Dollinger index

The Business Plan 197

reducing cash flow through high overhead. The current thinking is that an attractive stock option
program can tighten salary outlays.
Babyyourway.com will initially allocate a modest amount of funds (TBD annually) to subsi-
dize healthcare costs for the four management partners. As the company grows and new employ-
ees are hired, the total benefit package will be revisited to attract and keep top caliber talent with-
out significantly reducing cash flow through high overhead. This will likely look like subsidized
health care and a set of “creative” perks aimed at retention, possibly including both culture-driv-
en perks and nontraditional incentive programs. Typical benefits such as vacation time and 401K
(or employee ownership) will be introduced as the scale and success of Babyyourway.com allows.
The details of these HR programs are TBD based on the needs of Babyyourway.com at the time
of implementation.
Babyyourway.com will be an Equal Opportunity Employer.

Ownership

Form of Business. Babyyourway.com is a limited liability company. Each partner is liable only
for the amount of his/her personal investment. No other legal liability exists. The actual partner-
ship agreement contains no special conditions or clauses.

Equity Positions. The following table illustrates the owners’ equity positions.

Each partner is contributing an equal share of personal funds to the company’s start-up require-
ments, so each partner retains an equal share in the business. This personal investment is a strong
signal of the level of each partner’s personal commitment.

Deal Structure. Babyyourway.com will require $300,000 to start up and to grow at the rapid
rate necessary to achieve its potential. These funds will initially be needed for the purchase of pro-
duction equipment (See Production and Development section) and to fund advertising and
inventory outlays. The deal structure will ultimately be negotiated with the investor. The
Babyyourway.com management team will consider a number of financing structures from poten-
tial investors, including those that require an equity stake in venture.

Critical Risks and Contingencies

As with any start-up business, risks must be considered. The following list specifies some key
risks associated with investing in babyyourway.com.

• Failure to meet production deadlines or sales forecasts: For any startup, the coordination of
  raw material inventory purchases, capital equipment acquisition, production startup, and
  logistics all present challenges, particularly in the area of cash flow. Late deliveries by suppli-
  ers or problems with capital equipment can dramatically affect the initial supply chain.


• Failure to produce the products promised: While the DuPont Artistri has been on the mar-

Partner Investment

Neal Cawi

Brian Erdman

David Rucker

Matthew Sifferlen

Total Owner’s Equity

$100,000

100,000

100,000

100,000

$400,000