Over the last two weeks I have been working on the competitor / acquisition analysis for our funding plan.
The interesting aspect of our business sector is that the market is highly fragmented. We have hundreds of small players, facing limited growth opportunities beyond their niche product. The larger competitors are Chinese government affiliated and there is heavy association with weak organization and strategy. Chinese media players typically have issues achieving critical mass and exiting via public markets due to limited size / scope. This context lends us an attractive opportunity for consolidation, given our market positioning. Furthermore, as we sharpen our acquisition platform, we can virtually guarantee that a targeted acquisition's cost structure will be reduced when integrated. We can also push the acquisition's sales products through our national network. In return, we share the management infrastructure to more rapidly achieve critical mass and market influence.
My focus at the moment is on niche assets in our targeted verticals: Nutraceuticals and Biotech. Our previous round of funding involved the acquisition of a pharmaceutical research firm which completed our company's ability to serve all aspects of the pharmaceutical supply chain.
The key issue behind the acquisition analysis is to explain to potential investors the strategic reasoning for targets for our acquisition / consolidation platform. Hence I have to analyze company products as well as various key metrics to determine suitable targets. In the coming weeks, I will evaluate whether the target(s) will help us reach critical mass, i.e. enough interest generated for an IPO.
Monday, May 17, 2010
Tuesday, May 4, 2010
First Steps
The business plan is a work in progress...
That being said, I am tasked with tackling the first version of it. At the moment we are creating the outline and drafting in prototype wording. The following is an extremely high level overview:
1) Market Overview
2) Who we are
3) 'xy' (our project)
4) How 'xy' will work
5) Financial model
6) Milestones
7) Management Team
8) Exit Strategy
The 'Market overview' is a justification of the reasoning behind our project ( and our requirement of expansion capital). This justification is achieved via analysis of the market potential for our project. This area is important because investors are looking for maximized returns on their investment. Investing in a company always bears some form of risk, hence we need to portray the reward potential for our would-be investors.
The 'Who we are' section is fairly simple on the surface, however, it needs to successfully distill the essence of what the company is into a few pages of the business plan. In this case, our company offers various media / marketing materials in online / offline formats. The end result is to create a 360-degree platform for marketing in the Chemical industry. How is each product important? How does it contribute to the 360-degree platform? How can I explain this to investors without having their eyes cloud over? I have reached the intersection of business analysis and creative writing and it is tricky to navigate.
The 'xy' section is a description of our project and how it will fit into our platform. It is the 'Big Idea' explained for our potential investors.
The 'How 'xy' will work' section will be the area heavily scrutinized by the venture capital firms. We introduced the Big Idea in the previous section, but the question of how we will manage it once financing is achieved is a wholly different beast. Benchmarks must be formed in order to gauge progress. A clear description of the implementation process will be explained.
The 'Financial model' section is a summary of the inputs utilized and the resultant numbers. It is a dry explanation but it explains our assumptions in the financial management of the project and why the financial return is as such.
The 'Milestones' section describes the achievements we have garnered via our past round of Series A financing. It will also be utilized as a gauge of progress for investors in this current round of financing.
The "Management Team" section will describe the people leading the company. Each management person will have a short Curriculum Vitae describing their previous business experiences. Focus will be placed in relevant industry experience and previous experience with managing start-ups and handling VC fund-raising.
The "Exit Strategy' section describes how the investors will recoup their investment. This could be from either an IPO, secondary buyout, etc..
I will be working on this first draft, coupled with a Needs analysis and input from my higher-ups over the coming weeks. The aforementioned sections may be added upon or cut out when the final product is rolled out.
That being said, I am tasked with tackling the first version of it. At the moment we are creating the outline and drafting in prototype wording. The following is an extremely high level overview:
1) Market Overview
2) Who we are
3) 'xy' (our project)
4) How 'xy' will work
5) Financial model
6) Milestones
7) Management Team
8) Exit Strategy
The 'Market overview' is a justification of the reasoning behind our project ( and our requirement of expansion capital). This justification is achieved via analysis of the market potential for our project. This area is important because investors are looking for maximized returns on their investment. Investing in a company always bears some form of risk, hence we need to portray the reward potential for our would-be investors.
The 'Who we are' section is fairly simple on the surface, however, it needs to successfully distill the essence of what the company is into a few pages of the business plan. In this case, our company offers various media / marketing materials in online / offline formats. The end result is to create a 360-degree platform for marketing in the Chemical industry. How is each product important? How does it contribute to the 360-degree platform? How can I explain this to investors without having their eyes cloud over? I have reached the intersection of business analysis and creative writing and it is tricky to navigate.
The 'xy' section is a description of our project and how it will fit into our platform. It is the 'Big Idea' explained for our potential investors.
The 'How 'xy' will work' section will be the area heavily scrutinized by the venture capital firms. We introduced the Big Idea in the previous section, but the question of how we will manage it once financing is achieved is a wholly different beast. Benchmarks must be formed in order to gauge progress. A clear description of the implementation process will be explained.
The 'Financial model' section is a summary of the inputs utilized and the resultant numbers. It is a dry explanation but it explains our assumptions in the financial management of the project and why the financial return is as such.
The 'Milestones' section describes the achievements we have garnered via our past round of Series A financing. It will also be utilized as a gauge of progress for investors in this current round of financing.
The "Management Team" section will describe the people leading the company. Each management person will have a short Curriculum Vitae describing their previous business experiences. Focus will be placed in relevant industry experience and previous experience with managing start-ups and handling VC fund-raising.
The "Exit Strategy' section describes how the investors will recoup their investment. This could be from either an IPO, secondary buyout, etc..
I will be working on this first draft, coupled with a Needs analysis and input from my higher-ups over the coming weeks. The aforementioned sections may be added upon or cut out when the final product is rolled out.
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