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ETHOSVALUABLE OUTCOMES
ETHOSVALUABLE OUTCOMES
http://ethosvo.org
ETHOSVALUABLE OUTCOMES
2012 Share offerRobert Pye
Air Commodore Andy Fryer
Major General Lamont Kirkland CBE
Tony Clarke
Gerald Callus
ETHOSVALUABLE OUTCOMES
ETHOSVALUABLE OUTCOMES
Agenda
• Ethos VO
• The offer
• Key people
• Concept
• Strategy
• Cluster 1: London / local government / Aldershot
• The business plan
• The exit
• Tennis Centre
• Our DD steps to completion
• Agree next steps / actions
ETHOSVALUABLE OUTCOMES
The Ethos VO offer 2012
Equity
• Ethos VO Ltd divided into 100m shares.
• Target exit value = £100m in five years
Offer
• Up to 20% (20m shares) of Ethos VO Ltd to be sold for £4m
• 10% of equity allocated to 12 most valuable members (see annex)
• Remaining 70% to be allocated over next five years
• No dilution necessary
• £100k = 500k shares = 0.5% of Ethos VO Ltd.
• Target value of shares on exit = £500k (x5 investment)
ETHOSVALUABLE OUTCOMES
Ethos VO Ltd – who are we?
Senior team
• Major General Lamont Kirkland CBE – general officer commanding 4th Division
• Air Commodore Andy Fryer – former deputy commander of the NATO AWACS force
• Robert Pye – former Ernst & Young director and vice president Thales
• Tony Clarke – former Ernst & Young executive and business change specialist
• Gerald Callus – former programme director, Thales
• Captain Mike Davis-Marks OBE – former commanding officer of HMS Turbulent
• Andy Uren – brand and communications lead
• A network of over 100 senior execs / companies
ETHOSVALUABLE OUTCOMES
Concept: mediating networks and institutions
ETHOS
Inputs: networks, knowledge, collaborationsOutcomes: services, projects, ventures
ETHOSVALUABLE OUTCOMES
Ethos VO Ltd – strategy
Values
• Collaboration, trust and moderation.
Vision
• Develop and scale Ethos resources, reputation and processes to address a wider range, number and complexity of problems at a local and global scale.
• To provide a five year exit opportunity for members via a growth strategy
Strategic focus 2012
• To generate sustained short-term revenue through the pursuit of opportunities to problem-solve through collaborative projects using the capabilities already inherent in the Ethos network. Build strong track record in delivery and reputation
ETHOSVALUABLE OUTCOMES
Ethos VO Ltd – strategy
Strategy: three hubs equals a cluster
• Aldershot (military node)
• Military sports sponsorship – Team Army
• Scaling to RN, RAF and combined sports
• Future prospects: Australia and USA
• Exploit retail opportunities (click-through)
• Local government (IT node)
• Ethos Drupal-based CMS in delivery to Caerphilly and Nottingham
• Further pipeline: Cambridgeshire, N Wales, Strathclyde
• London (mega-city network node)
• Cyber
• Post-crisis infrastructure management
• Brand development
Growth = launch one new cluster per year
ETHOSVALUABLE OUTCOMES
Aldershot: impressive results since January 2011
Sponsors
• 22 of which 14 are new
• More in negotiation
Funds raised
• Over £1m of sponsorship funds pledged / received
• £170k existing sponsorship transferred in
• Over £800k is new money
• Additional £40k raised for Royal British Legion at dedicated fundraising events
Expanding the scheme*
• Combined sports
• RAF
• Royal Navy
* Concept brands only at this stage
ETHOSVALUABLE OUTCOMES
Current Team Army sponsors
ETHOSVALUABLE OUTCOMES
Business plan: exit strategy
Equity (100m shares) allocated incrementally
• 60% to Ethos members according to contribution to Ethos strategy
• 10% allocated per annum according to value-added
• No dividends based on equity (cash earned as salary / subcontracts)
• Founder retains golden share
• 40% to investors
• 20% tranche in 2012
• 20% tranche in 2014
• No dividend policy before 2015
Liquidation of investment
• 2016 float or trade sale
ETHOSVALUABLE OUTCOMES
Business plan: member / costs / offer strategy
• Everyone a member with more or less equal opportunity
• Legally, a requirement for directors of limited liability companies as needed
• Operationally, requirement for governing councils (e.g. a cluster / hub)
• Equity discussed previously
• FTE member growth from 10 (today) to over 1,000 on exit.
• Member salary / income
• Low base salary
• Remainder is profit / income / results based
Other costs
• Vast majority of costs are people based
• Virtual / distributed for foreseeable future
• Low / no fixed assets – everything ‘cloud’ based
All offers based on services
• 10-20% net margin achievable
• Recurring revenue where possible (e.g. Team Army forever)
• Pricing on outputs not inputs where possible (e.g. Caerphilly)
ETHOSVALUABLE OUTCOMES
Business plan: cash balances at 29/11/2011
Ethos VO Ltd
• £67,271.87
Ethos Fundraising Ltd
• £200,698.11
Team Army Sports Foundation
• £10,000.00*
Statements at end of presentation
*managed on behalf of the charity
ETHOSVALUABLE OUTCOMES
Business plan: P&L
All figures £ 000 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 102011 2012 2013 2014 2015 2015 2016 2017 2018 2019
Cluster 1 955 3,150 6,050 10,000 16,500 30,300 30,800 30,800 30,800 30,800
Aus/ USA/USA/Canada/ NZ Sponsorship
Rest of the world sponsorship
Platform / Memberships 200 500 1,000 2,000 4,000 8,000 8,000 8,000 8,000
Cluster 2 955 3,150 6,050 10,000 16,500 30,300 30,300 30,300 30,300
Cluster 3 - 7 - - 955 4,105 10,155 20,155 36,655 66,000 93,150 117,400
Total revenue 955 4,305 10,655 21,155 38,655 70,955 105,755 135,100 162,250 186,500
Growth % 451% 248% 199% 183% 184% 149% 128% 120% 115%
Operating Costs 100 2,153 5,328 10,578 19,328 35,478 52,878 67,550 81,125 93,250
Fixed Assets 215 533 1,058 1,933 3,548 5,288 6,755 8,113 9,325
Cluster 1 800 2,520 4,840 8,000 13,200 24,240 24,640 24,640 24,640 24,640
Central / Memberships / Marketing 500 1,000 5,000 6,000 3,000 4,000 5,000 5,000 5,000
Cluster 2 48 158 303 500 825 1,515 1,515 1,515 1,515
Cluster 3 - 7 - - 48 205 508 1,008 1,833 3,300 4,658 5,870
Total Costs 900 5,436 11,906 25,143 41,468 68,098 90,153 108,760 125,050 139,600
Profit & ValuationProfit Before Tax 55 -1,131 -1,251 -3,988 -2,813 2,857 15,602 26,340 37,200 46,900
Profit Margin (pre-tax) 5.8% -26.3% -11.7% -18.9% -7.3% 4.0% 14.8% 19.5% 22.9% 25.1%
Ethos Valuation 20,000 40,000 60,000 80,000 100,000 100,000 100,000 100,000 100,000
Full Time Equivalent personnel at year end 10 43 107 212 387 710 1,058 1,351 1,623 1,865 Clusters at year end 0 1 2 4 7 11 14 16 19 FTE / Cluster n/a 100 100 100 100 100 100 100 100
Members 100 2,000 5,000 10,000 20,000 40,000 80,000 80,000 80,000 80,000
Members Allocation 10% 10% 10% 10% 10% 10%
Equity Finance 20% 20%
Cumulative 10% 40% 50% 80% 90% 100%
Value of Equity Sale - 4,000 - 12,000 - -
Value of member allocation / FTE -£ 46.458£ 37.541£ 28.362£ 20.696£ 14.093£
Dividends - - - - - 1,143 6,241 10,536 14,880 18,760
Shareholders Reserves 55 2,925 1,674 9,686 6,873 8,587 17,948 33,752 56,072 84,212
Costs
Revenue
Equity Allocation
ETHOSVALUABLE OUTCOMES
Questions?
ETHOSVALUABLE OUTCOMES
Questions?
ETHOSVALUABLE OUTCOMES
ETHOSVALUABLE OUTCOMES
ethosvo.org
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