startup business plan format

Company Logo

Company Logo September 2013

The Promise Of Framastats Delivered

Framastat Systems Inc.!

Startup Capital Ventures!

Team in a graphic format

2

OKC Innovation Center

Roger Rabbit

General Partner

BSEE UC Irvine MBA Stanford

Betty Boop

Venture Partner

BA Principia College, MBA

NYU-Stern

Fred Flintstone

VP Sales

BA & MBA Northwestern

Kellogg

SFU

WOODSIDE FUND

Homer Simpson

CTO

BA Holy Cross, MBA Wharton

ICCP Ventures

CFO CEO

CAS


Agenda

Solution Market Technology & IP Roadmap Financials & Financing

Confidential: Do Not Distribute Without Written Permission from Company


50,000 Foot View •  Mantra: The Promise Of Framastat Delivered •  Pain: Location Systems are expensive &

perform poorly •  Painkiller: low power, low cost, long range,

high accuracy solution •  Initial Market: $XB inventory, shrinkage &

asset tracking markets •  Technology: Magic Pixie Dust (MPD)… •  Key IP: MPD is patented! •  Team: Rock star pixies •  Invested: $X.X from Intel, SCV •  Seeking: $6M


Status Market Development: $11M in signed trials with $180M rollout value ◦  Giant Retailer ◦  Boeing ◦  Monsanto

Product ◦  Complete demonstrable system incorporating all elements: active &

passive tags, reader / digital antennas, master readers, real-time software

Capabilities: ◦  Extremely low power RF-CMOS based Location System & Framastat ◦  Software

Six employees Founded 2006



Pain: Location System Too Slow, Costly & Not Accurate Enough To Solve Real-‐World Problems •  Retail shrinkage management requires low cost,

high accuracy & real time not possible today •  Inventory management requires low cost & high

accuracy not possible today •  Asset tracking requires real time & high accuracy

not possible today •  Other Application



Painkiller: Company Makes Location System Practical & Affordable •  100X greater accuracy than other locational

systems (2 cm / 1 inch)* •  Real time system •  100X lower tag cost (we will not price 100X

lower!) •  3X greater range (up to 30m / 100 feet) •  10X lower tag power consumption ◦  5X greater battery life in active systems

•  10X lower system cost


Startup Capital Ventures!Confidential: Do Not Distribute Without Written Permission from Company

Company Is 100x More Accurate Than Other Location Systems

US!

Them 1

Them 2

Them 3


Lowest cost of ownership at the highest performance


Company Has Lowest Deployment & Ownership Cost

Recurring Cost (Tag Cost) $1 $50 $100

Deployment Cost

1x

10x

100x

Them 2

Them 3

Them 1

US!


Company Vs. Competitors Features & Costs

Company Competitor 1 Competitor 2 Tag $ $ Tag battery life yrs. yrs. Packaged tag cost $ $ Tag cost / year $ $ Reader / D.A. $ $ Master Reader $ $ Software $ $ 1,000 tag system cost $ $ Locational accuracy Range Real Time



Agenda



Startup Capital Ventures!12

Chips PA Systems

Sources: iSuppli 06, IDC March 12

2012 TAM $450B

Nacho Makers Restaurants

$4-6B RF Subsystems $450M $36B

Rep

rese

ntat

ive

Vend

ors

Our Industry Ecosystem Our Customers.

Salsa

COMPANY


Our Market Is Growing Fast

Source: Frost and Sullivan (2012)

•  Exponential growth rate based on current (2G) products •  Introduction of Company’s low cost / high performance

products will expand the market for Location System.


Market Forecast by Product


•  With Company’s introduction of low cost tags and readers, we expect the Hardware segment to shrink while the Tags segment grows due to more deployments


Large Application Markets Will Be Energized By Lower Cost Solution •  Asset tracking: $ •  Inventory management: $ •  Shrinkage management: $ •  Other 1: $ •  Other 2: $


Sources:


Competition Is Fragmented (AeroScout Values Industry at $3.6B)


•  No dominant player / technology in the market •  AeroScout was acquired in 2012 by Stanley Black & Decker for more than $200 million •  Most players are focused on a specific vertical •  Company’s products apply to all segments/verticals •  Company’s dramatically lower cost + higher performance solution could produce a dominant cross-

segment player


Current Customer Status – NOTE LOIs where present

Retail: Betacustomer Systems ◦  Five year LOI: $30 million (in US alone) by year 3 with growth planned to

nearly 500M tags / year in five years ◦  Theft prevention, merchandizing, compliance ◦  Initial rollout in 2013 ◦  Addressable market > $10 B

U.S. Government: Osterhout Design Group ◦  3 years revenue : $20 million with exponential growth for both active and

passive tags ◦  Osterhout Design Group ◦  Warehouse inventory management and goods tracking ◦  Addressable market > $1 B

Manufacturing: Boeing & Monsanto ◦  3 year revenue: $5 million with exponential growth for both active and

passive tags ◦  Tools and parts tracking ◦  Addressable market > $1 B



Agenda




System Overview


Framastat Components

Tags (passive or active)


Advantages of Company’s Solution


Long Range & Low Power

Multipath Fading Immunity

•  Robust tag detection and location determination •  Signal propagates to reader through openings and cracks

Precise Location of Many Tags

•  Achieve resolutions of 2-3 inches •  1000s of reads per second per reader

Low Cost & Small Form Factor

Low Power & Long Life

•  Readers are 100 times less costly and 20 times smaller than Gen2 •  Lowest cost of ownership

•  Increased read distance (50-100 meters) •  Power : any source, any frequency

•  Tag chip consumes average of 2µW (including memory) •  Enables alternative power options: micro solar cell, MEMS harvesters, etc.


Digital Antenna

Operation Of Framastat System

Beacon Passive UWB Tag Narrowband Transmitter

UHF UHF

NB Receiver + Power Harvester

UWB Impulse Transmitter

UWB

UWB Receiver Single Chip/ Very Low Cost

UWB

Memory + Logic

Narrowband signal powers tag, initiates query session

Receiver harvests RF power and wakes up

Tag transmits UWB impulses


6dBm: 50-100m range

1 2

3

4W EIRP: 10m range


Current State Of Development


Passive Tag: §  Chip:180 nm CMOS, 1x1 mm §  Tag substrate: 4 cm x 8 cm §  Sensitivity: -15 dBm (915 MHz) @2uA load §  Impulse strength: 6dBm

Active Tag: §  Chip:180 nm CMOS, 0.5x0.5 mm §  Tag substrate: 2.5 cm x 2.5 cm §  Range: more than 100 meters §  Current: <1uA (cell life X yrs.)

Digital Antenna (DA) Reader Chip: §  180 nm CMOS, 2.5x2.5 mm §  Sensitivity: ~ 60 dBm

Reader Antenna: §  Wide angle circularly polarized 2”x2” §  High gain circularly polarized 2”x4” §  High gain linearly polarized 4”x4”

Software: §  Software for identification and location

Narrowband Antenna

UWB Antenna


Strong Patent Protection •  Issued: Asymmetric Dual Mode Communications ◦  US Patent # 7,180,421; filings include PCT as well as individual countries Japan,

China, and European Union ◦  Radio frequency tag and reader with asymmetric communication bandwidth ◦  Integration of ultra wideband and narrowband (continuous wave)

•  Allowed: Low Power Modulation and Massive Medium Access Control ◦  US Patent Application # 20090051496 is being granted; PCT is filed

•  Allowed: Inductive Antenna Coupling ◦  US Patent Application # 20090264067

•  + 6 other pending/provisional patents filed



Agenda




Achievements So Far… Today

• Incorporated in Cayman Islands and Delaware

• Closed $1M FFF Convertible Notes

• Sunnyvale office

• Beijing subsidiary

1st

predistortion architecture

patent issued •

1st full time engineering employees •

Filed 12th patent application • • Engaged at&t, Alcatel-Lucent, ADC, Cisco/Navini, etc.

• Engaged Chinese prospective customers & partners Linkwave, Huawei, ZTE, & Mobi Antenna

• Acquired SeRon Technologies Hired VP of Engineering • Townsend and Townsend issued IP “freedom to operate” •

3G & 4G Alpha Prototypes Demos •

“A” rev completed •

“B” rev completed •

Product platform completed 3G η=30% BW=100 MHZ • Technology & IP

Business Development

Startup Capital Ventures!26 26

Today

3G η=40% BW=100 MHz 4G η=23% BW=100 MHZ •

• Q4: Series A Closing

• Q4: Pre-Production Units for Lab Trials

Interference Cancellation System Repeater 3G PA η=45%

4G η=28% BW=Ultrahigh •

• Q2: TD-LTE

Where We’re Going…

• Q3: 1st Qualifications, China Production Starts Linear Repeaters & RRH/DAS Beta Testing

• Q2: 1st Certification & Production Release

Reconfigurable PA

3G η=42% 4G η=25% BW=200 MHz •

• Q1: First Customer Samples for Field Trials Full Characterization, Quals Begin Sales & Marketing Team In Place

2nd Generation RRH/DAS • Technology & IP

Business Development


Agenda




2008 2009 2010 2011 2012 2013Revenues ($K) 140 1,655 26,625 95,326 157,440 252,805Gross Margin ($K) 68 515 14,480 55,343 94,959 152,348Gross Margin (%) 49% 31% 54% 58% 60% 60%Expenses ($K) 5,101 7,809 12,863 20,677 29,424 41,555Net Income BT ($K) (5,116) (7,318) 1,612 34,666 65,535 110,792Investment ($K) 10,000 12,000 - - - - Headcount 43 70 92 116 160 223

3G PA 105 745 9,825 37,940 41,500 26,1254G PA 35 350 9,200 28,136 48,440 52,680Repeater / RRH / DAS - 560 7,600 29,250 67,500 174,000Total ($K) 140 1,655 26,625 95,326 157,440 252,805

3G PA 30 210 2,950 12,650 15,700 11,3504G PA 10 100 2,810 8,960 16,800 20,400Repeater / RRH / DAS - 28 380 1,800 4,860 14,550Total 40 338 6,140 23,410 37,360 46,300

Financial Summary: Breakeven In 2010 With $12M Financing

Revenue by Product

Units by Product

FCS Field Trial

First Order

Volume Ramp


•  Funding need: $6M in two $3M tranches ◦ First tranche has greater liquidity preference

•  Deliverable milestones ◦  $2.5MM revenue in 2014

◦  Profitable in 2015


2013 Q2 Q4

Tag & Reader Commercial

V1

Production Tag, DA & Master

Reader

Product Support Tag, DA,

Master Reader & Provisioning

Tranche 2: $3MM Tranche 1: $3.0MM

Beta Tag, DA, & Master Reader

For Betacustomer

2014 Q4

Milestones & Budget


Financing Plan • Angel Round: $2.4M in convertible notes (2011) ◦  Developed 3G & 4G Pre-production units ◦  Initial customer validations ◦  Acquired Alternatives Technologies Inc. ◦  Secured broad IP portfolio

• Seeking $6M Series A ◦  Two $3M tranches – first tranche with 1.5x LPF ◦  Initial revenues ◦  Build team ◦  Execute on three field trials ◦  Develop production tags & readers

• $12M Series B in Q3 2014 ◦  Profitability ◦  Volume production ◦  Cash flow positive

Startup Capital Ventures!31 31

Use of Proceeds

• Complete paid trials & scale-up for subsequent roll-outs

•  Engineer small form-factor “brick” & efficiency enhancements

•  Develop remote PA control software

•  Deliver 3G & 4G PAs FCS by Q1 2009

•  Establish Asia, North America & European sales & marketing organizations & channel partners.

Startup Capital Ventures!as of September 2, 2008

Company Symbol Market Segment Market Cap

2007 Revenue

Last 12 mos Rev

Last 12 mos P/R

Last 12 mos P/E

Powerwave Technologies PWAV Wireless Systems 652M 780M 903M 0.7x N/A

Clearwire Corporation CLWR WiMax Systems 1.6B 151M 197M 8.1x N/A

Alvarion ALVR WiMax Systems 435M 237M 264M 1.6x 38.8x

Airvana AIRV Mobile Broadband 328M 306M 216M 1.5x 4.2x

Acquisitions Market Segment Acquirer Acquirer Market Price Date

Allen Telecom RF Systems Andrew RF Systems $500M 7/2003

Flarion Technologies Flash-OFDM Qualcomm CDMA $805M 8/2005

Navini Networks Mobile WiMAX Cisco IP Systems $330M 10/2007

Andrew Corporation RF Systems CommScope Cable, DSL, FTTN $2.65B 12/2007

Exit Comparables


Contact Information


Backup Slides Or Appendix

startup business plan format

Business

high accuracy

exponential growth

180 nm cmos

written permission

financing confidential

market

confidential

source