Friends:
I have got a business model which could involve the participation of a
lot
of people to make it mutually beneficial. I am presenting a similar
model
for discussion purpose and to get your ideas and feedback
Scenario :
1) We are an Internet startup company with angel funding.
2)Let us assume that we are in the business of laying good roads and our
model requires lot of cars - to test market the kind of road that we
are
making for practical field applications.
3) The beta testing of this road has been done to prove its efficacy.
4) with our funding we have been able to put together say about 100 cars
to
prove the model works.
5) Now is the question of scalabality of the model. Naturally the
question
that would come to one's mind is that if the model works then why is the
VC
not interested to scale up the model - since it would be a win win
proposition for the VC.
But since this project is infrastructure active (employing the need for
lot
of cars) the scope of the VC (in a new and distant geographic domain-
where
" he the VC himself " is in a nascent stage) to invest a huge quantum of
funds is limited - and therefore the success of the project - say to
eventually collect a lot of tolls for every road in the state / country
would employ our technology for laying the roads is enormous - meaning
to
say that we are going to dominate the road business - dominate with a
capital D.
6) The next alternative is to approach people all over the world to
invest
in this project to make it a big commercial success.
7) But obviously in this round since my company is not well known the
element of trust would be there to prevent anyone from investing in my
company- however good the idea may be.
8) The solution to this is that could we have people pay directly to the
car company to install the cars or to an independent watchdog like say
the
AAA which will monitor and give a report on how the money has been spent
to
install the cars- since it does not depend on which model of car I
should
use - in fact the investor may specify the type of car to be used.
9) Finally in case the business fails these cars having no resale value
would be used for the state as cars for the welfare of the handicapped
etc.... for a charitable purpose.
10) The benefit to the investor would be that he would get shares to
the
amount invested by him in multiples of a minimum of $ 300 - which should
bring him multiple returns (at least times 100 x in two years)
I would solicit your views on the following points:
- what would be the risk perception in the minds of the actual investors
-
assuming they are 10,000 miles away from the test site?
- what would be the valuation model to be followed?
- How would the angel react to the valuation of his investment being
scaled upto?
- Will this work?
- Will I be perceived to be Overboard and Honest ?
Thank you for your time and patient hearing.
Shanti