Welcome to The Greenhouse Executive Summary Presentation. My name is Weston Bergmann, the founder of the first environmentally friendly and socially responsible business incubator in the world. This presentation is an extrapolation of a one page executive summary taken from The official Business Plan. It is meant to generally describe what The Greenhouse is, who our customers are, and why there is such a big opportunity. In my mind there is no doubt that an attentive potential investor will have many questions at the end of this presentation. Information on how to acquire the business plan, as well as a formal meeting with the founder is provided at the end of the presentation. Thank you for your time and attention. Let’s begin. . . .
Business incubation is a relatively new investment platform. As the “incubator” metaphor suggests, a business incubator protects and nurtures its clients before releasing them into a competitive business environment. Most programs supplement their clients opening years by providing office space, consultation, computers, and more. Many incubators charge a flat rent for these services (usually financing the cost during the incubation term), while others take an equity stake in the client companies in exchange for services. Start-up companies provide the highest rate of returns compared to all other investment stages, however they are also the riskiest. Business incubation is proven to greatly increase a start-up firms survival rate while supplementing it’s traditionally high growth potential.
The Greenhouse is a business incubator that helps high-growth potential start-up companies through the early stages of business. We will do so by providing a plethora of value-adding services to our clients such as working capital, office space, computers, internet and phone service, as well as support services, like access to capital, website and video production, an entrepreneurial boot camp, in-house business consultation, and strategic planning. . Each client will have one year in the incubator before graduating and being transplanted into the real world business environment. The Greenhouse will incubate ten companies a year for four years creating a combined client pool of forty companies. The Greenhouse is differentiated from other incubators for a handful of reasons, but the biggest two being that we will exclusively represent environmentally friendly and socially responsible companies, as well as take equity as the only form of payment client companies incur.
$400,000 is sought in the first stage of financing that will be split into four $100,000 shares. The return on investment will be over 50% annually by year ten. This money will be used to purchase a small share (5-10%) of ten businesses a year, for four years; creating a combined pool of forty companies. The investors will own 70% of said pool. After four years: operations will be terminated and profits will be disbursed quarterly forever.
The Greenhouses primary customer is the American entrepreneur. In the United States, entrepreneurs start between 3 - 4.5 million businesses a year, and approximately 10.5% of Americans are actively involved in trying to start a new business. Start-up companies tend to be the riskiest type of investment, but also contain the highest potential for growth. According to The United State’s Private Equity Performance index (PEPI) early or seed stage investments averaged a 93.7% ROI after just three years which is about three times as high as later stage investment Return on Investments
The Greenhouse’s secondary customers are investors for our clients. In 2006 365 Billion was spent on private equity investments in the United States alone. 48 Eligible and responsive incubators reported an average of $20 million in combined equity investments in the same year. The reason it has been so easy to find investors is there is a lot of them. Six million Americans qualify as accredited investors by the securities and exchange commission meaning they each have individual net worths of over one million dollars. A team of venture capital agents will be formed to find these types of investors for our clients. The result will increase the value and longevity of our current share.
The distribution of The Greenhouse’s incubation services will take place in a 5k-10k square-foot office space in Johnson County. It is preferred that the office space be owned to take advantage of the current real estate market and to make possible the conversion of the property for LEED certification. LEED certification will increase the value of the office space, decrease the cost of utilities, provide PR opportunities, and support the environmentally friendly image that The Greenhouse promotes through its client companies. - Leawood’s residents are extremely affluent, especially relative to other midwest cities. This pool of people will have two major implications on The Greenhouse’s client companies: first, to be wealthy patrons of new business, and secondly to further invest in the start-up companies ultimately improving their likelihood of success, and increasing the value of The Greenhouse’s shares. The median Household Income is$98,727, compared to The United States Median Household Income of $54,749. 49.5% Of Leawood households make over $100,000 a year, compared to only 19.6% of Americans in general. The Per Capita Income ranks in the top 98 percentile of entire country. Don’t expect any of this to change soon for the expected future job growth is 18.26%, compared to that of 11.90% for the rest of the country.
The incubation process has been proven to mitigate traditional risks associated with start-up companies, as well as retain their growth potential. According to the National Business Incubator Association (NBIA) 87% of all incubated companies are still in business. In 2006 The State of Business Incubation Industry (SOI) studied 67 incubators whom clients produced over $36 million of revenue while in the program.
The Greenhouse also has a very profitable “triple bottom line” by creating hundreds of jobs, millions of tax dollars, and ultimately producing technologies and sustainable business processes that will work to protect the environment for which we do business. Because of all of this incubators are seen as powerful tools for helping the economy. Traditionally, powerful economic tools - especially environmentally friendly ones - are awarded and eligible for many private and governmental grants, loans and subsidies that we will use to supplement our client companies value.
In conclusion there is a seemingly infinite amount of entrepreneurs starting businesses in the United States every year. The Greenhouse will find ten of these companies a year and provide a barrage of entrepreneurial consulting services in order to increase each firms chances of survival in the real world. A survival rate statistic that has been proven to be as high as 87% in incubated companies. The investments will take advantage of a traditional start-up companies high growth potential which is known to be dramatically higher then later stage investment opportunities. A team of venture capital agents will be formed to locate additional sources of financing for The Greenhouse’s clients. The additional private equity investments will increase the individual firms chances of survival, growth potential, and return on investment. If it isn’t enough that there is a an opportunity for an above average return on investment The Greenhouse will be stimulating the economy through the creation of hundreds of jobs and millions of dollars in taxes. The project will provide an opportunity and a level playing field for new and young entrepreneurs to fulfill their dreams. The result will change the lives of many in a more powerful way then any other typical form of investment.
The Greenhouse business plan is complete and available upon request. Only one copy of the document has and will be created. Interested investors must set up a time to screen the plan in my presence. Full length plans will be provided to investors that are paid-in-full. The document is 38 pages of strategic plans and market research. It details The Greenhouse’s forecasted profits, cash flow, and income statements in a series of sensitivity analysis. The majority of the plan, as well as this presentation’s information and statistics have come from secondary research provided by The National Business Incubator Association.
<ul><li>A metaphor for housing start-up companies during their most vulnerable stages of business </li></ul><ul><li>Value-adding services: office space, consultation, computers, access to financing, and more </li></ul><ul><li>Proven to increase the likelihood of success a start-up company experiences </li></ul>What is Business Incubation
<ul><li>The Greenhouse is a business incubator that will exclusively represent environmentally friendly and socially responsible companies </li></ul><ul><li>Invest in ten (10) companies annually, over the course of four (4) years, creating a client pool of forty (40) companies </li></ul><ul><li>Take equity from clients: no flat rates, no debt. </li></ul>What is The Greenhouse
<ul><li>Seeking to pool $3,500,000 from up to 35 qualified investors </li></ul><ul><li>Investment will be used to purchase a 5-10% equity stake in each company, as well as the facility for which The Greenhouse will incubate </li></ul>Investment <ul><li>Investments will be made for four years, the building will be sold, & profits will be disbursed quarterly for the life of the client companies </li></ul>
<ul><li>3 - 4.5 Million Businesses started a year in U.S. </li></ul><ul><li>10.5% of Americans actively involved in starting a business </li></ul><ul><li>Early/Seed stage investments averaged 93.7% ROI after 3 years (PEPI) </li></ul>Primary Customer - Entrepreneurs
<ul><li>2006 - 365 Billion spent on private equity investments in U.S. alone </li></ul><ul><li>Average incubator finds $20 Million in private-equity for its’ clients PER year </li></ul><ul><li>6 Million Americans qualify as accredited Investors </li></ul>Secondary Customer - Investors
<ul><li>Leawood, KS is one of the most affluent cities in the world boasting a household income nearly twice that of the national average </li></ul><ul><li>A robust culture of business and entrepreneurial support systems </li></ul>Location/Distribution <ul><li>5,000 Square foot, LEED certified (Green), office space, purchased at an economic time when real estate is at its cheapest </li></ul>
<ul><li>Higher Rate of Survival - 87% of Incubated businesses are still in business </li></ul><ul><li>Beyond Average Client Revenues - $36 Million Average Incubator Combined Client Revenues </li></ul>The Incubation Process
<ul><li>Creation of hundreds of jobs </li></ul><ul><li>Millions of dollars in taxes for local/national economy </li></ul><ul><li>Creation of eco-friendly and socially responsible products and business processes </li></ul>Benefits to Society
<ul><li>Purchase real estate at a time when it’s at its cheapest </li></ul><ul><li>Provide a plethora of entrepreneurial services </li></ul><ul><li>Take advantage of a traditional start-up companies high growth potential </li></ul><ul><li>Supplement client value, growth potential, and longevity with private equity investments </li></ul>Summary
<ul><li>Business plan is complete and available (in person) upon request </li></ul><ul><li>51 pages in length </li></ul><ul><li>Majority of official research cited by the NBIA </li></ul>Business Plan