1. Confiden'al
[DRAFT]
Founders
Fund
October
6,
2011
1

2. Confiden'al
[DRAFT]
BUSINESS
PLAN
2

3. Confiden'al
[DRAFT]
Merchant
Needs
3

4. Confiden'al
[DRAFT]
Problem
Tradi1onal
loyalty
programs
are
ineffec1ve
• No
switching
costs
• No
pull
un1l
final
visit
4

5. Confiden'al
[DRAFT]
Solution
Prepaid
store
credit
guarantees
loyalty
5

6. Confiden'al
[DRAFT]
What
We
Are
Mobile
wallet
and
marketplace
for
prepaid
store
credit.
Customers
get
more
than
they
pay
for.
Credit
is
redeemed
with
your
phone.
6

7. Confiden'al
[DRAFT]
Illustrative
Business
Model
$120
Merchant
Credit
Customer
Merchant
Instant
Gra6fica6on
$100
$95
Guaranteed
Cash
Loyalty
$100
Cash
7
$5
5%
PrePay
Commission

8. Confiden'al
[DRAFT]
Illustrative
Transaction
Pro>it
$100.00
$5.00
$2.50
gross
5%
50%
revenue
net
revenue
gross
margin
95%
of
gross
revenue
deposited
to
merchant
2.4%
+
$0.10
8
for
credit
card
&
processing
charges

9. Confiden'al
[DRAFT]
Selected
Merchants
9

10. Confiden'al
[DRAFT]
Merchant
Value
Proposition
• Improving
cash
flow
posi1on
• Upfront
cash
for
mul1ple
visits
worth
of
store
credit
• Save
on
credit
card
fees
• Ensuring
customers
have
remaining
credit
balance
• Increased
repeat
business
• Higher
average
spend
• Free
and
easy
to
use
mobile
payment
technology
• No
hardware
or
soVware
integra1on
• Customer
analy1cs
and
email
list
10

11. Confiden'al
[DRAFT]
Ef>icient
Scaling
• Merchant
• Faceless
merchant
signup
process
• Targeted
direct
sales
and
merchant
referrals
• Pools
of
money
that
can
only
be
tapped
into
by
accep1ng
PrePay
• Customer
• In-­‐store
marke1ng
since
target
customer
is
already
at
the
merchant
• Exis1ng
customers
easily
discover
other
nearby
merchants
from
app
• API
turns
any
loca1on
based
app
into
a
prepaid
mobile
wallet
• Unique
opportuni1es
for
mass
customer
adop1on
11

12. Confiden'al
[DRAFT]
Opportunity
Size
880,000
$31,500
$28
Billion
Universe
of
5-­‐Yr
LTV
/
Opportunity
Merchant
Merchant
Value
Loca1ons
Targe6ng
8%
of
the
addressable
market
by
the
end
of
Year
3.
This
represents
71,300
merchants,
or
$2.3
billion
of
value.
12

13. Confiden'al
[DRAFT]
Current
Status
• First
merchant
live
since
July
14,
2011
• Executed
agreements
with
over
40
merchant
loca1ons
• 250
paid
customers
originated
over
$25k
of
credit
• Processed
over
1,300
purchases
and
redemp1ons
• Average
purchase
is
$67
• Merchants
hold
on
average
20%
float
(net
of
fees)
• Zero
chargebacks,
merchant
aeri1on,
or
paid
adver1sing
• Currently
available
on
iPhone
and
iPad
• Android
app
would
double
traffic
based
on
surveys
13
• 2
funded
startups
want
to
integrate
with
our
API

14. Confiden'al
[DRAFT]
Budgeted
Investment
of
$1M
Other
Fixed
10%
Sales
Salary
32%
Marke1ng
43%
Other
Salary
15%
14

15. Confiden'al
[DRAFT]
Additional
Revenue
Channels
• GiVing
-­‐
credit
can
be
giVed
to
non-­‐PrePay
users
• API
–
distribute
prepaid
deals
through
third-­‐party
apps
• Credit
exchange
-­‐
exclusive
intermediary
in
trade/buyback
of
credits
• Corpora1ons
-­‐
expense
account
and
employee
perk
program
• Schools
-­‐
dining
plan
and
grocery
store
voucher
program
• Parents
-­‐
give
control
over
where
money
can
be
spent
by
dependencies
• Coupon
books
-­‐
subscrip1on
based
curated
store
credit
samplings
• Financial
services
-­‐
beeer
informa1on
than
banks
for
merchant
loans
• Taxis
-­‐
significantly
lower
credit
card
processing
costs
15
• Na1onal
chains
-­‐
significantly
lower
distribu1on
costs

16. Confiden'al
[DRAFT]
PrePay
Team
• Lead
Developer
at
• Private
equity
/
banking
• Private
equity
/
banking
AppMakr
(raised
$1M)
focused
on
restaurants
(5
yrs)
focused
on
FIG
(4
yrs)
• Duke
University,
• Duke
University,
• Carnegie
Mellon,
Economics
Electrical
Engineering
Finance
&
History
Advisors
16
Rich
Aberman

17. Confiden'al
[DRAFT]
Why
Us?
• Team
has
significant
domain
exper1se
• In
restaurant
opera1ons,
finance,
and
engineering
• We
have
a
scalable
product
that
is
live
and
con1nually
evolving
• For
the
merchant,
customer,
and
addi1onal
revenue
channels
• Demonstrated
merchant
and
customer
trac1on
17

18. Confiden'al
[DRAFT]
Contact
Us
Brian
Schwartz
(301)
758-­‐2342
brian@prepaysave.com
Eric
Schwartz
(301)
785-­‐0831
eric@prepaysave.com
18

19. Confiden'al
[DRAFT]
APPENDIX:
BUSINESS
MODEL
19

20. Confiden'al
[DRAFT]
Business
Plan:
Phase
I
Input
Drivers
Descrip6on
Merchants
• Ramp
up
to
125
new
merchants
/
month
in
San
Francisco
• Target
650
merchant
loca1ons
by
March
2012
Customers
• Grow
ac1ve
customers
/
merchant
by
20%
per
month
• 27
customers
/
merchant
by
March
2012
• 16K
accounts
doing
22k
transac1ons
/
month
by
March
2012
Revenue
• Average
credit
purchase
of
$63.60
with
17%
reward
• Average
4
days
between
visits
• Commission
of
5%
Marginal
Costs
• Increase
gross
margins
from
42.0%
to
45.9%
by
March
2012
• 100%
credit
card,
0%
ACH
transac1ons
• $0.10
+
2.4%
on
all
new
credit
purchased
• $0.30
on
ACH
deposit
to
merchants
Human
• Add
3
engineers
/designer
Resources
• Add
5
salesman
each
targe1ng
a
separate
neighborhood
20
• Add
1
customer
support
staff
Revenue
&
Marginal
Cost
assump6ons
based
on
current
performance.

21. Confiden'al
[DRAFT]
Customers:
Months
1
–
6
1,000
250
900
800
200
700
Customers
/
Merchant
Ending
Merchants
600
150
500
400
100
300
200
50
100
21
0
-­‐
Aug-­‐2011
Sep-­‐2011
Oct-­‐2011
Nov-­‐2011
Dec-­‐2011
Jan-­‐2012
Feb-­‐2012
Mar-­‐2012
Ending
Merchants
Customers
/
Merchant

22. Confiden'al
[DRAFT]
Financials:
Months
1
–
6
$80,000
100.0%
90.0%
$70,000
80.0%
$60,000
70.0%
Change
in
Credit
Monthly
Net
Revenue
$50,000
Gross
Margin
(%)
Card
Rates
60.0%
$40,000
50.0%
40.0%
$30,000
30.0%
$20,000
20.0%
$10,000
10.0%
$0
0.0%
22
Aug-­‐2011
Sep-­‐2011
Oct-­‐2011
Nov-­‐2011
Dec-­‐2011
Jan-­‐2012
Feb-­‐2012
Mar-­‐2012
Monthly
Net
Revenue
Gross
Margin

23. Confiden'al
[DRAFT]
Cash
Flow:
Months
1
–
6
$150,000
$100,000
$50,000
$0
($50,000)
($100,000)
23
($150,000)
Aug-­‐2011
Sep-­‐2011
Oct-­‐2011
Nov-­‐2011
Dec-­‐2011
Jan-­‐2012
Feb-­‐2012
Mar-­‐2012

24. Confiden'al
[DRAFT]
Business
Plan:
Phase
II
Input
Drivers
Descrip6on
Merchants
• Expand
to
New
York,
Los
Angeles,
Chicago,
and
Houston
• Ramp
up
to
500
new
merchants
/
month,
which
is
125
/
city
• Target
3,000
merchants
by
September
2012
Customers
• Grow
ac1ve
customers
/
merchant
by
20%
per
month
• 82
customers
/
merchant
by
September
2012
• 225k
accounts
doing
306k
transac1ons
/
month
by
September
2012
Revenue
• Average
credit
purchase
of
$63.60
with
17%
reward
• Average
4
days
between
visits
• Commission
of
5%
Marginal
Costs
• Increase
gross
margins
to
49.1%
by
September
2012
• Begin
moving
2%
customers
/
month
to
ACH
beginning
July
2012
• $0.10
+
2.4%
on
all
new
credit
purchased
• $0.30
on
ACH
deposit
to
merchants
Human
• Add
2
engineers
Resources
• Add
15
salesman
(5
/
city)
24
• Add
2
customer
support
staff
Reach
posi6ve
cash
flow
by
August
2012.

25. Confiden'al
[DRAFT]
Customers:
Months
7
–
12
3,500
250
3,000
200
2,500
Customers
/
Merchant
Ending
Merchants
150
2,000
1,500
100
1,000
50
500
25
0
-­‐
Mar-­‐2012
Apr-­‐2012
May-­‐2012
Jun-­‐2012
Jul-­‐2012
Aug-­‐2012
Sep-­‐2012
Ending
Merchants
Customers
/
Merchant

26. Confiden'al
[DRAFT]
Financials:
Months
7
–
12
$1,000,000
100.0%
$900,000
90.0%
$800,000
80.0%
$700,000
70.0%
Monthly
Net
Revenue
Gross
Margin
(%)
$600,000
60.0%
$500,000
50.0%
$400,000
40.0%
$300,000
30.0%
$200,000
20.0%
$100,000
10.0%
$0
0.0%
26
Mar-­‐2012
Apr-­‐2012
May-­‐2012
Jun-­‐2012
Jul-­‐2012
Aug-­‐2012
Sep-­‐2012
Monthly
Net
Revenue
Gross
Margin

27. Confiden'al
[DRAFT]
Cash
Flow:
Months
7
–
12
$250,000
$200,000
$150,000
Cash
Flow
Inflec6on
Point
$100,000
$50,000
$0
($50,000)
($100,000)
27
($150,000)
Mar-­‐2012
Apr-­‐2012
May-­‐2012
Jun-­‐2012
Jul-­‐2012
Aug-­‐2012
Sep-­‐2012

28. Confiden'al
[DRAFT]
Business
Plan:
Phase
III
Input
Drivers
Descrip6on
Merchants
• Expand
to
next
20
largest
ci1es
by
popula1on
• Target
15,100
merchants
by
March
2013
Customers
• Reach
steady
state
for
average
ac1ve
customers
/
merchant
• 200
customers
/
merchant
by
March
2013
• 2.7M
accounts
doing
3.8M
transac1ons
/
month
by
March
2013
Revenue
• Average
credit
purchase
of
$63.60
with
17%
reward
• Average
4
days
between
visits
• Commission
of
5%
Marginal
Costs
• Increase
gross
margins
to
54.3%
by
March
2013
• Reach
18%
ACH
transac1ons
by
March
2013
• $0.10
+
2.4%
on
all
new
credit
purchased
• $0.30
on
ACH
deposit
to
merchants
28
Human
• Add
88
salesman
(5
/
city)
Resources
• Add
2-­‐3
customer
support
staff
/
month

29. Confiden'al
[DRAFT]
Customers:
Months
13
–
18
16,000
250
14,000
200
12,000
Customers
/
Merchant
10,000
Ending
Merchants
150
8,000
100
6,000
4,000
50
2,000
29
0
-­‐
Sep-­‐2012
Oct-­‐2012
Nov-­‐2012
Dec-­‐2012
Jan-­‐2013
Feb-­‐2013
Mar-­‐2013
Ending
Merchants
Customers
/
Merchant

30. Confiden'al
[DRAFT]
Financials:
Months
13
–
18
$14,000,000
100.0%
90.0%
$12,000,000
80.0%
$10,000,000
70.0%
Monthly
Net
Revenue
Gross
Margin
(%)
60.0%
$8,000,000
50.0%
$6,000,000
40.0%
$4,000,000
30.0%
20.0%
$2,000,000
10.0%
$0
0.0%
30
Sep-­‐2012
Oct-­‐2012
Nov-­‐2012
Dec-­‐2012
Jan-­‐2013
Feb-­‐2013
Mar-­‐2013
Monthly
Net
Revenue
Gross
Margin

31. Confiden'al
[DRAFT]
Cash
Flow:
Months
13
–
18
$4,000,000
$3,500,000
$3,000,000
$2,500,000
$2,000,000
$1,500,000
$1,000,000
$500,000
31
$0
Sep-­‐2012
Oct-­‐2012
Nov-­‐2012
Dec-­‐2012
Jan-­‐2013
Feb-­‐2013
Mar-­‐2013

32. Confiden'al
[DRAFT]
Business
Plan:
At
Scale
in
Year
3
Input
Drivers
Descrip6on
Merchants
• Grow
at
2,700
merchants
/
month
with
exis1ng
sales
force
by
expanding
into
new
ci1es
• Target
71,800
merchant
loca1ons
by
December
2014
Customers
• Maintain
steady
state
penetra1on
of
200
customers
/
merchant
• 14M
accounts
doing
19M
transac1ons
/
month
by
December
2014
Revenue
• Average
credit
purchase
of
$63.60
with
17%
reward
• Average
4
days
between
visits
• Commission
of
5%
Marginal
Costs
• Increase
gross
margins
to
67.5%
by
December
2014
• Reach
steady
state
of
50%
ACH
transac1ons
by
December
2014
• $0.10
+
2.4%
on
all
new
credit
purchased
• $0.30
on
ACH
deposit
to
merchants
Human
• Add
2-­‐3
customer
support
staff
/
month
32
Resources