EASY
Y FOOD
s:
TEAM Members
angxiao (Shaw)
Ma, Lia
Han, X
Xu (Victor))
Zhuang
g, Shigua
an (Jessic
ca)
Investment Proposal
Contents
Executive Summary: ...................................................................................................................... 3 Business Model: ..................................................................................................................... 3 Why could we success? ........................................................................................................ 4 Invest return and offer:........................................................................................................... 4 Vision and Mission ......................................................................................................................... 5 Products： ....................................................................................................................................... 5 Definition of “Clean vegetables”: .......................................................................................... 5 Production Procedures .......................................................................................................... 6 Quality Control: ....................................................................................................................... 6 Marketing ......................................................................................................................................... 8 Target audience ...................................................................................................................... 8 Global market:......................................................................................................................... 8 Big market in Mainland China............................................................................................... 9 Unique sales channel: ......................................................................................................... 10 Competitors: .................................................................................................................................. 12 Social Impact: ............................................................................................................................... 12 Milestones ..................................................................................................................................... 13 Management Team： .................................................................................................................. 14 Current structure:.................................................................................................................. 14 Future Structure: ................................................................................................................... 15 Financial Projection ...................................................................................................................... 15 Financial Performance:........................................................................................................ 15 Main assumptions are as follows: ...................................................................................... 16 Fund Raising ................................................................................................................................. 17 Strategy for fund raising ...................................................................................................... 17 Investment return.................................................................................................................. 18 Exe
ecutive Summar
S
ry:
Our venture is a real busine
ess in Shen Z
Zhen, which was started
d in Dec 201 2. Ma Liangxiao,
ber and Part time MBA sstudent in CU
UHK, held more
m
than 200% shares in
n the
the team memb
mpany.
com
Our product is pre-cut “cle
ean vegetab
bles”, which keep high quality andd freshness. It’s
ook and also safe to ea
at directly as
s it’s cleaned, disinfecteed and store
ed by
convvenient to co
proffessional tech
hnology.
an help the re
estaurants to
o save the co
ost and follow
w the standaard food proc
cess,
Our products ca
vidual customers.
and effectively reduce the preparing tiime for indiv
And we use ve
endor
our individual customerrs. It would be much more
m
macchine to sell clean vegetables to o
convvenient to bu
uy vegetables from vendo
or machine than
t
to buy from
f
the marrket, and sav
ve 20
minu
utes on clean
ning and cuttting.
Bus
siness Mod
del:
1. Sourcing:
We strictly select some partners to provide qualified ve
egetables foor us. The main
ution-free, u
using organic fertilizer, following sccientific plan
nning
requirementts are: pollu
procedures etc. Cooperate with ag
griculture ba
ases to guarrantee the rraw materialls by
nitoring and testing.
t
Main
ntain a long-tterm stable relationship w
with our partn
ners.
guiding, mon
2. Production:
Strictly contrrol the process in line witth HACCP, using Cold Ch
hain technoloogy in production
and deliveryy.
3. B to C:
We use ven
ndor machin
ne to sell ve
egetables to individual consumers
c
pproviding a more
m
convenient way
w for them
m to buy and cook with low
wer price.
4. B to B:
Target mediu
um sized cha
ain restauran
nts to provide
e standardize
ed, cost saviing products.
5. Recycle:
The kitchen waste is rec
cycled to pro
oduce organic fertilizer which can be used in plan
nting.
w use during
g production is also recyc
cled.
The water we
Why could we success?
1. Guaranteed Product
-
Source Control: We strictly select resources of raw material by cooperating with the
suppliers who offer the “pollution-free food”.
-
Quality Control: We use the cold-chain technology to guarantee the freshness of the
food. We follow HACCP (Hazard Analysis and Critical Control Point) standard to make
sure the safety of final products.
2. Convenience
-
Ready to cook: save about 2 hours to prepare and cook.
-
Easy to buy: Customers could buy from the vendor machines on the way home or
from offices nearby.
3. Cost Saving (30% of the total cost)
-
Procurement cost saving: The price of our product is lower than the ones in
supermarkets.
-
Labor cost saving: Release the labor from cleaning, cutting and other preparing
procedures.
-
Storage space saving: Ready-for-use products are compact and can save the space
for storage.
4. Reduce and recycle the kitchen waste
-
600 tons of kitchen waste and 1200 tons of recycled water can be centrally processed
every year
-
Reduce the waste: Reduce 5%-10% food waste by skilled cutting.
-
Produce the fertilizer: Recycle the kitchen waste to produce organic fertilizer, which
can be used by our suppliers. The kitchen waste can be centrally collected and treated
to reduce 30% of the cost occurred in collecting and transporting waste from individual
kitchen.
Invest return and offer:
We target to be listed in the end of the five years operation. Our ambitious goal is to be the
No.1 clean vegetable supplier in the South China in the next five years, and set the branches
in Shenzhen, Guangzhou, Zhuhai and Xiamen.
We need three rounds of fund raising in total RMB 19 million with a consideration of 20%-30%
equity. We will invite Government, VC, PE to invest in our company before IPO. Profit sharing
will be conducted according to equity holding. Two years of shareholding should be maintained
after IPO for institutional investors and dividends will be paid based on the performance of
business operation. The exit return can reach to 12 times and IRR can reach to 70%.
Vis
sion and Mission
n
Vision：
d a new lifesstyle to releas
se people fro
om cooking preparing
p
and minimize tthe kitchen waste
w
Lead
to prrotect the en
nvironment.
sion:
Miss
•
Produce
e high quality
y, safe food w
with reasonable price usin
ng standardiized procedu
ures;
•
Offer an
n convenient way to provi de food and services
•
Reduce and recycle the kitchen w
waste in China
Pro
oducts：
Alon
ng with the development
d
of society, vvegetables demand
d
is no
o longer the same as be
efore.
Safe
e, fresh, convvenient vege
etables are m
more demand
ded than raw ones, whichh are piled up
p and
placced in fair to sell.
s
40 years
s ago, “Clean
n vegetables
s” are shown in overseas markets and
d fast
deve
eloped as the
e mainstream
m of vegetab
ble consumpttion.
Defiinition of “C
Clean vegeta
ables”:
Clea
an vegetable
es are not sim
mply cleaned
d by water. Clean vegetab
bles are the vvegetables which
w
are cleaned, dissinfected, chopped and sstored underr proper temperature andd can be cooked
s is the com
mbination of cconventionall fruit
and eaten directtly. Actually, clean vegettable process
age technolo
ogy and vege
etable pre-prrocess technology.
stora
Clean vegeta
able” with the
e following atttributes:
Our product is “C
•
Cleaned
d and disinfec
cted- can be
e eaten directtly or cook directly.
•
Using po
ollution-free material
•
Package
ed to avoid second
s
polluttion
•
Quality guarantee
g
pe
eriod is longe
er than 5 day
ys.
Samplles of our prroducts
Pro
oduction Prrocedures
C
Clean
P
Peeling
Cutting
Disinfection
n
Packin
ng
Storaage
Delivvery
1. Clean: When
n receive the
e raw materia
als, we clean
n them with water
w
in ordeer to minimize
e the
soil, impuritiies and pestticide adhere
e to the vege
etables. We wash 4 timees using run
nning
water.
peel, we remo
ove the peel to make ourr product ready to
2. Peeling: Forr some vegettables with p
eat.
g machine (s
see the follow
wing picture)) to chop the
3. Cutting: We use multi-function cutting
ng to custome
er requiremeents.
vegetables into different kinds of piecces accordin
ported sanitizzer to clean the
t chopped vegetables.
4. Disinfection:: We use imp
nished goods are packe
ed with plasttic bags thatt are biodegrradable. We
e use
5. Packing: Fin
sealing macchine (seen th
he following picture) to co
ontrol the am
mount of air inn plastic bag
gs.
oducts are stored
s
in a lo
ow temperatture environment to keeep fresh. We
e use
6. Storage: Pro
large refrigerator to control the tempe
erature. (see
e the following picture)
aintain a prop
per temperatture during th
he delivering.
7. Delivery: Ma
Multi-function cutting machine
Sea
aling machine
Refriggerator
Qua
ality Contro
ol:
We guarantee th
he freshness and safety o
of our produc
ct in the follo
owing methodds:
v
1. Harvest of vegetables
The final goal to control the harvest is to acquire the most qualified, complete products.
The most important issues are the farm management, harvesting period decision making
and harvesting technologies requirements. When approaching the harvest time, irrigation
amount and timing should be highly controlled, strictly following the guidance of vegetable
fertilization. For some kinds of vegetables, certain concentration of chemical “Ca” can be
used to improve the hardness and elasticity of vegetable tissues and mitigate
physiological diseases; certain concentration of Gibberellin can keep the freshness of
vegetables. Generally speaking, different kinds of vegetable produced in different district
need different treatments. We guarantee the quality by avoiding harvest in bad weather,
we protect product from damage and pollution and pick out the impurity during harvest.
2. Examination of vegetables
As there is complex flora in soil, which is harmful to human body, it is very important to
select the safe ones to further process. We set up a key control point to conduct
Microbiological Test, controlling the types and quantity of microorganism. We establish a
database to record the data and take precautions against the pollution and use a unified
standard to control the consistency of quality.
3. Pre-cooling
In order to keep the freshness of vegetables, it is essential to low down the temperature of
vegetable in a proper range right after harvest and keep the temperature until further
process. Vegetables rot extremely fast after harvest because they contain a large amount
of water and maintain a high respiratory activity. Taking green pea for example, sugar
content decreases by 80% under 20℃ within 24 hours, which lose the flavor and
freshness. Thus, pre-cooling as the first phase in storage is the key to the success of cold
chain technology.
Fast cooling can not only pass by enzymatic activities, but also can minimize the effect of
biochemical reactions. We use cold water to do the pre-cooling because this method is
highly effective and convenient with a reasonable cost.
4. Washing and disinfection
The aim of washing is to eliminate the impurities; soil and pollutant adhere to the
vegetables. It is an effective way to reduce the amount of flora. The key of washing is to
use running water and make sure water is clean enough. We use continuous washers to
wash vegetables for 4 times. In this situation, a moving conveyor picks up the produce and
carries it under powerful sprays of water. Recirculation through a filter reduces overall
water consumption. The temperature, contact time, pH and chlorine concentration should
be monitored for their effectiveness during washing.
We use eatable sanitizer, which minimize the transmission of pathogens from water to
produce, reduce the microbial load on the surface of the produce and prevent microbial
build-up in the processing water. The sanitizer concentration in the processing water is
routinely monitored and adjusted to prescribed levels. Technical assistance is provided by
an experienced expert, who knows which kind of vegetable should use what kind of
concentration and maximize the safety of our products.
5. Storage
We use refrigerator to store before further process. Microorganism has a speedy
multiplication activity to deteriorate the freshness of vegetables under higher storage
temperature. Usually, we keep the temperature below 7℃, which is the requirement for
keeping salad fresh.
When finished processing, the vegetables are stored in refrigerator again. Cold-tolerance
vegetables are stored in temperature range from 2℃-4℃. Hot-tolerance ones are stored in
temperature range from 4℃ to 10℃.
6. HACCP
We strictly follow HACCP to ensure that food prepared in a plant is sound and free of
contamination including following aspects: Food safety programs, Management systems,
Pest control programs, Operational methods and personnel practices, Maintenance for
food safety and Cleaning practices.
Marketing
Target audience
We have two groups of target customers as:
1.
Households with:
•
Stable vegetable needs
•
Family members<=3
•
Family income RMB 10-20 thousands per month
•
Unwilling to spend more than half and hour to prepare for cooking.
•
Care about the food safety problem
2.
Medium-sized chain restaurants with:
•
5-20 shops
•
Monthly Revenue over 500 thousand
•
Standardized products (dishes) requirements
Global market:
In the developed countries, clean vegetables have already become the first choice for
households. They are originally used in catering industry, and then reach to household
cooking.
In the US market, the sales growth of the fresh-cut industry has grown very quickly in the past
two decades. Sales of prepared vegetables reached to $863 million in 2010.1And the market
was continually grown quickly. Fresh-cut organic salads are now being mainstreamed across
the United States and feeding consumer desire for healthy food and preservation of the
environment. They are now widely available in restaurants and retail outlets.
In Tokyo, the raw vegetable is not allowed to sell in the city, citizens can only buy processed
clean vegetables in the market.
Big market in Mainland China
In China, changes in lifestyles have increased the demand for convenience products, and this
has encouraged the consumption of processed product (including vegetable). In particular,
consumers are becoming more health conscious but increasingly time poor in the big cities.
The customer’s request of clean vegetable in China is increasing rapidly.
As the pace of living is quicker and quicker, the new generation would not like to spend more
time on cooking and preparing the foods. According to the survey in 2011, the average time of
cooking and clean food in China was about 90 minutes per day, which means Chinese people
only spent about half an hour for cooking and cleaning food.
2
The request for individual is increasing, while the request from the fast food industry also
develops very quickly. There are lots of chain restaurants to offer the fast and standard food
and they need the pre-clean and pre-cut standard vegetables for every chain shops.
In Shenzhen, there are hundreds of medium size chain fast food restaurants; each of them has
more than 3 chain shops. These restaurants are in the fast growing period and their operation
focus on the expanding and developing. Clean vegetables could help them to save the cost,
reduce the waste and also meet the request of safety.
According to our investigation, the total vegetable consumption is about 369 million per month
in Beijing, Shanghai, Guangzhou and Shenzhen. Suppose the conversion rate of clean
vegetable is 5%, the consumption request of small and medium restaurants reaches to 129
million per month. And the market size of self cooking also reach to 110.7 million per month.
We calculate the market size of vegetable consumption in following chart.
1
2
“The state of the industry 2010”, The Perishables Group
“Secretariat estimates based on national time-use surveys”
Uniq
que sales ch
hannel:
1. Vendor mac
chine:
Vendor machine
e is our unique channel to sell the clean
c
vegetables. The veendor machine is
o linked with Ethernet tec
chnology, wh
hich could monitor
m
the sa
ales situationn and send back
also
sign
nal to our IT system, which is consistted of database system, monitoring system and then
we can decide how many products n
need to be replenished. The custom
mers could also
he vendor machine, and buy it in the next day.
pre--order from th
endor machi ne is betwe
een 1°C to 5°C, which could keep
p the
The temperaturre in the ve
etable fresh. The storage
e period of th
he vegetable
e package is 5 days to 7 days. To escape
vege
the d
damage by dropping
d
dow
wn, we try to use the hard
d box to pack
k the clean vvegetable and
d put
the ssponge on th
he bottom of the box.
The vendor macchine will be placed:
1
1) Near the
e subway and
d bus stop
2
2) Near the
e big office bu
uilding
3
3) In high-g
grade commu
unities, not cconvenient to
o buy the veg
getable from the market.
ducts will be
e sent to the
e NGO or charity organization for thhe old peop
ple or
The unsold prod
han. And the outdate prod
ducts will be used to feed
d the pigs or other animaals.
orph
s that our rettail price is 20% lower tha
an the price iin super marrkets.
Our competitive advantage is
because therre are lots off middlemen in the retail and
a wholesale market annd the price of
o the
It’s b
vege
etable in the retail is nearly twice high
her than the wholesale market.
m
Here
e’s some exa
ample of pric
ce on 1st, Feb
b,2013:
Vegetable/500g
Wholesale
Retaiil
Super
Our Price!
market price
Marke t price
arket price
Ma
Carrrot
1.00 RMB
2.5 RM
MB
3.5
5 RMB
2.9 RMB
Whitte Onion
2.00 RMB
3.2 RM
MB
4.3
3 RMB
3.6 RMB
Cab
bbage
1.80 RMB
2.8 RM
MB
3.9
9 RMB
3.2 RMB
And
d Our vegeta
able has bee
en cleaned a
and cut, gua
arantee the fresh
f
and saafety!
2. Online shop
p
Online shop is one
o of the most importan
nt channels to
t reach the public. Custtomers could
d buy
ables online and
a the vege
etables would
d be delivere
ed to home. O
Our strategy
y is to
the cclean vegeta
coop
perate with some
s
e-com
mmercial sho p as the firs
st step and develop
d
our own online shop
whe
en we have th
he fund and technology ssupport.
Shenzhen, “M
My rainbow” (网上天虹,
(
htttp://www.my
yrainbow.cn), the online sshop of Tianhong
In S
pping mall, is our poten
ntial partner. Tianhong group
g
is a public
p
compaany and hold 57
shop
sub--shops in the
e South China. The online
e shop now is
s selling the commodity, ffood and clothes.
Our products ca
an be sold on
n their online
e shop, and then deliver to
t the custom
mers by insulated
d case.
food
T Bao (淘宝
宝), Yihaodian
n.com（1 号店）as our potential
p
onlinne partners.
We also target Tao
nnel:
3. B to B chan
ur important customers. We offer thee customized
d and
The medium size restaurants are also ou
ndard pre-cutt vegetable to
t help the rrestaurants to
t save the cost
c
in variouus ways, ma
aking
stan
theirr dishes morre standard and
a promote the efficienc
cy.
c
res
sources in S
Shenzhen and have 2 restaurant ccustomers and 2
We have rich customer
ential custom
mers until now
w.
pote
Competitors:
There are no direct competitors in Shenzhen now, because we target the medium-sized chain
restaurant and the white-collar households by niche channel (vendor machine).
But there are two kinds of indirect competitors in Shenzhen market, one is “Central Kitchen”
supplier, such as Zhen Gongfu (真功夫), the Central Kitchen offers the clean vegetables and
meat to their 200 chains restaurants. KFC also has the constant supplier for vegetables and
chicken. The other is the supermarket, which also sells clean vegetables, but our product is 20%
cheaper than those in supermarket and we offer more convenient way to buy.
There are some other competitors in the other cities, such as Wuhan, Ha’erbin, Shanghai, etc.
But the business of clean vegetable is still not popular in most of the cities. Our strategy is that
we select the market which do not have direct competitors in the following years’ development
and acquire the market share in a rapid way.
Social Impact:
China has surpassed the United States as the world’s largest producer of household garbage.
In Shenzhen, household produced about 14400 tons trash every day in 2012, and the number
is supposed to increase by 8% every year. Half of the household garbage is kitchen waste.
Government spent a lot of money and resources on collecting, classifying and burning away
the waste.
In 2012, Shenzhen government started to encourage the clean vegetable industry. Selling the
clean vegetable in the city can save 30% cost in collecting, transporting and classifying the
garbage and decrease the environment pollution. It’s believed that the government will
develop some specific policy to encourage the clean vegetable selling in the cities to prevent
the pollution, and it’s quite possible for us to apply for the fund once it’s announced.
We also recycle the kitchen waste into organic fertilizer and then offer to our suppliers. The
composting fermentation method will lead to less pollution and environmental friendly
compared with other solutions of the waste disposal. The organic fertilizer could also feed the
fish or pork when we expand our business to the meat and fish products. (please see the
following processing pictures)
According to our estimation, 600 tons of kitchen waste and 1200 tons of recycled water
can be centrally processed every year through our company.
Millestones
s
Year 1:
Esta
ablish plants and develop
p customers in Shenzhen
n, starting with B to B strrategy to dev
velop
10 m
medium sized
d chain resta
aurants to gu
uarantee certtain amount income as w
working capita
al. At
the same time, 10 vendor machines a
are placed in residence
e communitiees and business
m
and ccustomer response. 50 ve
endor machinnes are placed in
distrricts in order to test the market
the second half of year 1 after
a
stabiliza
ation of sales
s from chain
n restaurantss. Sales reve
enue
uld reach to RMB 1.7 million and fix tthe problems
s reflected by
y customers.
shou
Year 2:
Based on the experience
e
frrom the firstt 1, we duplicate the service of vennder machine
es to
arge the influ
uence in She
enzhen. Thu
us massive in
nvestment should be peerformed to place
p
enla
more vendor ma
achines to sell our produ
ucts covering
g most of the communitiies and business
chine sales, tthe business
s with
distrricts in Shenzzhen. Along with the devvelopment off vender mac
chaiin restaurantts should be
e kept going . Break even should be realized annd the number of
vend
dor machine reaches to 300
3 in the en
nd of Year 2.
Year 3:
Con
ntinuously pllace vendorr machines and develo
op medium sized chainn restaurantts to
maxximize the market in Shenzhen and e
expand our business
b
to Guangzhou
G
w
which is a similar
market as Shenzhen. We bu
uild plants an
nd develop cooperation
c
with
w supplierrs and customers
Guangzhou and
a
take the
e fast move to acquire market
m
share
e. In the ennd of Year 3,
3 the
in G
num
mber of vendor machines
s in total will reach to 60
00. Besides the
t market eextension, we
e will
exte
end our produ
uct line to me
eat, fish, veg
getables and the combina
ation of the thhree.
Year 4:
With
h the strong support and
d experience
e gain from last three ye
ears’ operatiion, we have
e the
conffidence to co
opy our succ
cessful mode
el to other 2 cities (Zhuha
ai and Xiameen). In the en
nd of
Yearr 4, the numb
ber of vendo
or machine w
will reach to 1800
1
and sales revenue w
will close to RMB
40 m
million.
Year 5:
IPO List in Chine
ese Stock Ex
xchange on G
GEM.
Ma
anageme
ent Team：
Current structu
ure:
CEO
CFO
COO
Marketing
M
&
Saales Directtor
CEO
O: 15 years’’ experience
e in catering business, holding
h
bunc
ch of resourrces. Be ab
ble to
expllore new market and sale
es channels
CFO
O: Expert in finance
f
and sensitive to ffinancial cha
ange, 10 yea
ars’ experiencce in finance
e and
inve
estment.
COO
O: Expert in industry tec
chnology and
d good at qu
uality control, 10 years’ eexperience in
n the
fast food industrry and aboutt 4 years’ exxperience in the technolo
ogy departmeent of one of
o the
gest central kitchen.
k
bigg
Marketing and sales
s
directorr: Expert in fa
fast food marrketing and sales,
s
9 yearrs experiences in
FMC
CC industry.
Futu
ure Structurre:
Headquarter(Shenzzhen)
SBU
SBU
SBU
S
(G
Guang zhou)
(ZZhuhai)
( Xiaamen)
Fin
nancial Projectio
P
n
RMB million
76.00
80
0.00
70
0.00
60
0.00
50
0.00
38.00
40
0.00
Total Reven
nue
Profit after tax
30
0.00
18.550
20
0.00
10
0.00
0
0.00
‐10
0.00
12.49
8.75
5
1.68
‐
1‐0.17
0.04
1.64
2
3
5.43
4
5
Revenue
R
an
nd Net Incom
me projection
Fina
ancial Perfo
ormance:
1. Breakeven will
w be reache
ed after two years of running.
s
with 20%
% and will b
be stable in the
t fourth ye
ear as 25%. Net profit ma
argin
2. Gross rate start
starts from -10% and finally reache
es to 16% in
n the end off year 5. Pleease refer to
o the
ble for detail.
following tab
Currency: RMB
Pro-forma Income
Year 1
Year 2
Year 3
Year 4
Year 5
Statement
675,000
6,750,000
13,500,00
27,000,00
54,000,00
0
0
0
5,000,000
11,000,00
22,000,00
0
0
14,245,00
28,500,00
57,000,00
0
0
0
4,255,000
9,500,000
19,000,00
Vendor Machine Revenue
Chain
Restaurant
1,000,000
2,000,000
Revenue
1,340,000
6,825,000
Cost
335,000
1,925,000
0
Gross Profit
Promotion fee
300,000
600,000
500,000
400,000
300,000
G&A
100,000
500,000
600,000
700,000
750,000
Logistics
54,000
540,000
675,000
810,000
891,000
Others
50,000
250,000
300,000
350,000
400,000
-169,000
35,000
2,180,000
7,240,000
16,659,00
0
Profit before tax
Tax
-169,000
-
545,000
1,810,000
4,164,750
35,000
1,635,000
5,430,000
12,494,25
0
Profit after tax
Pro-forma Income Statement
Main assumptions are as follows:
1. Vender machine sales: 150 packs of vegetables are sold with RMB 3 per pack.
2. Gross profit arises due to economies of scale and lower down the variable cost.
3. Logistics expense arises accordingly with the increase of sales revenue but due to the
increase of vendor machines, expense can be shared among those vendor machines.
Thus the logistics expense for each vendor machine decreases over years.
4. Promotion fee is mainly for the advertisements and sales promotions. And the amount is a
higher when our business goes to a new market, but will lower down to the mature market.
Fund Raising
We need 3 rounds of fund raising to develop and extent our business with a fast and stable
pace.
Amount
Time
(RMB)
Consideration
Main usage of fund
Vendor machine investment, marketing development
Year 2
2m
0~10% of equity
Year 3
7m
10% of equity
Year 4
10m
10% of equity
First round funding usage
5%
Vendor
machine
15%
Marketing
Plants construction, vendor machine investment, marketing
development and overhead expense
Product line enlargement, plants construction, vendor machine
investment, marketing development
Vendor
machine
5%
20%
25%
Vendor
machine
5%
Plants
30%
Marketing
80%
Others
Third round funding usage
Second round funding usage
25%
40%
New product
line
Plants
50%
Others
Others
Strategy for fund raising
First round of fund raising, we first reach to government for fund or allowance. We are the
company who strike to guarantee the safety and quality of food, which is very important to
people’s health and lower the waste at the same time. Government now is encouraging
enterprises to take this kind of responsibility and it is a good opportunity to get help from
government. Also it is possible for us to reach Angel fund to sell our ideas. For the second and
third year fund raising, we will let VC or PE fund to engage and we will offer percentage of
equity in return.
Investment return
Before IPO: For investors seeking returns (VC or PE), we offer 20% of equity for second and
third round of fund raising. The investors can share our profit on percentage of equity prior to
IPO.
IPO: Institutional investors will receive shares in primary market accordingly and must hold the
shares for at least 2 years. All investors will receive dividends as a reward for investing based
on annual performance of our company.
After IPO: Institutional investors can liquidate our company share in secondary market after 2
years of holding or continue to hold our shares in a long run. When exit, average return will be
12 times initial investment and IRR will be at least 70%.