Corp: Net revenue disbursed to shareholders on a
regular basis Shareholders holding 5% or more will be on
Board of Directors
• Business goal: Maximize cashflow and revenue disbursement to shareholders
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Summary of Business Goals
$1 Million in annual Free Cash Flow for shareholder disbursementwithin 3 years
• Year 1: 1 new subscriber / day $ 35 / mo average subscription
• Year 2: 2 new subscribers / day $ 37 / mo average subscription
• Year 3: 3 new subscribers / day $ 39 / mo average subscription
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Goal: New Subscribers
145 Thousand New Domains Created – in 24 Hours
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Goal: New Subscribers
HotWax Goal: Within 3 years: 3 new subscribers / day (0.002%)
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Active Websites, July 2009
07/200977 million
Goal: New Subscribers
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07/201087 million+10 million
Active Websites, July 2010
Goal: New Subscribers
10 million New Websites
in One Year
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Comparison / Reality Check
• Comparable Business Data Hard/impossible to find accurate numbers
• No public records of subscriber to Homestead, Godaddy, Google Sites, Yahoo Sites etc.
• Different Business Model/Product Creates a new market for a new type
customer
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Comparison / Reality Check
• Squarespace.com A highly flexible website building system Also with public revenue records(!)
Main difference from HotWax • Squarespace requires a goodly amount of
technical expertise• Good results but hard to get started
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Comparisons / Reality Check
• Squarespace.com joined the INC 500 in first 3 years (#339)
$ 2.2 million annual revenue
after 3 years
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Summary of ExpectedSubscriber Revenue
• End Year 1: Yearly revenue -- $153,300
• End Year 2: Yearly revenue -- $ 482,895
• End Year 3: Yearly revenue -- $ 1,014,080
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Subscriber Revenue Prospects – Details
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Additional Revenue Sources
• “Ninjas” HotWax trained consultants Ninjas pay for training -- +/- $250/ninja HotWax provides client leads Ninjas a likely source of new subscribers
• Setup Fees Possible: equal to 1 month subscription
• Add ons and Extras Email provision – users get unlimited email, email addresses Sales of domain names, etc
• New product offerings HotWax Mobile “DreamWeaver” on the web
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Expenses
• Expenses are very low
• Low cost servers or cloud computing Current new Goliath server can handle about 550 websites $159/month, include backbone connections Cloud computing costs even less
• Tech support Assume about $15 / year per subscriber Revenue from setup charges will more than cover support
• Salaries Officers will take equity and dividends in lieu of salaries Support staff primarily 1099 consultants or offshore
• Marketing Primarily low-cost social and viral marketing Ninjas will be key drivers of subscription revenue
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Funding Goals
• Seeking $50 – $100K • To be applied to marketing and operational
expenses Marketing: commission advances and advertising Tech support: salary, equipment Operations: salaries for maintenance, servers Business expenses: facility/utilities/etc
• Anticipate cash flow positive by end of year 1
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Investment opportunity• Convertible Bond
Fixed rate security Secured senior debt 36 month maturity – full return of principal
• Dividend: 12% / year Paid monthly or annually
• Convertible at any time to preferred stock 1 Bond = 1% total outstanding shares of stock Preferred means– no dilution in event of
later offerings
• Investment amount: $10,000/bond
Bondholders will be informed in advance of other capital events that might affect the value of shares, and will be given advance opportunity to convert to stock
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Investment opportunity – Option 2
• Preferred Stock No dilution in event of later offerings
• Each Preferred share = 2% of outstanding shares
• Investment amount: $10,000/preferred share