Symptum Final Presentation


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Symptum Final Presentation

  1. 1. Symptum Cycles <ul><li>Mitchell Angus & Vladimir Borisov </li></ul><ul><li>December 11 th , 2008 </li></ul>
  2. 2. Overview <ul><li>Brief Introduction </li></ul><ul><li>Team </li></ul><ul><li>Prototype </li></ul><ul><li>Environmental Analysis </li></ul><ul><li>Operations </li></ul><ul><li>Financing </li></ul><ul><li>Exit Strategy </li></ul>
  3. 3. Brief <ul><li>Continuously Variable Transmission or CVT: </li></ul><ul><ul><li>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. </li></ul></ul><ul><ul><li>Engine performs at a maximum efficiency </li></ul></ul><ul><ul><ul><li>Potential to create a biomechanically favorable bicycle </li></ul></ul></ul><ul><ul><li>Smooth shifting </li></ul></ul>
  4. 4. Team <ul><li>President Mitch Angus: Avid sponsored competitive gravity mountain biker </li></ul><ul><ul><li>Competing since ‘96: Professional Status 2001-2005 & 2008 </li></ul></ul><ul><ul><li>The National Off-Road Bike Association, Oregon Bike Racing Association, Canadian Cup, Washington, Idaho, Montana Mountain Bike Series </li></ul></ul><ul><li>CTO: Vladimir Borisov: Bioengineering major with a background in mechanical engineering. </li></ul><ul><ul><li>Summer internship under supervision of Dr. Davis </li></ul></ul><ul><ul><li>Previous Small Business Owner </li></ul></ul>
  5. 5. Consultants <ul><li>Dana Engineering Machine Shop </li></ul><ul><ul><li>Confidential </li></ul></ul><ul><ul><li>Instructor </li></ul></ul><ul><ul><li>Confidential   </li></ul></ul><ul><li>Ride This Bike Shop </li></ul><ul><ul><li>Owner </li></ul></ul><ul><ul><li>Confidential </li></ul></ul><ul><li>EVS </li></ul><ul><ul><li>Marketing Manager </li></ul></ul><ul><ul><li>Confidential </li></ul></ul><ul><li>Downhill Northwest Bicycle Shop and Training Camp </li></ul><ul><ul><li>Owner </li></ul></ul><ul><ul><li>Confidential </li></ul></ul><ul><li>Serial Entrepreneur/Venture Capitalist/Niitek </li></ul><ul><ul><li>Chief Technical Officer </li></ul></ul><ul><ul><li>Confidential   </li></ul></ul><ul><li>Tesoro </li></ul><ul><ul><li>Chief Chemical Engineer </li></ul></ul><ul><ul><li>Confidential </li></ul></ul><ul><li>Invicta Law Group </li></ul><ul><ul><li>Attorney at Law </li></ul></ul><ul><ul><li>Confidential </li></ul></ul><ul><li>  AterWaynne </li></ul><ul><ul><li>Partner </li></ul></ul><ul><ul><li>Confidential   </li></ul></ul><ul><li>Waddell & Reed </li></ul><ul><ul><li>Financial Advisor </li></ul></ul><ul><ul><li>Confidential </li></ul></ul>
  6. 6. Unique opportunity <ul><li>Current limitations </li></ul><ul><ul><li>Conventional bicycles have pre-selected gear ratios </li></ul></ul><ul><ul><li>The rider is prevented from performing at optimal efficiency </li></ul></ul><ul><li>Opportunity </li></ul><ul><ul><li>Rider is given the unique ability to control input to output “gear” ratio over a continuously variable range </li></ul></ul><ul><ul><li>Potential to optimize muscle efficiency </li></ul></ul><ul><ul><li>The proposed alternative CVT transmission will allow us to capture a fraction of a multi billion dollar bicycle market in the US alone </li></ul></ul>
  7. 7. Selected Prototype <ul><li>Rational </li></ul><ul><ul><li>Low production costs </li></ul></ul><ul><ul><li>Commonly used design </li></ul></ul><ul><ul><li>Mechanical simplicity </li></ul></ul><ul><ul><li>Previous work cited </li></ul></ul>
  8. 8. The Next Step <ul><li>Prototype Testing </li></ul><ul><ul><li>Slip conditions </li></ul></ul><ul><ul><li>Force profile </li></ul></ul><ul><li>Actuator design </li></ul><ul><ul><li>Actuator selection </li></ul></ul><ul><ul><ul><li>Pneumatic </li></ul></ul></ul><ul><ul><ul><li>Electric </li></ul></ul></ul><ul><ul><ul><li>Mechanical </li></ul></ul></ul><ul><ul><li>Geometrical design </li></ul></ul><ul><ul><ul><li>Frame compatibility </li></ul></ul></ul>Pedal attachment Variable Sheave sheave Output sprocket Gear (a) shifter bar motion Gearbox first prototype design Testing set up Friction rollers Force sensor
  9. 9. Market <ul><li>Portland regularly ranks at the top of Bicycling Magazine’s list of the best cycling cities. </li></ul><ul><li>Portland’s bicycle-related industry was worth $60 million in 2007. </li></ul><ul><li>Nation’s highest % of workers who commute by bike, about 3.5%. </li></ul><ul><li>The market is increasing yet stable and will continue to thrive with popularity in the sport starting to increase. </li></ul><ul><li>6 Billion Dollar Industry in the US. </li></ul><ul><li>Bike Industry is growing at a rate of 6.4%. </li></ul><ul><li>Headquarters will be located in Portland, Oregon. </li></ul>
  10. 10. Competition <ul><li>The bicycle industry is divided into 4 different distribution channels. </li></ul><ul><ul><li>I. Specialty 49% II. Full Line 8% </li></ul></ul><ul><ul><li>III. Other 6% IV. Mass Merchants 37% </li></ul></ul><ul><li>Niche </li></ul><ul><ul><li>Having a standardized internal drive system will set us apart from the competition. </li></ul></ul>
  11. 11. Income <ul><li>Revenue: </li></ul><ul><ul><li>Online </li></ul></ul><ul><ul><li>Bicycle Retailer </li></ul></ul><ul><ul><ul><li>Purchase bikes at a discount or wholesale </li></ul></ul></ul><ul><li>The revenue comes directly from the profits made from selling complete bicycles online or to distributors for a wholesale pricing. </li></ul>
  12. 12. Risk Assessment <ul><li>Design might not meet expectations </li></ul><ul><ul><li>Final prototype will be tested by competitive bikers and bicycle enthusiasts </li></ul></ul><ul><ul><ul><li>Initial scores will be a comparison to their bicycle of choice </li></ul></ul></ul><ul><li>Market Acceptance of the internal gearbox </li></ul><ul><ul><li>Bike shows, shopping mall, and public event displays </li></ul></ul><ul><ul><ul><li>Attempt to gather consumer response through surveys </li></ul></ul></ul><ul><ul><ul><ul><li>Provide market acceptability and consumer reaction </li></ul></ul></ul></ul>
  13. 13. Operations
  14. 14. Projected Prototype Funding <ul><li>TASK 1 (in progress) </li></ul><ul><li>Facilities $500 </li></ul><ul><li>Salaries $7000 </li></ul><ul><li>Consulting $250 </li></ul><ul><li>Direct Costs </li></ul><ul><li>Parts $250 </li></ul><ul><li>Labor $500 </li></ul><ul><li>TOTAL $8,500 </li></ul><ul><li>TASK 2 </li></ul><ul><li>Facilities $500 </li></ul><ul><li>Salaries $6000 </li></ul><ul><li>Consulting $500 </li></ul><ul><li>Direct Costs </li></ul><ul><li>Parts $2000 </li></ul><ul><li>Labor $2000 </li></ul><ul><li>TOTAL $11,000 </li></ul>
  15. 15. Projected Prototype Funding Cont. <ul><li>TASK 3 </li></ul><ul><li>Facilities $500 </li></ul><ul><li>Salaries $6500 </li></ul><ul><li>Consulting $1000 </li></ul><ul><li>Direct Costs </li></ul><ul><li>Parts $4000 </li></ul><ul><li>Labor $6000 </li></ul><ul><li>TOTAL $18,000 </li></ul><ul><li>TASK 4 </li></ul><ul><li>Facilities $1000 </li></ul><ul><li>Salaries $7000 </li></ul><ul><li>Consulting $1000 </li></ul><ul><li>Direct Costs </li></ul><ul><li>Parts $1000 </li></ul><ul><li>Labor $1000 </li></ul><ul><li>Testing $3000 </li></ul><ul><li>TOTAL $14,000 </li></ul>
  16. 16. Financing <ul><li>Required Capital </li></ul><ul><li>Year 1 </li></ul><ul><ul><li>October- $35,000 </li></ul></ul><ul><ul><li>Founders, Friends, Family </li></ul></ul><ul><ul><li>Infusions </li></ul></ul><ul><ul><ul><li>April - September </li></ul></ul></ul><ul><ul><ul><li>Total $200,000 </li></ul></ul></ul><ul><li>Willing to give up 29% of equity </li></ul>
  17. 17. Benchmarks and Goals <ul><li>Year 1 </li></ul><ul><ul><li>First 3 months </li></ul></ul><ul><ul><ul><li>Design gearbox and frames </li></ul></ul></ul><ul><ul><ul><li>Acquire patents </li></ul></ul></ul><ul><ul><li>Second 3 months </li></ul></ul><ul><ul><ul><li>Market testing </li></ul></ul></ul><ul><ul><li>Second 6 months </li></ul></ul><ul><ul><ul><li>begin acquiring distributors </li></ul></ul></ul><ul><li>Year 2 </li></ul><ul><ul><li>Official introduction in to market </li></ul></ul><ul><ul><li>1,500 bikes sold, $900,000 sales </li></ul></ul><ul><li>Year 5 </li></ul><ul><ul><li>$3,000,000 in sales </li></ul></ul><ul><ul><li>International Sales & 1% of market </li></ul></ul><ul><ul><li>Buy out investors </li></ul></ul>
  18. 18. Projections Net Profit Margin: 33% Year 1 Year 2 Year 3 Year 4 Year 5 Net Income $34,017 $837,573 $816,486 $1,098,365 $1,329,750 Revenue $857,709 $2,152,894 $2,583,813 $3,358,957 $4,030,749 Cash ($106,548) $706,871 $1,123,731 $2,093,223 $3,323,713
  19. 19. Breakeven
  20. 20. Exit Strategy <ul><li>Buy out investor at 7 times their original investment </li></ul><ul><ul><li>Investor: $1,400,000 – year 5 </li></ul></ul><ul><li>Year 10 or $50 million: </li></ul><ul><ul><li>Reevaluate </li></ul></ul><ul><ul><ul><li>Single founder sell </li></ul></ul></ul><ul><ul><ul><ul><li>Shares will be purchased from remaining founders </li></ul></ul></ul></ul><ul><ul><ul><li>Continue operation </li></ul></ul></ul><ul><ul><ul><li>Acquisition </li></ul></ul></ul><ul><ul><ul><li>All founders step down </li></ul></ul></ul><ul><ul><ul><ul><li>Retain shares; board members </li></ul></ul></ul></ul>
  21. 21. Questions