Capital

Capital Requirements

The phases of development for ACME PARTS.com are conception, development, alpha, beta, Live and Grand Opening. We have begun the alpha phase of the project. The alpha phase includes such elements as HTML implementation, module implementation and server installation. We define our beta phase as a site that is fully functional, able to complete an entire transaction but requiring performance and interface tuning, missing some features and containing minimal content. The "Live" phase is defined as a fully functional site, fully tuned, robust enough to handle visitor loads and complete with content. Our Grand Opening will begin after a thorough shakedown, all content is published and full product selection is in place. At this point our full advertising and promotion campaign will be initiated.

Until now we have been self-funded. At this point we feel it is important to accelerate the implementation process. Our industry is moving fast and time is a commodity not to be wasted. The funding we currently seek will take us through the completion of the Live phase and into the beginning of the Grand Opening phase. The initial funding round will enable us to launch our Grand Opening by xxxx.

We are seeking investments totaling $xxxx in our initial round of funding. The funds will be used to hire a salaried staff, purchase equipment and pay the cost of office space, overhead and early phase advertising expenses. The funding will allow ACME PARTS.com to open for business in roughly six months and cover expenses (exclusive of our advertising campaign) for about one year.

 

Advertising Expense (in thousands)

1Q

2Q

3Q

4Q

FYE

Year 1

$xxxx,

$xxxx,

$xxxx,

$xxxx,

$xxxx,

Year 2

$xxxx,

$xxxx,

$xxxx,

$xxxx,

$xxxx,

Year 3

$xxxx,

$xxxx,

$xxxx,

$xxxx,

$xxxx,

Year 4

$xxxx,

$xxxx,

$xxxx,

$xxxx,

$xxxx,

Year 5

$xxxx,

$xxxx,

$xxxx,

$xxxx,

$xxxx,

 

Non-Advertising Expense (in thousands)

1Q

2Q

3Q

4Q

FYE

Year 1

$xxxx,

$xxxx,

$xxxx,

$xxxx,

$xxxx,

Year 2

$xxxx,

$xxxx,

$xxxx,

$xxxx,

$xxxx,

Year 3

$xxxx,

$xxxx,

$xxxx,

$xxxx,

$xxxx,

Year 4

$xxxx,

$xxxx,

$xxxx,

$xxxx,

$xxxx,

Year 5

$xxxx,

$xxxx,

$xxxx,

$xxxx,

$xxxx,

 

Combined Expense (in thousands)

1Q

2Q

3Q

4Q

FYE

Year 1

$xxxx,

$xxxx,

$xxxx,

$xxxx,

$xxxx,

Year 2

$xxxx,

$xxxx,

$xxxx,

$xxxx,

$xxxx,

Year 3

$xxxx,

$xxxx,

$xxxx,

$xxxx,

$xxxx,

Year 4

$xxxx,

$xxxx,

$xxxx,

$xxxx,

$xxxx,

Year 5

$xxxx,

$xxxx,

$xxxx,

$xxxx,

$xxxx,

 

The initial round of "seed" funding is being sought to fuel the development of a production website for ACME PARTS.com. We are seeking $xxxx million in this funding round. The money will be used to build a salaried staff, purchase equipment and pay the cost office space, overhead and early phase advertising expenses.

The capitalization resources available include remaining self-funded, conventional lending institutions, friends & family investment, Angel Capital and Venture Capital (VC). In light of the importance of accelerating the development process, it is in the best interest of the company to seek outside investment. Our best opportunity to obtain the necessary funding is to offer equity participation in exchange.

In return for the initial investment, the investor(s) will be entitled to a number of preferred Class A shares commensurate with their investment. The number of shares shall be determined by taking the valuation developed during the second round funding stage and multiplying by a discount price (which shall be negotiated at the time of the initial investment). This form of valuation reduces the risk and expense to both parties associated with developing a valuation at this early stage of development.

Exit Strategies for investors may include but are not limited to the following methods:

  1. Initial Public Offering (IPO).
  2. Scheduled debt repayment.
  3. Liquidation through subsequent funding rounds.

Our second round of funding will be scheduled to coincide with our cash needs approximately one year after our initial funding. We will seek funds to fuel the growth of our organization, the expense of which will be dominated by salaries and advertising. We currently anticipate funding in the range of $xxxx million dollars on a company valuation exceeding $xxxx million.