Fluent Essays

Using the template from the lecture slides, I have to create a presentation that is no longer than 10 minutes. I will attach the instruction, lecture slides and the past assignments that have to do with my company below. homework__4.docx hw_3_final.docx lecture__7_2020.pptx new_venture.docx Unformatted Attachment Preview Homework #4 Utilizing the template from the 7th lecture please prepare a slide presentation for your company. Please remember that your entire presentation should take no more than 10 minutes. You may not have all the necessary info for your company or the company that you have chosen. If this is the case, then please improvise. Due Date: May 25th at 5:00 PM Jonas Jia PID: A15733910 16th May 2020 Draft Term Sheet for Jia’s Healthy Desserts and Pastries The draft sheet below, is crafted by Jonas Jia, the CEO of Jia’s Healthy Desserts and Pastries specifically for use by Green Chip Investment members, for the sole purpose of acting as a starting point in the negotiation of seed stage deals. The Green Chip Lead Investors will be presented as (GCI Investors) in the particular document. All engaging parties are encouraged to seek relevant legal counsel before engaging further. From a legal perspective, other than the segment dubbed “exclusivity,” this term sheet does not guarantee the role of fulfilling a legally binding obligation associated with any involved individual(s) or firm(s). Company name Jia’s Healthy Desserts and Pastries Location 8871, Greentop Rd, Lincoln, DE 19960 Type of Entity Delaware Incorporation Type of Equity Series A Preferred Stock Size of Offering $600,000 Minimum to close $450,000 Closing On 3Oth June 2022 or alternatively when the projected minimum to close is committed Valuation Pre-money $2,850,000 Post-money $3,450,000 Price per share $1.125 Investors The portfolio of investors will include diverse members of Green Chip Investment, all of whom are accredited investors and are acting on their own account. Besides this, other accredited investors as defined in (SEC Rule 502) with interest in the project will be considered. Investor Incentives By the closing date, investors who will have invested will be entitled to the following incentives; Discount or Warrants 26\% Warrant Coverage Stock Options In this case, the firm will increase the authorized pool of available options before the completion of financing in a bid to realize the following total percentage with regards to the unallocated options Total Unallocated options 23\% New options issued in the post money 235,000 Pre and Post-Financing Capitalization (assuming all shares issued) Pre-Financing Type of stock Post-Financing Number of \% Fully Nu mber of \%Fully Shares Diluted shares Diluted 1,560,000 60\% 1,560,000 45\% 338,000 13\% 338,000 10\% 468,000 18\% 468,000 13\% 234,000 9\% 234,000 7\% Series A Pfd Stock 550,000 16\% Warrants 290,000 9\% Common Stock Options Granted Pre-financing Stock Options Avail New Stock Options Total Shares 2,600,000 100\% 3,500,000 100\% Terms of the Series A Stock Liquidation 1x participating preferred. Under the probability of a liquidation, winding up of the firm or in the case of dissolution, the Series A Preferred shall receive an Preference amount equal to one times (1x) the Purchase Price, in addition to any declared and unpaid dividends, before the payment of any amount to any other equity security holders. This aspect will also be replicable in a “Change in Control” scenario, which denotes either a consolidation or a merger (excluding a case where the stakeholders of the firm, own a majority say through voting power of the outstanding shares associated with the acquiring or surviving corporations) and a sale, lease, transfer, or other disposition of all or substantially all of the company’s assets. Afterward, the total earnings shall then be appropriately distributed to each holder of Common and Preferred stock through a converted basis. Dividends Dividends only when declared, and not cumulative. The holders of Series A Preferred will be entitled to receive dividends only when and if declared by the Board and in preference to holders of Common Stock. Voting Rights Except as set forth in “Protective Provisions” below, the Series A Preferred shall vote together with the Common Stock on an as converted to Common Stock basis, and not as a separate class Board Participation The holders of a majority of the Series A Preferred shall be entitled to elect one member of the board of directors, who shall initially be Jonas Jia. Within 30 days of closing, with the agreement of the Series A Jia director, the board of directors shall be 4 members: 1 from management, 1 from Series A, and 2 independent directors acceptable to both common and Series A directors. The Series A director shall be compensated with stock options on a standard basis. D&O Insurance Prior to the closing, the company shall obtain a Directors & Officers insurance policy that is at least $1M. Conversion Rights The holders of the Series A Preferred shall have the right to convert the Series A Preferred into shares of Common Stock at any time. The initial conversion rate for the Series A Preferred shall be 1-for-1, subject to adjustment as indicated below. Automatic Conversion The Series A Preferred shall automatically be converted into Common Stock, at the then applicable conversion rate, upon: (i) the closing of a firmly underwritten public offering of not less than $25,000,000 (before payment of underwriters’ discounts and commissions) (a “Qualified IPO); or (ii) the written consent of holders of the majority of the outstanding preferred stock. Antidilution Rights Broad based weighted average. The conversion price of the Series A Preferred will be subject to proportional adjustment for stock splits, stock dividends, and the like, and to adjustment on a broad-based weighted average basis for issuances at a purchase price less than the then-effective conversion price, subject to customary exclusions. Founder’s Stock Common stock owned by any founder with more than 5\% of the post Right of Repurchase financing equity is subject to the right of repurchase by the company at the lower of (a) the fair market value (FMV) at the time of agreement or the FMV at the time of repurchase; or (b) $0.01 per share (if no FMV has been determined), if the founder leaves the company within the first four years. Such a right expires over four years on a monthly basis after the Initial Closing (2.083\% per month for 48 months). Protective The consent of the holders of a majority of the outstanding Series A Provisions Preferred shall be required to: (i) amend the Articles of Incorporation in a manner that would alter, change, or repeal any of the rights, preferences, privileges or restrictions of the Series A Preferred so as to adversely affect the Series A Preferred (it being understood that the authorization or issuance of shares of a new series of preferred stock that is senior to or pari passu with the Series A Preferred will not be deemed to adversely affect the Series A Preferred if the rights, preferences, privileges or restrictions of the Series A Preferred are not otherwise affected); (ii) increase the total number of authorized shares of Series A Preferred by more than 10\%; (iii) approve a sale or merger of the Company. Drag Along If the Company’s Board of Directors and a majority-in-interest (2/3rds Vote) of the Rights holders of Series A Preferred and Common approve a Change of Control Transaction or issuing New Securities, each Holder agrees (i) to vote all shares held by such Holder in favor of such Change of Control Transaction or issuing New Securities, and (ii) to sell or exchange all shares of Common Stock then held by such Holder pursuant to the terms and conditions of such a transaction Registration Rights The holders of Series A Preferred will be entitled to receive registration rights pari passu with and substantially the same as any registration rights granted to holders of equity securities of the Company in the next round of financing of the Company. Rights of First Offer Keep pro rata share. Each Investor who purchases at least $25,000 of Series A Preferred will have a right of first offer, subject to certain limitations, to purchase its pro rata portion of any new equity securities offered by the Company, subject to standard exclusions. The right of first offer will terminate immediately prior to the earliest to occur of: (i) the Company’s initial public offering; (ii) such time as the Company otherwise becomes subject to the reporting provisions of the Securities and Exchange Act of 1934, as amended; or (ii) a Change in Control. This right expires for any investor who does not exercise this right at each opportunity. Proprietary The Company will cause each person previously, now, or hereafter Information and employed or engaged as a consultant to enter into an acceptable Inventions proprietary information and inventions agreement. Agreements Information Rights The Company will share with the Green Chip Investors (i) audited annual financial statements no later than 90 days after the end of each fiscal year, (ii) unaudited quarterly financial statements no later than 45 days after the end of each quarter and a comparison of such quarters results with the results projected by the Companys annual budget, (iii) unaudited monthly financial statements no later than 30 days after the end of each month and a comparison of such quarters results with the results projected by the Companys annual budget, and (iv) an annual budget for the upcoming fiscal year promptly following approval by the Board. Green Chip Investors will be entitled to standard rights to inspect the properties and the books and records of the Company at reasonable times and upon reasonable notice to the Company. The obligation of the Company to furnish such information and to permit such inspection will terminate at the earliest of such time as the Company consummates a Qualified IPO, becomes subject to the reporting provisions of the Securities Exchange Act of 1934, as amended, or the closing of a Change of Control. Investor’s Counsel Company agrees to pay $5,000 (or $5,000 per each $1M, or fraction thereof, raised) for Investors’ Counsel expenses to review this term sheet and ensure that the final agreement reflects the terms agreed. Redemption Rights After five years, if not previously converted, the Series A Preferred (used only if the Stock is to be redeemed in three equal successive annual installments Company is or might beginning 31st Dec 2021. Redemption will be at the purchase price plus be a “lifestyle business”) a 4-12\% per annum cumulative return. Due Diligence The transactions contemplated by this Term Sheet are subject to the satisfactory completion of due diligence by each Investor. Expiration of Letter: This letter expires at 5 p.m., Pacific Daylight Time, 31st February 2021, unless the Company executes it below and returns an original or faxed executed version to Green Chip Investors by that time. Exclusivity: From the date of acceptance of this Memorandum of Terms until the earliest to occur of (a) consummation of the financing, (b) the formal termination of negotiation by both Green Chip Investors and Company or (c) 31st September 2020, the Company will not directly or indirectly solicit, initiate or participate in any discussions or negotiations with, or encourage or respond to any inquiries or proposals by any persons, company or group other than the Investors, concerning any financing or sale of the Company without prior approval of Green Chip Investors. The Company will promptly notify Green Chip Investors if any person, company or group seeks to initiate any other discussions or negotiations and contemplated in the immediately preceding paragraph, makes any proposal or inquiry, or requests any information with respect to any proposed financing or sale of the Company. Confidentiality: This term sheet is confidential to the parties and is for the use of the Company’s management and their advisors. Accordingly, the information contained in this document may not be disclosed to any third party or used to facilitate negotiations with any third party without Green Chip Investors’ and the Company’s prior approval. Not an Offer This Term Sheet is not a complete description of the financing and does not constitute either an offer to sell or an offer to purchase securities. On Behalf of the Company: On Behalf of the Investors: Name of Company Investor Group (if applicable) Signature Signature Name Name Phone Phone Email Email MGT 187 Lecture #7 © L. Jean Dunn, Jr. 2020 COPYRIGHT • My lectures and course materials, including PowerPoint presentations, tests, outlines, and similar materials, are protected by U.S. copyright and by University policy. I am the exclusive owner of the copyright in those materials I create. You may take notes and make copies of course materials for your own use. You may also share those materials with another student who is enrolled in or auditing this course. • You may not reproduce, distribute of display (post/upload) lecture notes or recordings or course materials in any other way – whether or not a fee is charged – without my express written consent. You also may not allow others to do so. • If you do so, you may be subject to student conduct proceedings under the UC San Diego Student Code of Conduct. The way that seed funding is all about your idea and team, Series A is all about the numbers. Series A Inflection Points a) These goals and objectives need to be set out after the seed round b) Inflection points include: customer acceptance, product completion, revenue goals, etc. c) VC’s are focused on these metrics that de-risk the transaction d) By meeting the goals the company distinguishes itself e) Don’t want to be explaining why you didn’t make the goals f) Normally takes 18 to 24 months to hit goals Series A “If you weren’t embarrassed by the first version of your product you launched too late.” Reid Hoffman - LinkedIn Series A Don’t Hire or Engage an Intermediary – Don’t mass email a) b) c) d) e) f) g) h) i) VCs want to speak directly to the founders Decision to go forward is based on the founders Question why you need an intermediary Existing Angels, lawyers and accountants are acceptable VCs can tell which emails are mass mailings and usually ignore these Each VC should be approached individually No one wants to look at a shopped deal – VCs talk and know If one or more turn it down then everyone walks Control information – Don’t want to hurt chances Series A Timing • • Normally takes 3 to 6 months to complete the financing You should take at least a month preparing Amount Target lower dollar amount – No more than 10\% to 25\% a) VCs want you to manage the business prudently and use less money b) Lower dollar amount means more VCs that could have an interest c) Easy to increase offering, if you go down the question is “Why is it okay now when you want less where before you absolutely needed more?” Series A Fund Raising Objective – Fear of Missing Out a) b) c) d) Traction - Customer acceptance and growth Team Impression – Impression of the CEO Social Proof – What others think Product Normally the VC makes a decision within the first 10 minutes of the presentation Series A Presentation General - No type less than 24 – They need to read it Minimize words on slides – graphics better Avoid industry terms Title Page – Name of company and contact info Do not have a date Problem - This should be on one page Problem should be customer’s #1 concern Not #4 or #10 Series A Presentation Competition Ideal presentation is a graphic Feature table tends to be too detailed Why are you better? What drives the customer to you versus competition? Don’t want to compete on price? Series A Presentation Market Size – Trends Want to see a market of $1 billion dollars What is the total addressable market? Who is the target customer? What are their unique needs or requirements? Evolution of the market Why are we at an inflection point right now? Customer story – Why did they purchase? Ideally rich customers that will pay a premium Series A Presentation Distribution How do we approach and sell the customer? What sales channels do we utilize? How do we measure the cost of acquiring a customer? CAC = customer acquisition cost Business Model How do we generate revenues? Do we have multiple revenue sources? How do we price? How does this affect our market? LTV – PV of future revenues from each customer For LTV calculation LTV is net of COGS or is gross margin Series A Presentation Common metric is LTV / CAC – Measures the revenues generated by a customer versus the cost of acquiring that customer Traction / Milestones Show milestones and that you have hit them Where is the company going in terms of revenues? Where is the company with regards to product? Series A Presentation General Want to sell: Big Problem, Big market, Right Solution Want to be 10x better not 2x – 3x Wait until after Series A to form a Board If you have an Advisory Board they should receive no more than 1\% of the stock Advisory Board members should be investors Series A Presentation Funding Request Capitalization Table Funding request Amount owned by insiders Angels Stock options for employees Be prepared to discuss valuation Series A Common Questions What is the impetus for starting the company? What is the problem you are solving and why? Why are you uniquely suited to solve this problem? Why now? Any recent trends? How did the founders meet and decide to partner? Series A If VC says “no” this means no – don’t ask them to reconsider Don’t ask the VC to refer you to their competitors Don’t give up – Make sure that you raise sufficient Angel money to carry you through if you have to re-market in a year Be frugal Jia 1 Jonas Jia PID: A15733910 9 May 2020 New Venture: Healthy Desserts and Pastries ELEVATOR PITCH It is easy to blame and demonize doughnuts, pretzels, cheesecakes, cinnamon rolls and croissant for ones weight gain. We can satisfy your cravings without feeling guilty for your health. SUMMARY OF NEW VENTURE In this age, people have become more conscious of their health. The market, as a response, flooded people with diet fads, slimming pills, detox programs, and juice cleanse. However, these methods are highly restrictive and deprive people with pleasure. Discipline, which many people lack, is also essential in making such methods work. Desserts and pastries, hailed as high in calories and unhealthy, are demonized by these methods. As such, many health-conscious individuals skip desserts and pastries. They stick to healthy, but less appetizing snacks to curb their appetite. Additionally, most parents refuse to give their children desserts and pastries because too much sugar is detrimental to ones health and may even make children hyperactive. Sadly, these people deprive themselves of gastronomic pleasure. However, people deserve their treats as much as they should enjoy their life. They deserve to indulge themselves in gastronomic pleasure without sacrificing their health. A new venture, focusing on offering healthy desserts and pastries, will allow these people to break free from their dietary restrictions. With the proper healthy alternatives, we can minimize or eliminate the use of unhealthy ingredients without compromising quality. In addition to this, the venture will label the products with their corresponding nutrition facts to allow consumers to make informed and healthy options. TARGET CUSTOMER This new venture has an extensive target customer. The first target customer is health-conscious individuals. They include people who watch their weight or those who strive to get a healthier body. With healthier alternatives, these people can enjoy desserts and pastries without compromising their health and body goals. Another target customer is individuals with r ... Purchase answer to see full attachment