Faqs
Do you have Financial projections available for review?
Of course! Extensive! Projections include a 5yr P&L (for both TAM & TM), Sales Forecasts, Cost Assumptions for Development/Production/Certification/Manufacturing/Scaling etc. I will gladly provide to ensure I have done my due diligence and you are comfortable.
What type of incorporation is your business?
Currently, LLC as I wanted the best tax structure for myself starting out. However, I do realize I will have to change my structure or create a pass-through entity to allow for institutional investment (i.e. Series A/B/C).
Okay, I'm convinced! What capital funding vehicles are we going to use?
Congrats! You made the right choice to invest in scorEEagle! I am flexible but my preference is to use either convertible notes or Simple Agreements for Future Equity (SAFE) notes. I like "SAFE" notes as it is similar to a convertible note, but isn't considered a debt instrument.
You keep saying your business should have a Unicorn designation... Prove IT!
Sure thing, Absolutely I Do! Let's take the Venture Capital Method made popular by Harvard Business School Professor Bill Sahlman as our guide. Said formula for valuation is (Terminal Value/ROI) - Investment amount. So, let's unpack this as we need 1. Terminal Value, 2. ROI, and 3. Investment amount. 1. Terminal Value = projected revenue * projected margin * Industry P/E. [$981.113MM * 40.11% * 81.4 = $32.036BN]. 2. Expected ROI = 20x. 3. Investment amount = $2MM. Now, pre-money valuation = ($32.036BN/20) - $2MM = $1.599BN