Final report of the group work. Thanks to my teammates Nicolas Cambuzat, Indrit Demiraj and Arnaud Humbert.

1. 1
Group
8
:
Nicolas
Cambuzat
Kévin
Cecile
Indrit
Demiraj
Arnaud
Humbert
ICN
Business
School
Year
2013/2014
Anglo-­‐Saxon
Project
Management
|
Final
proposal
|
HelpU$Grow.com

2. 2
Table
of
content
I/
Business
Objective
..............................................................................
3
II/
Description
of
Activity
and
Service
............................................
3
III/
Project
timing
.....................................................................................
4
IV/
Target
Country
&
Customers
.......................................................
5
V/
Strengths
and
weaknesses
of
the
market
................................
7
VI/
Market
studies
/research
undertaken
..................................
13
VII/
Marketing
strategy
......................................................................
15
VIII/
Financial
plan
:
.............................................................................
16
IX/
Sources
:
………………………………………………………………….21

3. 3
I/
Business
Objective
We want to build a new firm, located in the USA, with great ideas and
innovatory aspirations. We want to create a circle with as many businesses as
possible. These businesses will try to cooperate and why not help each other. In this
way we will be able to help and give an opportunity to the firms and destroy old-
fashioned barriers of making businesses. We expect to make profit within the first
year but we can patient and wait enough time to get our profits because first we want
to create this network which is our first objective.
For a crowd funding website like HelpUsGrow.com, popularity is important because
this is what will increase our number of companies and investors. Our objective is to
have traffic of 5,000 visitors on our website per day. And in the long term we want to
attract up to 200,000 visitors per day. We have decided to target this figure, after
comparing to our competitors on crowd funding market.
In terms of financial objectives within the first four years we see rational to put our
yearly growth income at $300,000. We based our goal on how much money can be
transferred on our website every month (with a 5% fee, if each month $500,000 is
being transferred through our website $300.000 per year is an achievable goal). We
also plan to make money using advertising on our website (with ad revenues of $15
for every 1,000 page views which would represent between $27,000 and $1,080,000
depending on traffic).
II/
Description
of
Activity
and
Service
We are four young entrepreneurs trying to fulfill our American dream, but we
still have a French background and we want to keep the risk to a minimum. This is the
reason why we choose an LLC (Limited Liability Company) for our corporate
structure. Which means the four of us will be considered as partners in the company
and in case of debt or bankruptcy we won't be personally responsible and the potential
lack of solvency shall only be limited to what we have put in the company (liquidity,
software, patents, infrastructures, etc.)
We have had the idea to elaborate a service based on crowd funding,
addressed to companies which are asking for money and looking for investors. We
will select the companies we work with very carefully, we have a bunch of criteria
that the companies need to satisfy before entering our data base: they need to be
active and profitable for over two years and they have to have very little debts (10%
max of the past year revenue). Those criteria are very important for us, and the
potential investors on our website, to minimize the risk of investing. We offer
companies the possibility to fund a project for their business; it can either be a better
marketing plan or a change of infrastructure that would help them reduce their
production, manufacturing or distribution cost. We don’t want to find new ideas but
we want to help companies that already have a stable business and help them grow
through a solid long term plan. The companies will then evaluate how much money
they need to fund their project in exchange for a percentage of equity stakes of the
company. For example a CEO evaluates his company at $1,000,000 and he thinks that

4. 4
a $100,000 investment will help his company grow, he then comes on our website and
ask for $100,000 in exchange of 10% equity stakes in his business. Our website
provides potential investors to companies and potential companies to investors. We
also provide companies with the expertise of our great partners: a world renowned
communication agency Mindshare as well as a consulting agency, which will help the
companies in their decision process.
The two main points are the following:
1. This website is overall, an original system of investment. Instead of the
traditional way of investing (bank loans or any kind other of investors like
business angels), we had the idea to create a system of investment with people
coming from different social background. Actually, the aim is to bring a lot of
people who will buy coupons (in order to be a little bit more competitive we
chose to fix the minimum coupon at the price of $20, which is a bit lower than
our competitors in order to enlarge the capacity of investors) which will
provide the funding of the company. Those coupons will, once the raising is
completed, translate into shares in the company.
2. The second point to develop is partnerships. First with a
Marketing/Communication agency (Mindshare, which is part of the WPP
group). And secondly with a consulting agency. On the one hand, it will be
profitable for us regarding our own communication. On another hand, the idea
is to really differentiate our service against the potential competitors. We will
pay a fix fee to those agencies for their services of $5,OOO per month. But we
will negotiate an intermediate fee for every transaction if our companies end
up doing further deals with our partners.
III/
Project
timing
The development of our project is expected to take six months at a minimum.
The timing is not related to financial delays. We need time to execute a marketing
plan and ensure a necessary level of awareness of our company.
!
!
Investors!
Helpusgrow+
Companies!!
X!amount!
X!amount!from!investor!
Profit!
generated!
20%
!
80%!

5. 5
IV/
Target
Country
&
Customers
We plan to launch this service in the USA. We decided to locate our offices in
Austin, TX because it is known as the 3rd best city to start a business in the United
States. Although Austin is one of the most liberal cities in America, with one of the
biggest universities in the country, it belongs to a Republican state and we will benefit
from its low fiscal duties. Also the rent prices for office space will be much cheaper
than in any other big cities on the East Coast. For example, a 800sqft office, which is
in a very good location will cost us around $800/month. Considering the previously
mentioned targeted customers, we hope to attract as many investors as possible and of
course, companies. In order to do so, we will charge a very low rate over every
transaction: 5%.
As a consequence, by all this diversity we propose, companies must be interested in
“HelpUsGrow.com”. Therefore, if companies are interested and there are a lot of
demands, there will also be a lot of investors interested. More companies will get in
touch with us, more investors will pay attention to this service.
In concrete terms, the customers we are looking for are:
1. On the one hand, “wanna grow” companies with high potential. So, we will
accept demand from small but big companies as well. We choose to focus our
service on the companies being already developed, but which would like to
increase their turnover and improve their performance by launching a
communication plan. By integrating another branch to this service (a
partnership with a famous advertising agency), we plan to attract companies
which can not afford that kind of agency without crowd funding.
2. On the other hand, we need to attract a maximum of investors. As we said
before, they must be attracted by the very low rate we will charge. The
advantage is that we don’t have a lot of competitors. It is mainly banks and
some websites like “GiveForward” which provides a service a bit similar to
ours.
Also, the only question is: will the investors choose Banks or “HelpUsGrow” to
invest their money? By describing all these advantages we have over our competitors,
it seems that our service should be more interesting for both parties. With a good
communication plan showing our assets (proximity, low rate, security and diversity),
we should be able to bring a lot of customers to make it work.
To conclude, let’s have a quick look concerning the Hofstede center which mainly
based our motivation on targeting the USA to develop and implement our service.
Indeed, it is important to evaluate the cultural and civilization context in order to
create a service which respects the way of living of its customers.
As a consequence, it turned out that the USA came as the ideal country to implement
HelpUsGrow:
First, one of the most important criteria for this kind of service is definitely the
“uncertainty avoidance” which revolves around a society which deals with the fact
that the future can never be known. In concrete term, are American people worried
about the future or not?
We can notice the score relatively low concerning America. This is a very
good point since it means that American people are willing to discover new things
and innovation is well perceived. But more importantly, American people are not
afraid about future, as a consequence they are not afraid of investing and this is the

6. 6
key point on which our service is based on. The less people will be reluctant to the
idea of investing, the more customers we will have.
Eventually, the more investors we have, the more companies will be interested
to come and see Helpusgrow in order to improve their potential.
The very high individualism combined with the fairly low score of power
distance result of the following characteristics:
-Again we have a proof that American culture paves the way to investment
because this shows that American people are focused on their own profits, they like
challenges and are willing to take risk in order to generate money.
-They are not afraid about external constraints they look after themselves only
and do not rely on external factors so nothing will influence the investors to fund a
project or not.
-The main characteristic of being individualist can be translated as the fact of
not being shy but rather open-minded. American people are curious and interested in
everything. These criteria can be both applied for an organization which would like to
go further by improving their communication plan or for investors to look for “good
plan” and innovative creation leading to a safe investment.
A fairly high masculinity (62) reveals the importance for people or
organization to achieve their goal, looking for winning and facing challenges. This
implies for all companies to act through a “best-in-the-field” spirit. As a result, all
kind of companies even those with already a comfortable place yet are always seeking
to be the number one and are not afraid to launch new products or new services in
order to improve even more their competencies. Thus, it asks investments that
Helpusgrow will be able to bring them and lead them to success.

7. 7
V/
Strengths
and
weaknesses
of
the
market
External
analysis
1) Market Analysis
To our company HelpusGrow.com the main market is crowfunding.
Crowdfunding is a method to raise money using the Internet and serves as an
alternative source of capital to support a wide range of ideas and ventures
a) Size of the market
• Crowdfunding websites helped companies and individuals worldwide raise
$0.89 billion from members of the public in 2010.
• In 2012 there were more than 1 million individual campaigns globally.
• In 2013 the industry is projected to grow to $5.1 billion. (from which $1.6
billion was raised in North America.
b) Structure of the market
Crowdfunding is an open market that means there are few barriers to entry
and we can enter easily. It is also a fragmented market that is to say that
there is a lot of company in the market with small market share.
c) Life Cycle
We can say that crowndfunding market is in the growth phase, so the profit
should increase.

8. 8
Macro-­‐environment
analysis:
PESTEL
Opportunity
Threat
Political
Crowdfunding Tax:
And in the USA each State has
its own Tax
economic
Financial crisis-> banks are
disclinided to loan money to small
businesses
Social-­‐cultural
People are use to pay on internet,
and now through mobile device
(smartphone, tablet)
Conflict of generation: not all
entreprenors won’t be inclined
to use our websites because of
the fact that their generation
won’t trust our funding system.
technology
The use of Internet, mobile
technology, and social media is
increasing.
Security is a threat, no company
is sheltered from hacking.
Environmental
Legal
Rules on Crowdfunding for Security
Offerings:
The idea behind the crowdfunding
security exemption in the JOBS
Act is to allow private companies
to raise relatively small amounts
of capital from a large number of
investors without having to
register the securities issued with
the SEC or under state blue sky
laws. The proposal would let
businesses use the Internet, mobile
technology, and social media to
raise up to $1 million a year from
investors via crowdfunding. Under
the JOBS Act, the SEC is required
to adjust the $1 million dollar
amount every five years to reflect
changes in the Consumer Price
Index.
Under current U.S. federal law,
the sale of securities to the
public as an investment is
regulated by the Securities and
Exchange Commission (SEC),
and it is illegal to receive a
payback on an investment
unless the company is approved
by the SEC.

9. 9
Microenvironment analysis: Porter
five
forces
analysis
a) Competitors
Kickstarter Kickstarter is a website where creative projects raise donation-
based funding. Kickstarter is one of the earlier platforms, and has
experienced strong growth and many break-out large campaigns
in the last few years.
Indiegogo Indiegogo approves donation-based fundraising campaigns for
most anything — music, hobbyists, personal finance needs,
charities and whatever else you could think of (except
investment). They have had international growth because of their
flexibility, broad approach and their early start in the industry.
Crowdfunder Crowdfunder is the crowdfunding platform for businesses, with a
growing social network of investors, tech startups, small
businesses, and social enterprises (financially
sustainable/profitable businesses with social impact goals).
Crowdfunder offers a blend of donation-based and investment
crowdfunding from individuals and angel investors, and was a
leading participant in the JOBS Act legislation.
RocketHub Rockethub powers donation-based funding for a wide variety of
creative projects.
Crowdrise Crowdrise is a place for donation-based funding for Causes and
Charity. They’ve attracted a community of do-gooders and and
fund all kinds of inspiring causes and needs.
Somolend Somolend is a site for lending for small businesses in the US,
providing debt-based investment funding to qualified businesses
with existing operations and revenue. Somolend has partnered
with banks to provide loans
appbackr Appbackr is a website that raise donation-based funding to build
the next new mobile app
AngelList AngelList is website that raise donation only given by accredited
investors and institutions, business angel
Invested.in Invested.in is a website that raise crowdfunding in order to create
crowdfunding websites that raise money for for a specific group
or niche in the market.

10. 10
Quirky Quirky is a place to collaborate and crowdfund for donation-
based funding with a community of other like-minded folks. Their
site digs deeper into helping the process of bringing an invention
or product to life, allowing community participation in the
process.
Collaboration on the web is an area of exponential growth. It is attracting a lot of
small companies. We can notice that in the crowdfunding there are 2 types of
crowdfunding,
• The first is what’s called donation-based funding. The birth of crowdfunding
has come through this model, where funders donate via a collaborative goal
based process in return for products, perks or rewards.
• The second and more recent model is investment crowdfunding. In this
model, individuals who fund become owners or shareholders and have a
potential for financial return, unlike in the donation model.
b) Threat of new entrants
We can notice the threat of business angels who open crowdfunding websites, they
are threatening because they are accredited investor, so they have credibility and if a
promising project doesn’t raise enough money through crowdfunding they can
complete to achieve the project, that’s reassuring for entreprenors and will attract
clients.
What’s more, we can see that a lot of start-ups are entering the crowdfunding market
because of the money
C) Bargaining power of suppliers
We don’t have suppliers, but a partnership with Mindshare, and according to size of
their company, they have more power than us in negociation. But we have some
power because we brought clients to them, and those clients can not afford to work
with mindshare, and would have go see a Mindshare’s competitors.
D) Bargaining power of customers (buyers)
Our clients have a strong power of negociation because they can easily choose to go
on another crowndfunding website. Today with the easy acces to internet in the
United Sates of America, most of the crowdfunding websites are accessible.
E) Threat of substitute products or services
Our biggest threat is loan from banks because it is the main substitute service for
funding. Funding service is a very old service, and banks are the main actors, so with
our new kind of funding are not that well-known outside the youth generation who
grew up with internet.

11. 11
Crowdfunding, is an innovative capital formation strategy and investment
possibility, has both supporters and skeptics. In order to evaluate the new
phenomenon of crowdfunding, a qualitative evaluation is invoked. SWOT analysis is
a powerful qualitative research tool, which serves for gathering information and
decision-making. SWOT analysis not only diagnoses past and present condition, but
also gives us a vision about the future, ability to outline development perspectives. As
crowdfunding is very new and rules regarding it are still being set, SWOT analysis
can help to understand and position the method with regards to others and avoid
mistakes. The application of this tool is based on distinguishing the strengths and
weaknesses of crowdfunding and, respectively, the opportunities and threats.
Strengths Weaknesses
Accessibility of capital Only internet based , lack of advise
Benefits for communication through both
local and global means
Ideas and business models presented can
easily be stolen
Ability to test a market – we can measure
the potential for a successfully start up
based on public response
Weaker investor protection and potential
for fraud
Gives more control to entrepreneurs We should consider the administrative and
accounting challenges .This challenges
include a precise bookkeeping of all
investments and shares
Getting people emotionally in what we do
Opportunities Threats
Social network for promoting, and
possibility to couple with crowdsourcing
The risky nature of small business
A niche investment opportunity / way to
rise a capital
Current legal restrictions are suitable for
equity crowdfounding
Low barrier of entry Current legal restrictions are suitable for
equity crowdfounding
The Possibility to create a new service and
the license that would go with it, that
secure our business for a certain period of
time
Bank competitors

12. 12
SWOT analysis, notions to be explained:
Strengths are distinctive features of crowdfunding and advantages of using it in
comparison with other means to raise capital or invest.
Weaknesses are negative features and the features the method is lacking in
comparison to other ways to raise capital or invest. Weaknesses are also of internal
origin.
Opportunities represent the attributes of the environment that can be exploited in
order to improve the method or increase the use of the method.
Threats are exposures to negative elements of external origin harmful to the method
and decreasing its performance.

13. 13
VI/
Market
studies
/research
undertaken
Market search for crowd funding:
• History:
An early form of the crowdfunding business model was Praenumeration, a
Subscription business model, which was used in the 17th century to finance book
prints. Similar to crowdfunding an additional benefit to donors was offered.
The United States based company ArtistShare referred to as "a pioneering crowd-
financing platform" was started in 2001, followed later by sites such as EquityNet
(2005), Pledgie (2006), Sellaband (2006), IndieGoGo (2008), GiveForward (2008),
Kickstarter (2009), RocketHub (2009), Fundly (2009), GoFundMe (2010), Appsplit
(2010), Microventures (2010), and Fundageek (2011).
In the film industry, independent writer/director Mark Tapio Kines designed a website
for his then-unfinished first feature Foreign Correspondents in 1997. By early 1999,
he had raised more than $125,000 over the Internet from at least 25 fans, providing
him with the funds to complete his film. Franny Armstrong later created a donation
system for her feature film The Age of Stupid. Over five years from June 2004 to
June 2009 (release date) she raised £1,500,000. In December 2004, French
entrepreneurs and producers Benjamin Pommeraud and Guillaume Colboc launched a
public Internet donation campaign to fund their short science fiction film, Demain la
Veille (Waiting for Yesterday). Within 3 weeks, they managed to raise $50,000,
allowing them to shoot their film.
Adopt-A-Classroom, founded in 1998, is documented as the first crowdfunding
website for education. According to Wordspy, the earliest use of the word
"crowdfunding" was by Michael Sullivan in fundavlog in August 2006.
The most successful crowd funded project to date is Star Citizen, an online space
trading and combat video game being developed by Chris Roberts and Cloud
Imperium Games, which as of 23 November 2013—claimed to have raised
US$30,044,586, beating the previous record of US$10,266,844 set by Pebble Watch.
On March 7, 2013, the crowdfunding site Chipin.com was shut down by InMobi.
Crowdfunding websites helped companies and individuals worldwide raise $0.89
billion from members of the public in 2010, $1.47 billion in 2011 and $2.66 billion in
2012. In 2013 the industry is projected to grow to $5.1 billion. (from which $1.6
billion was raised in North America). In 2012 there were more than 1 million
individual campaigns globally.[29] In 2013 the industry is projected to grow to $5.1
billion.

14. 14
• Competitors:
1. USA: The first portal operating in the U.S. and geared towards small
businesses was founded in 2010 by Alejandro Cremades and Tanya Prive and
is operating under the name of Rock The Post. Other companies that offer
crowdfunding services in the U.S. are The Soho Loft and Wefunder.
2. UK: Abundance Generation was the first regulated crowdfunding platform in
the United Kingdom (UK) to be regulated by the Financial Services Authority
(now the Financial Conduct Authority). It was approved in July 2011 and was
launched to the public in 2012. Abundance Generation provides debt finance
to UK-based renewable energy developers. On 6 July 2012, Seedrs Limited
was launched as the first equity crowdfunding platform to have received
regulatory approval in the UK from the Financial Services Authority (FSA). In
August 2012, Richard Branson announced his support for crowdfunding,
crowdinvesting and crowdlending platform BankToTheFuture.com in the
Telegraph newspaper. In February 2013, the CrowdCube crowdfunding
platform, which was launched in 2011, was authorised by the FSA.
3. Canada: Although Canada has its own crowdfunding portals, none of these
currently allow equity crowdfunding. In June 2013, the Ontario Securities
Commission announced that it was allowing an Ontario-only portal for
accredited investors.

15. 15
VII/
Marketing
strategy
The main objective of our marketing strategy is to reach potential investors, because
we feel that the companies we want to promote on our website will be much easier to
attract. For the companies there is no risk involved so we want to focus our limited
marketing budget towards educating potential investors on the long term benefits. We
will define our marketing success through our KPI (Key Performance Indicator),
which will be increase in traffic to the website.
Our target audience would be divided in two:
1. Low level investors, most likely students, young adults and middle class
people who are looking for a new and safe opportunity to invest their money
with a higher reward than the traditional ways offered by banks like low
interest reward saving accounts.
2. High level investors, high class people looking to invest a lot with a minimum
risk and a high reward.
Even though our website will be reaching locally based investors interested in helping
close by companies, we need our marketing plan to be seen nationwide. We need as
much exposure as possible in order to reach our numbers.
We plan to be very active on several media; we want to adjust our marketing plan to
the US market. The most accurate plan would be to divide our budget with the
different media:
50% on digital ads, 20% on TV spots, 20% on magazines and 10% on radio and
billboards.
We plan to invest around $50, 000 per trimester on all our media coverage. By using a
crowd communication we will attract a bigger audience.
The success matrix of our marketing plan would be based on the traffic on the
website, within six months we would like to have a minimum of 5,000 visitors on our
website per day.
To
summarize
a
good
marketing
strategy
for
our
crowd
funding
website
we
need
the
famous
four
P’s
of
marketing
mix,
four
P’s
know
as
Product,
Price,
Promotion
and
Place.
i. Product:
we
offer
a
service
that
will
help
companies
fund
their
project
and
we
offer
project
investable
in
for
potential
investors.
ii. Price:
our
service
will
not
have
a
fixed
price
but
will
depend
on
the
different
transactions
made
on
the
platform
and
we
will
get
a
low
percentage
of
those
transactions.
iii. Promotion:
we
plan
to
divide
our
marketing
budget
on
different
media
channel:50% on digital ads, 20% on TV spots, 20% on magazines and 10%
on radio and billboards.
iv. Place: we want to reach as many customers as possible all over the United
States but our main targeted place will be the web.

16. 16
Due
to
the
specialiazed
market
we
are
jumping
in
the
original
four
P’s
will
not
be
as
relevant
as
we
would
hope.
That
is
the
reason
why
the
Crowdfunding
world
has
its
own
four
P’s:
• Passion (Excitement): We want our investors to feel personally part of the projects
they invest in. The passion is indeed needed.
• Perks (“Thanks”): Perks are often very individual and depend heavily on the
subsequent product or service.
• Participation : It is important that the investors are actively involved in the project,
and it’s crucial that you make it clear that success can be achieved only through
them.
• Pride (pride) : In a sense, you give people the chance to participate and create
something through you and your project.

17. 17
VIII/
Financial
plan
:
In this section we will first list the different costs that we anticipate for our project.
Second, we will explain the ways in which we think we will finance our project
initially and finally we will explain the profits schedule we have decided.
1. Costs:
• Human Resources
We need to have the right human resources when creating a project for a company.
The people are the main factors in these cases. In our company we will be four
people. One of us will be the Director or General Manager of the company. One will
be the Finance Manager, one the IT Manager and one the Marketing Manager. We
will not need money to pay ourselves initially because we are the people undertaking
this initiative. So there are no salary expenses.
• Office
We will need an office where we will work together and we will have meetings and
other common office activities. As we previously mentioned, a suitable office for us
in Austin, TX will cost about 800$/month rent.
• Marketing
It is true that we will have a Marketing Manager that will be one of us and he does not
need any salary. But, we need money to finance our advertising campaign with all the
kind of advertising instruments that may be possible. These may be Online
Advertising, Cell Phone and Mobile Advertising, Outdoor Advertising, Print
Advertising and a lot of other forms. All these need a certain and considerable amount
of money.
• Website and Software
The main part of our project is the virtual place, which will be our website. The
website will be created by the IT Manager who will be one of us. In this way we will
not have any costs of monetary nature. On the other hand, there may be need of
certain complicated software packages to build our website and to run our business.
These software packages may be necessary to be bought. So we may have some costs
in this field.
• Legal
Since we will create a company, we will need to register it in USA and make it legal.
For these purpose we have to pay the according fees and tax duties, Also we need to
take the right business operating license according the USA law.
For all these previously mentioned issues we need some money.

18. 18
2. Financing:
After considering all the sources of costs and explaining them related to our project,
we need to make a plan about how will we finance this project and the previously
mentioned costs. We have considered the internal and also the external financing for
our purpose.
• Internal Financing
We will invest our own capital in this company. We will invest first our knowledge,
our time and our competencies. Second we will invest all our electronic devices like
computers etc. Finally we will invest a small monetary amount from our own savings
and from the help of our parents or friends who believe in us and want to encourage
us. Of course, this will be a modest monetary amount.
• External Financing
It is very difficult to find external sources of financing. Especially in our case because
we are students and we do not have anything to use as collateral. But, there are some
alternatives that are worth considering and fighting for. We can get in contact with a
bank and ask them for a loan. Our project is really good and we believe in it so we
will make them to believe too in our project and help us. The United States has a
financial market where are operating a lot of foreign and local banks and other
financial institutions of different forms so there are a lot of financing opportunities
available.
3. Profits:
We explained the costs and the sources of financing that we need in the initial steps of
our project. But during the operation of our company we will need some profit to be
able to pay our maintenance costs, our Advertising contractors and also to pay our
debt interests or to pay the share of the venture capitalists that helped us. In addition,
we also need to have a profit for ourselves that we may decide to reinvest it or to
retain it. At the end, the purpose of every project is to get some profit back. We
expect to get back a profit of 5% initially in the first year of our project.

19. 19
Expenditure:
Human
Resources
$0. We will be the only staff members. We don’t need anybody else
at the beginning.
Office $800/month. Rent.
Marketing $50,000 per trimester
Website and
Software
$5,000 for the infrastructure website by choosing the software
“Crowdvalley”.
Legal A $20 reporting fee and a statement of information are required 90
days after formation and then every two years. An annual $800 LLC
tax is due 75 days after formation and every year thereafter. There is
a minimum annual fee of $865 if the LLC's net income exceeds
$250,000.
External
financing $70,000 with 3.3% interest rates for 10 years (bank loan)
4. Cash flows Model:
This
is
a
simple
model
created
by
us
that
tries
to
predict
the
cash
inflows
and
outflows
of
our
business
and
predict
a
rate
of
return
for
it.
The
model
is
a
ten
years
model.
The
amounts
of
money
are
in
thousands.
We
do
not
take
into
account
the
tax
on
profit
or
income.
We
calculate
only
until
pre-­‐tax
but
we
include
some
legal
spending
that
we
will
have
as
a
LLC
company.
The
idea
behind
the
model
is
based
on
similar
models
from
similar
online
crowd
funding
platforms.
The
model
is
a
linear
model
and
does
not
take
into
account
any
extreme
scenarios.
So,
first
we
create
a
system
to
find
the
amount
of
financing
that
we
will
need
and
have
every
year.
For
this
I
have
used
this
kind
of
logic:
We
expect
to
have
600
requested
deals
in
the
first
year
from
600
companies
and
this
number
will
increase
by
10%
from
year
to
year.
We
will
accept
only
5%
of
the
requests
for
help
from
different
companies.
This
is
because
we
will
need
to
select
the
companies
very
carefully
since
we
should
offer
to
the
investors
secure
and
serious
investments.
The
percentage
of
the
received
deals
that
we
will
approve
is
called
the
curation
rate
and
in
our
case
is
5%
because
that
is
the
average
in
these
kinds
of
platforms.
But,
there
is
no
guarantee
that
all
of
the
deals
that
we
chose
will
be
funded.
On
average
80%
of
the
listed
deals
is
funded
and
the
average
transaction
size
for
each
deal
is
$200,000.
We
expect
the
transaction
size
to
increase
by
5%
from
year
to
year.
By
multiplying
the
funded
deals
with
the
average
transaction
size
for
each
year,
we
find
the
total
funding
for
each
year
which
will
come
from
our
online
investors.
We
will
start
with
a
funding
of
$4,800,000
to
$17,670.000
after
ten
years.

20. 20
After that we will calculate the total cash inflows for us. The first year will be a
holding period which means that we will not take any cash from the funds we have
collected from the investors. One year after we expect the total cash return to be 3
times the funding of the previous year ($14400=$4800*3). This is an average
coefficient of return for crowd funding online platforms. So the total capital gains will
be $14400-4800=$9600. The amount of cash that we will carry for us is 20% of the
capital gains $9600*20%=$1920. The other 80% of the capital gains will go back to
the investors and for new funding.
Now we add to the total cash in of every year the income from the advertising. We
believe that we will have 500 visitors per day in our platform which means 180,000
visitors per year. We receive $15 for 1000 visitors so it means we will approximately
have $2,700 every year from advertising.
Visitors/day
500
Visitors/year
180000
Advertising
revenues
2.7

21. 21
We calculated the total cash inflows and now we need to calculate the total cash
outflows. We will have $800 expenses every month for the rent which means we will
have $9,600 every year rent to pay. In the first year we will need to buy the software
which costs $5,000. We will have to pay $5,000 per month form Marketing,
Communication and Consulting Agencies. Legal expenses include the tax fee and the
registration fee for LLC companies. Interest and capital payments are for the $70,000
loan that we will take with an interest rate of 3,3% for 10 years. I have assumed a
linear amortization of the loan for simplicity. The sum of all these expenses gives us
the total cash outflows for each year.
The only thing that we need to do now is to find the net cash flows for each year. We
see that we have a negative flow of $79,951 in the first year and we get a positive
cashflow of $5,942,184 in year ten. Which gives us a return on investment about
approximately 71% =($5,942,184- $82,651)/$82,651.This return is without taxes. As
you can see there are no negative net cashflows during this ten years period after year
1.

22. 22
Sources:
http://www.entrepreneur.com/slideshow/226485#8
http://austin.craigslist.org/off/4239732480.html
http://www.forbes.com/sites/ryancaldbeck/2012/12/11/crowdfunding-predictions-for-
2013/
http://www.forbes.com/sites/deborahljacobs/2013/04/17/the-trouble-with-
crowdfunding
http://www.afr.com/p/markets/capital/crowdfunding_the_threat_for_bankers_v2USe2
vmr9geskvkyIFYsL
http://www.investopedia.com/
http://geert-hofstede.com/united-states.html
http://crowdfundhq.com/why-you-should-start-a-crowdfunding-platform.html
http://www.entrepreneurs-journey.com/105/making-money-from-your-website-using-advertising/
http://www.whiteboardmag.com/the-four-ps-of-crowdfunding-how-to-get-people-to-commit-to-your-
idea/
http://biztaxlaw.about.com/od/financingsources/a/Crowdfunding-Legal-Issues-For-
Small-Businesses.htm