H OTWAX
H
OTWAX
The HotWax Product Offering
• HotWax will provide hosted websites Budget: $29.99/mo Pro: $49.99/mo• Discounts for advance payment
• HotWax goal is to have 80% of subscribers purchase the Pro plan
Marketing HotWax
• Goal: Low cost/no cost marketing Word of mouth Creating a community
Marketing HotWax
Corporate Structure
• S Corp: Net revenue disbursed to shareholders on a
regular basis Shareholders holding 5% or more will be on
Board of Directors
• Business goal: Maximize cashflow and revenue disbursement to shareholders
Summary of Business Goals$1 Million in annual Free Cash Flow for shareholder disbursement
within 3 years
• Year 1: 1 new subscriber / day $ 35 / mo average subscription
• Year 2: 2 new subscribers / day $ 37 / mo average subscription
• Year 3: 3 new subscribers / day $ 39 / mo average subscription
Goal: New Subscribers
145 Thousand New Domains Created – in 24 Hours
Goal: New Subscribers
HotWax Goal: Within 3 years: 3 new subscribers / day (0.002%)
Summary of Subscriber Revenue Prospects
• End Year 1: Yearly revenue -- $153,300
• End Year 2: Yearly revenue -- $ 482,895
• End Year 3: Yearly revenue -- $ 1,014,080
Subscriber Revenue Prospects – Details
Additional Revenue Sources
• “Ninjas” HotWax trained consultants Ninjas pay for training -- +/- $250/ninja HotWax provides client leads Ninjas a likely source of new subscribers
• Setup Fees Possible: equal to 1 month subscription
• Add ons and Extras Email provision – users get unlimited email, email addresses Sales of domain names, etc
• New product offerings HotWax Mobile “DreamWeaver” on the web
Expenses
• Expenses are very low
• Low cost servers or cloud computing Current new Goliath server can handle about 550 websites $159/month, include backbone connections Cloud computing costs even less
• Tech support Assume about $15 / year per subscriber Revenue from setup charges will more than cover support
• Salaries Officers will take equity and dividends in lieu of salaries Support staff primarily 1099 consultants or offshore
• Marketing Primarily low-cost social and viral marketing Ninjas will be key drivers of subscription revenue
Funding Goals
• Seeking $25 – $100K • To be applied to marketing and
operational expenses
Investment opportunity• Convertible Bond
Fixed rate security Secured senior debt 36 month maturity – full return of principal
• Dividend: 12% / year Paid monthly or annually
• Convertible at any time to preferred stock 1 Bond = 1% total outstanding shares of stock Preferred means– no dilution in
event of later offerings
• Investment amount: $10,000/bond
Bondholders will be informed in advance of other capital events that might affect the value of shares, and will be given advance opportunity to convert to stock
Investment opportunity – Option 2• Preferred Stock
No dilution in event of later offerings
• Each Preferred share = 2% of outstanding shares
• Investment amount: $10,000/preferred share
Comparison / Reality Check
• Squarespace.com offers a similarly positioned product at a similar price
$ 2.2 million after 3 years