investor presentation 51314
TRANSCRIPT
EXECUTIVE SUMMARY
Currently no providers that provide and interconnection between shopping with
charitable giving in a seamless and integrated manner- (embedded on the retailer site at checkout and resident on the Charity site)
Locally based at first (local charities, food banks and community organizations) then
national and regional (with bigger players). Selected charities have a stake in the business as Class B shareholders
Tuition bank provides assistance to any Student enrolled in a accredited US College or
University- students become major users of Sparo and becoming loyalty debit card holders Patented technology is hard to replicate and rebuild
Change platform- (not just a payment solution or online giving marketplace) which
inspires community building
Seeking Meaningful Ownership - $1M investment for 20% Equity position. Preferably an investor with e-Commerce experience and networking relationships with Merchants and Charitable organizations.
"What if every purchase made online resulted in a charitable donation and each donation led to more purchases?“
• In December of 2012, a small group of people came together and talked about their desire to make the world a better place.
• It is a known fact that people genuinely want to give more. What if we gave them an easy and rewarding way to do more good? After much research and thought, our team came up with a solution: an application, unobtrusively embedded at an on-line checkout allowing online shoppers to donate a portion of their purchase to the charity of their choice….not the Merchant’s choice.
• “In allowing people to support their favorite charity by simply purchasing from sites they already trust, we could enable millions of shoppers to do more good and ultimately "Purchase with a Purpose™.“
• Sparo's purpose is threefold. 1) It allows everyone to do more good and more often through their everyday purchases, 2) provides merchants a way in which they can contribute to the causes that their customers care about, 3) gives Charities a role in the e-commerce business and advances the good work that charities do for their community everyday.
BACKGROUND
Structure and Ownership
Sparo – Maryland Registered LLC company
Rob Sobhani – Founder 100% of the Common Stock. Invested $700k
Employees (5) – Option Holders Assets
Patents – Provisional patents filed November 2013
Personnel – Developers, Management, Finance, e-commerce Marketing, IT and on-line Sales
Fully functional website, transaction-based platform and database management systems
Strategic Relationships and Partnerships
C5i – IT security and outsourced database management
Citron Clothing
Washington Times
SPARO PROFILE
Sparo gives customers ability to chose the charity they want and charities help promote the merchants
THE CHARITY DIFFERENCE – You Choose Your Charities
• Most company-sponsored charitable initiatives often focuses on only one cause at a time, usually catering solely to a specific group of people, and neglecting a majority of potentially loyal customers who care about other causes.
• Select charities are class B shareholders in Sparo and have agreed to share information about Sparo to their donor base.
Seamless Integration for the Merchant and Shopper) on the checkout cart
THE POINT OF SALE – The Checkout Page
Unlike other online charitable solutions, the Sparo solution is seamlessly integrated on the retail website on the checkout pages. The customer is not required to go through a separate website or download a widget to execute the donation. This provides a significant advantage (no barriers to transact) for Sparo over its competitors, enabling and causing many more donations per transaction.
Sparo's online tuition bank provides tuition assistance for students enrolled in an accredited US college or university.
Sparo sets aside a percentage on
every merchant transaction to be donated as a grant to an enrolled Sparo student.
Grants are disbursed every time the
tuition bank reaches $5k per student through a random selection.
Students are encouraged to shop with
Sparo merchants and share with friends and family this unique value proposition- promoting further shopping with Sparo.
First ever Online Tuition Assistance Program that works with Sparo application to provide grants to students enrolled in Sparo
ONE WAY WE HELP – Paid College Tuition is a Reality
THE CONSUMER CHOICE – Donate Now OR Visit Later
The customer has the ability to direct a portion of the value of the transaction to a charity that they care about or save the donation to their piggy for a later disbursement. Sparo is a catalyst for driving more traffic (both unique and repeat) to a customer’s website through a save & donate later feature
Donate now or save for a later date through a banking feature
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CUSTOMER APPEAL – It’s Simple & It’s Possible
An independent study was done with 1,000 online shoppers to rate the Sparo Experience
* Online Survey conducted with panel of 1,011 online shoppers ages 18 – 64 years old
88% of
consumers say
they would
participate in Sparo
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Shoppers are more likely to shop at Sparo retail partners and Shoppers are more likely to donate to their favorite Charities
Consumers would like retailers a lot
more if they utilized Sparo
CUSTOMER APPEAL – Shopping Donation Shopping
Shoppers are more likely to convert if
Sparo is a partner
MARKET POTENTIAL – We’re Equipped For Growth
50%
40%
10%
Other smaller online donation facillitators (Recoup, charities, retailer option at checkout...)
Online Marketplaces (iGive, SocialVest, DailyGood)
Paypal
There is currently no single player that dominates the online giving space.
The market is fragmented with many small players such as online giving marketplaces, charities partnering directly with retailers and daily shopping lists.
Sparo has the unique and timely opportunity to dominate in a rapidly emerging market
EXPONETIAL GROWTH – The Right Choice, Right Time
US online retails sales will grow from $225.5 Billion in 2012 to $434.2 in 2017 according to eMarketer
Our goal is to capture anywhere between 0.1% to 1% of this market, which equates to gross revenues between $300M and $3.27B by 2016.
COMPETITVE MATRIX – The Difference That Matters
KEY ASSUMPTIONS & MILESTONES - First 12 Mths
1. Average No. Online Transactions per Month
Small Customers 500
Medium Customers 10,000
Large Customers 1,000,000
Mega Customers 5,000,000
2. Average Value per Transaction $125
3. % of On-line Transactions using Sparo 53%
4. Average % of Transaction to Donation 3.9%
5. Sparo Revenue Share of Donation 50.0%
6. Total Active Customers at Year End 15
Small Customers 11
Medium Customers 3
Large Customers 1
Mega Customers 0
7. % of Yr 1. Breakeven Achieved - Merchants Sold 109%
8. Total FTE's 10
9. Cash on Hand as % of Total Funding Amount 0%
FINANCIAL SUMMARY
($Million's) Year 1 Year 2 Year 3 Year 4 Year 5
Income Statement
Revenue $1.8 $28.0 $64.1 $142.6 $282.8
Revenue growth 1455% 129% 123% 98%
Gross Profit $1.4 $20.1 $48.7 $107.9 $209.1
Gross Margin % 79% 72% 76% 76% 74%
Operating Expenses $1.3 $9.9 $20.4 $38.1 $62.6
EBITDA $0.1 $10.2 $28.4 $69.8 $146.5
EBITDA Margin % 6% 36% 44% 49% 52%
Balance Sheet
Cash on Hand $1.2 $16.0 $37.2 $88.2 $193.9
Total Assets $1.4 $17.4 $40.0 $94.2 $205.1
Shareholders' Equity $1.2 $14.4 $33.9 $81.7 $181.7
Cash Flow
CapEx $0.1 $0.8 $1.0 $1.9 $2.5Net Operating C/Flow $0.1 $14.8 $21.2 $51.0 $105.7
Investment (Funding Requirement) $1,040.0
IRR 1674%
Positive Cashflow - Months (from inception) 15.0
Investment Payback - Months 21.6
USE OF PROCEEDS – Sales Drives Investment
First Year Budgeted Expenses • Hire an additional 5 people – Sales (Merchants), Marketing (Merchants, Charities and Shoppers)and IT Network and Operations
- Cost of Consultants and Employees: $900k - Sales-related expenses (incl Commissions): $100k
• Marketing Program Cost to source Merchants, Charities and Customers: $120k • General & Admin Cost – Prof Fees, Office Set-up, Licensing, Insurance and other general overhead: $120k
• Variable Expense - Outsourced Cost of Service: Billing and Charity Payments, IT Managed Service, CSC and Technical Support and Network interconnection: $300k
NEAR TERM OPPORTUNITIES AND NEXT STEPS
Phase 1
Inception & Launch
Phase 2
Reach & Rollout
Phase 3
Growth & Expand
Timeline August 2013- Dec 2013 Jan 2014- July 2014 July 2014 - onwards
Technology
Sparo API Developed and
launched on Citronclothing.com
collecting donations for all
transaction selecting API
Interim website launched
Launched new member site with
added functionality
• Scaling Technology for larger
retailers (completed by end of
Q1’14)
• Development of Tuition Bank
• Launch API on the Washington
Times (TWT0 by Q1’14
• Launch of online Tuition
Bank with major retailer
• Enhancement to API and full
ecommerce capability on
Sparo.com
• Automated ability for small
merchants to download API
• Sparo credit card
Business
Development
Enrolled 20 charities
Preliminary Discussions with
key retailers such as
Quicksilver, Brighton Jewelers,
UT San Diego & Auto Supply
Chain Stores
Signed The Washington Times for
all subscriptions types
• Continue discussions with key
merchants- sign 2-3 medium/large
merchants (Revenues >$500k)
• Continue signing charities relevant
to new merchant signings
• Launch and integration with
major retailer such as
Target, JC Penny or Staples
• >20 small-medium size
merchants partnering with
Sparo (Revenues >$250k)
• > 150 Charities partnering
with Sparo
Marketing
Developed all charity collateral
and all marketing assets
Marketed with Citron increasing
revenues by 25% since launch
Launching promotional campaigns
for Citron with key charities (Save a
Child’s Heart & San Marin Food
Bank)
Developing Marketing plan with
TWT for launch
• Sparo 360 member
marketing
• PR campaign for Tuition
Bank with large retailer
THANK YOU Ian Gerrard – Financial Advisor [email protected] 571 422-1783 Rob Sobhani – CEO [email protected] 240 401-8930