May 18, 2015
Overview• Drive System
• Prototype
• Market
• Environmental Analysis
• Operations
• Financing
• Exit Strategy
Brief
Continuously Variable Transmission or CVT: Is a transmission in which the ratio of the
rotational speeds of two shafts, as the input shaft and output shaft, can be varied continuously within a given range, providing an infinite number of possible ratios.
Advantages over conventional transmissions Engine performs at a maximum efficiency
Potential to create a biomechanically favorable bicycle
Smooth shifting
The ProblemCurrent limitations
Conventional bicycles have pre-selected gear ratiosThe rider is prevented from performing at optimal efficiency
Conventional derailers are prone to the elementsChain slippingDamage and wear caused by dirt and debrisCostly and time consuming repairs
Symptum’s SolutionA frictional v-belt drive system with a variable diameter sheave for gear ratio control.
RationalLow production costsCommonly used designMechanical simplicityModifying previous
success
The Next StepPrototype Testing
Slip conditions Force profile Range selection for
gear ratiosCompile cycling data
Shifter design Actuator selection
Frame compatibility Geometrical design Structural integrity
Pedal attachment
Variable Sheave
sheave
Output sprocket
Gear (a)
shifter bar motion
Gearbox first prototype design
Testing set up
Friction rollers
Force sensor
Unique opportunityOpportunity
Rider is given the unique ability to control input to output “gear” ratio over a continuously variable range
Potential to optimize muscle efficiencyThe proposed alternative CVT transmission
will allow us to capture a fraction of a multi billion dollar bicycle market in the US alone
Risk AssessmentDesign might not meet expectations
Final prototype will be tested by competitive bikers and bicycle enthusiastsInitial scores will be a comparison to their bicycle of choice
Market Acceptance of the internal gearboxBike shows, shopping mall, and public event displaysAttempt to gather consumer response through surveys
Provide market acceptability and consumer reaction
Team President Mitch Angus: Avid sponsored competitive gravity
mountain biker Competing since ‘96: Professional Status 2001-2005 & 2008 The National Off-Road Bike Association, Oregon Bike
Racing Association, Canadian Cup, Washington, Idaho, Montana Mountain Bike Series
CTO: Vladimir Borisov: Bioengineering major with a background in mechanical engineering. Summer internship under supervision of Dr. Davis Previous Small Business Owner
CMO: Michael J. Allan: General Studies major with Entrepreneurship minor. Marketing team member for “ Under the Big Tent Event” at
WSU 6 years customer service and management experience
Market Portland regularly ranks
at the top of Bicycling Magazine’s list of the best cycling cities.
Portland’s bicycle-related industry was worth $60 million in 2007.
Nation’s highest % of workers who commute by bike, about 3.5%.
The market is increasing yet stable and will continue to thrive with popularity in the sport starting to increase.
6 Billion Dollar Industry in the US.
Bike Industry is growing at a rate of 6.4%.
Headquarters will be located in Portland, Oregon.
Target Market Male and Female
Age: 10-55
Self-motivated
2 Segments Recreational Performance
Aggressive, active and entertaining lifestyle while seeking high quality of perfection and reliability
Discretionary income
Segments
Recreational Quality of product Superior customer
service
Performance Recognize a need
for change Highlight
technologyCVT
Marketing & Sales “Making performance and
perfection a standard”
“A sign or indication”
An abnormality to the industry
Market to segments independently
Recreation/Performance
“Total Customization”
Website
Studies underway to define target market
Multiple design schemes in testing phase
Company vehicle to attend all events
Promotion through; key chains, bottle openers, energy drinks, stickers, and decals
Sponsor cycling events in partnership with other outlets Extend reach by
sponsoring conventions and concerts
Competition The bicycle industry is divided into 4
different distribution channels.
I. Specialty 49% II. Full Line 8% III. Other 6% IV. Mass Merchants 37%
Value Having a standardized internal drive system
will set us apart from the competition.
IncomeRevenue:
OnlineBicycle Retailer
Purchase bikes at a discount or wholesale
The revenue comes directly from the profits made from selling complete bicycles online or to distributors for a wholesale pricing.
OperationsLocal bike shops will be utilized to sell our products. Symptum has no physical retail stores.
Bikes designed at Symptum Cycles, sent to manufacturing plant for assembly, sent back to Symptum Cycles once completed
Parts to be assembled onto frames will be sent to Symptum
Once a distributor purchases a bike Symptum will send them the frame and parts to be assemble on the bike and then sell the bike to the end user
Life Cycle
Benchmarks and Goals Year 1
First 3 monthsDesign gearbox and
framesAcquire patents &
trademarks Second 3 months
Market testing Second 6 months
begin acquiring distributors
Year 2 Official introduction in
to market 3,500 bikes sold,
$2,000,000 sales
Year 5 $15,000,000 in
sales .25% of U.S. market
International Sales & 1% of market
Buy out investors
Projected Prototype Funding
TASK 1 (in progress)
Facilities $500
Salaries $7000
Consulting $250
Direct Costs
Parts $250
Labor $500
TOTAL $8,500
TASK 2
Facilities $500
Salaries $6000
Consulting $500
Direct Costs
Parts $2000
Labor $2000
TOTAL $11,000
Projected Prototype Funding Cont.
TASK 3
Facilities$500
Salaries $6500
Consulting $1000
Direct Costs
Parts $4000
Labor $6000
TOTAL $18,000
TASK 4
Facilities $1000
Salaries $7000
Consulting $1000
Direct Costs
Parts $1000
Labor $1000
Testing $3000
TOTAL $14,000
Financing
Required Capital
Year 1 October- $60,000 Founders, Friends, FamilyInfusions
December-MarchTotal $2,000,000
Willing to give up 32% of equity
Projections
Year 1 Year 2 Year 3 Year 4 Year 5
Net Income
$2,031,211
$4,994,859 $3,285,043 $4,555,713 $5,494,140
Revenue $8,663,802
$17,327,604
$17,327,604
$22,525,885 $27,031,062
Cash $2,195,005
$6,571,327 $6,830,685 $10,569,961 $15,368,478
Net Profit Margin: 29%
Breakeven
Exit Strategy
Buy out investor at 6 times their original investmentInvestor: $ year 7
Year 10 or $50 million: Reevaluate
Single founder sell Shares will be purchased from remaining founders
Continue operationAcquisitionAll founders step down
Retain shares; board members
Questions
Consultants Dana Engineering Machine Shop
Kirk and Miles
Instructor Dr. Howard Davis
Ride This Bike Shop Owner Victor Sandrin
EVS Marketing Manager Brian Myrick
Downhill Northwest Bicycle Shop and Training Camp Owner Simon Lawton
Tesoro Chief Chemical Engineer
John Pope
Pivot Cycles International Sales Manager Rob Aguero
Marin Bikes Director of Operations Michael Hersey
Invicta Law Group Attorney at Law
Steve Edmiston
AterWaynne Partner
Ernest Bootsma
Waddell & Reed Financial Advisor
Johnathan Petrich
Serial Entrepreneur/Venture Capitalist/Niitek Chief Technical Officer Daniel Lulich
Klarquist Sparkman Partner, Patent Agent
Susan Alpert Siegel, Ph.D.
Seven Cycles Director of Recruiting
Denise Caruso
Fisher Bikes President Fisher Bicycle
Gary Fisher