Gravel Business Plan

8/13/2019 Gravel Business Plan

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Table of Contents

Executive Summary3Company Description....3

Product Description..4

Market Research & Analysis.8

Competition...8

Market Data.......9

Financials...12

Revenue Model....12Financial Projections...13

Marketing Plan..15

Operations Plan & Schedule...20

Management Team..21

Additional Hires22

Advisory Board.23

Critical Risks & Assumptions..24Assumptions.24

Risks..25

Proposed Company Offering..27

Series A Funding.27

Future Funding 27

Value-Added Investor.27

Exit Strategy..27Appendix28

Additional Mockups26

Pro-forma Balance Sheet 32


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Executive Summary

The Gravel team plans to disrupt the travel industry through means of inspiration and planning.

Harnessing the power of social combined with a seamless user experience, Gravels premiereproduct, a workflow collaboration tool for travel planning will help users imagine, plan and

experience their perfect trips. Gravel aims to reduce time and searching costs while

maximizing the ease of use of our dynamic travel inspiration and planning platform. In doing so,

Gravel will connect its users to the most relevant locations and activities by acting as a

optimized search engine for travel and offering targeting advertising and lead generation

options to all points along the supply chain.

Gravel wants to bring social media and content creation to the travel planning process. After

talking to consumers and suppliers alike, Gravel saw the need for software to aid travellers in

every leg of their trips, from inspiration to planning through execution. This will begin with a

product targeting the consumer sector, however Gravel will continually look to expand our

target audience and product line to new markets such as corporate travel.

Gravels software allows trip planning to be optimized for greater overall efficiency,amalgamating all the important facets of developing a trip into a contemporary and intuitive

online and mobile platform. Users within the market are embracing this use of mobile devices

and on-the-go apps within their travel process. With 40% of consumers who use online

searches in their decision-making path also using social media to complete their decision, this

market trend towards adopting both social and mobile technologies presents a favorable

environment for Gravel.1

Gravel's online platform is designed to streamline the difficulties of communicating, organizing

and measuring the logistics of the travel planning process. With an intense focus on an

enhanced user experience Gravel plans to deliver a robust and personalized utility filling a


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Gravel stands out from among its competition by focusing on the users experience and

interaction with the platform before, during, and after their trip. The innovation lies in the

approach taken to tackle the logistics of a trip. Rather than the typical step-by-step method offinding the ideal price point and timing for each aspect of a trip, Gravel wants to inspire the

user - first by suggesting based on user conditionals, and later by providing recommendations

based on the user data compiled by the system. Similar to the way Pinterest and other

compilation-based sites have encouraged users to share and interact with others interests,

Gravel also encourages the user to inspire other Gravel members to share their experiences.

By presenting their own trip experienced through the platform, a social community in which

users can share and compile all aspects of their perfect trip can be built.

Comprised of a team of tech-savvy entrepreneurs and designers all too acquainted with the

hassle of the travel process, Gravel has the experience and user-centered mentality necessary

to revolutionize the travel experience. Additionally, with guidance from others thoroughly

experienced in the travel industry, Gravel is confident in its ability to deliver on its promise to

be the one-stop shop for all organized travel needs.

Product Description

Gravel is the social single stop travel management platform tailored for organized groups and

individuals. It offers an enhanced travel experience allowing users to browse, share, and plan

every step of a trip on a single platform. The product provides tools to organize the three

stages of the travel process: social, planning, and logistics. With both mobile and web apps,

users will be able to use our tools to plan the trip, stay organized during the trip, and share

their experience after the trip.


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Exhibit 1: Example Inspiration Page

Social:Oftentimes the most difficult part of planning a trip is sifting through the pool of travel

ti d ti U b th h G l ll ti f t i th t th


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Exhibit 2: Hotel Finding Feature for Planning

Planning:Gravel handles hotel and flight search, scheduling, and discussions between group

b U i t th i f f ti i l ti t d


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certain individuals to join them on certain activities or make events open for the entire

group.

Communicating: Instead of having lengthy email and chat threads that lack context and

coherence, users will be able to communicate with each other directly on the site through

the chat function or through posting discussions to the message board as they

collaboratively make decisions.


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Budgets: The platform will keep track of a user and groups spending and alert users when

they are nearing their limits. The budgeting feature will ensure that users are spending

within their limits and will have enough to pay for events that they want to attend.

Transit: The mobile app will keep track of where each user needs to be at any given time

during the trip. By implementing the Google Maps API, directions will be provided to and

from locations on the itinerary. Gravel will also provide links to access taxis and other

transit services when available.

Information and Communication: The Gravel app will be the best way to stay connectedwhile on the trip. Users will be able to use its messaging service to communicate with other

users and the app will provide information about weather and other relevant news and

information about their destination.

Market Research and Analysis

Competition

Indirect:Groople, Travefy, Paybygroup, Travelstormer and HipmunkDirect: Travel Agents

There are a number of online travel platforms for both individuals and groups; the above are a

few sites with small notoriety. We view these companies and platforms as indirect competition.

There is an empty white space between collaborative software and travel-centric websites, and

we hope to become the first mainstream platform to hone in on this specific segment. While

there is a lack of online and mobile competition, our direct competitors would be travel agentsand other group travel planners. Recently, a potential future competitor made headlines by

acquiring funds from celebrities and well-connected individuals (ex. Bono). Vamo promotes

itself as simplified travel planning and has received early media attention and publicity 2 We


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agent and felt they were trying to use incentives to wrongly sway the group one way or another.

He also felt things such as flight booking for multiple destinations was virtually impossible.

Gravels service will surpass the capabilities of an agent and provide the customer with arobust user experience through social collaboration, progress tracking, and relevant individual

and group metrics.

Many of our competitors do not consider the first-mile, last-mile stage of travel or have not

attempted to become the single solution for the group planning process. Breaking down each

stage of the planning and execution of the trip into a fluid experience provides the user with

increased efficiency. Our personalized approach to each user develops and saves preferences,molding Gravel to be appropriate with regards to the groups plans, and also to provide the

user with recommendations that suit their individual interests.

Travel agents and popular online booking platforms have pre-existing business relationships

and connections with the most popular airlines, hotel chains, and travel locations, and this

allows them to organize and offer potentially cheaper deals that we, as a new business, are not

capable of offering. However, our technology platform allows the user to source through thesedeals on external sites all within the user interface. Since we choose to do booking elsewhere,

we reduce cost and risk in terms of inventory. Gravel intends to combine the benefits of

todays online travel booking services with the user experience and social integration of

tomorrow to optimize the overall interaction.

We are addressing not only a need of increased efficiency within planning but developing an

enjoyable process in an otherwise unpleasant experience. Given the expertise of ExecutiveBoard members John Bai and Sam Jau, the aesthetics of our website and mobile app will be a

seamless and intuitive user experience. Additionally, integrating user and group analysis

through easily comprehendible metrics provides our users with a powerful informative platform


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forum that currently has 116,792 subscribers who simply share links with pictures and

descriptions of their experiences.5Developing an online commonplace, where not only photo

albums can be uploaded but an entire trip can be portrayed in a timeline, creates a new andexciting way to share and visualize your travels.

In terms of the current efficiency of travel planning, we noticed a considerable pain point from

the very beginning of the process. The average traveler visits approximately 22 travel related

sites over the course of 9.5 research sessions before deciding to book their destination.6That

is an undeniable inefficiency within the online travel landscape and a market need that has not

been currently addressed. Offering the travel industry a tool that eliminates the cumbersomenature of the initial step of trip planning alone answers a basic consumer desire.

Viewing the online travel industry as a whole, we see that this is also rebounding from the

economic tremors of 2008 and 2009. Total online travel spending was expected to exceed

$120 billion in 2012 within just the United States, up 11% from the previous year. 7U.S. Travel

Association, consumers spent $564 billion in 2011 for domestic and international leisure travel

and $249 billion or business travel. For domestic travel within the U.S., the margin is evengreater with 77% of the 2011 total conducted for leisure purposes.8 This exhibits the spending

power and market scale of our target audiences.

Target Market

Assessing the global youth market, we saw favorable data statistics that point towards a

blooming sector within the travel industry. Defining youth as travelers under the age of 25,

they make up 160 million international tourist arrivals per year. The global youth travel marketwas estimated to be a $136 billion in worth, while also spending more than any other tourist

group at $2,600 per trip and expected to grow by 8% yearly. Not only are youth travelers a

developing and promising segment within travel market they are also the most keen towards


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We have considered other similar markets such as corporate business travel in terms of

expansion. It is a thriving segment within the industry with $107.7 billion spent on groupbusiness travel, and positive increases in spending over the past several years.11

Social Media

Social media is an up and coming trend in the travel industry. Travel companies are

increasingly turning to social media efforts to increase revenue generation and online visibility.

With 22% of travel companies currently optimizing their business through social media and an

additional 27% planning to implement social aspect in the next five years, this exhibits animpending shift towards a greater acceptance of social media and its capabilities.12

Advertising Space

An appealing aspect of the online travel industry is the revenue acquired due to advertisements.

$2.56 billion in 2011 was spent on advertisements in the U.S. online leisure travel space alone

and a promising estimate of this growing exponentially over the years, with a growth to $3.16

billion in 2012. Furthermore eMarketer believes that by 2016 the digital advertising spending inthe U.S. will reach $5.58 billion, a compound annual growth rate of 16.8%.1314

Collaborative Services

Turning towards the collaborative services market, we see a strong environment growing in

popularity. Worldwide collaboration services totaled $42 billion in 2012, and estimated to

reach $68 billion by 2018.15The adoption of social collaborative platforms also indicates a

developing interest in the professional world, with 75% of enterprise-level organizationsconsidering implementing these services. Capitalizing on this shifting opinion of collaborative

services shows that tools such as Gravel are not only gaining popularity with individuals, but

formal institutions which are generally more hesitant and conservative in adopting new


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Financials

Revenue ModelGravel earns revenue from three main sources: advertising, lead generation, and eventually

subscription revenue from a freemium model.

The advertising revenue is based off varying levels of interaction: impressions, clicks, and

acquisitions, a proven model used by large search engines and social media sites such as

Google, Facebook, and Twitter. Each type of ad is sold at a different rate and requires the

different interactions from users before generating revenue. The cost per impression ads (CPM)generates $5 per thousand views in the first year, and this rate can grow over time as we begin

to know more about our user. Cost per click ads (CPC) generate $0.04 per click assuming a

2% click-through rate17initially with growth over time to more competitive rates. Cost per

acquisition ads (CPA) generate $10 for each customer the advertiser acquires through an ad

assuming a 2% click-through rate and an average industry 4% conversion rate18once on the

advertisers site.

To calculate the total revenue generated from each type of ad, we first split the users into two

different buckets: browsing users, and users who are planning a trip. This allows us to estimate

how many ads and which type of ads a user will see in a given session. The average browsing

user will be exposed to CPM and CPC ads in their inspiration feeds with a total of 5,760 views

per user every year. Users planning a trip will be exposed to CPC and CPA ads while searching

for events to add to their itinerary and CPA ads while searching for flights and hotels. This is

broken down in the table below, considering a booking user will book an average 1 trip peryear. We found that people typically undergo over 9 research sessions before booking19, as

mentioned earlier.


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These CPA ads also include lead generation ads that result in commission revenues. Revenue

from lead generation is commission based. This will require the company to establish

relationships with suppliers in order to decide on the exact amount of commission based ontheir service. This is common to the travel industry, and commission can be earned on hotel

bookings, travel insurance, other auxiliary activities, and ground transportation at rates of

typically 5% - 10% as we gain users.20For travel insurance, about 10% of users opt in to travel

insurance, 9% of the trip cost is applied toward insurance, and commissions are typically

45%.21This is a lucrative channel, so Gravel would ideally partner with a travel insurance

company early on in its trajectory.

Financial Projections

The revenue projections for Gravel were based off the number of users expected over years 1 -

5. In year 1, we are going to have an alpha and beta testing period consisting of 5,000 and

50,000 users, respectively. This quantity for the alpha was chosen based off the numbers of

users we felt our minimal viable product could handle from a testing perspective. For the beta

testing, we wanted to scale this number by an order of magnitude.

Beyond year 2, the user projections are built on the trajectory of similar productivity and

workflow tools such as Evernote22and social media content platforms such as

Pinterest23, and Fab.com24. We took a conservative approach, expecting only a fraction of the

users of these generally viral platforms. In year 3, we will introduce a freemium model, which

will provide a significant amount of revenue through subscription payments. Our initial thought

for the pricing model is based off of Evernotes current model, at $5/month or $45/yearly.

Typically the free-to-paid user ratio is 10:1

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reflected in the financial growth statements. Thefreemium model is an option typically employed by companies with high-value consumer

software such as Evernote or Dropbox.


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Exhibit 5: Revenues through Year 5

Given that Gravel is selling software as a service (SaaS), costs are relatively low. There are

some initial overhead costs in terms of the purchase of gravel.com from its existing owner,

hosting and server costs. However Gravel maintains zero inventory as we are working off of an

ad-based revenue model and are outsourcing our travel booking needs to suppliers on the web.With this lack of inventory and cost of goods sold, Gravel operates on very high margins similar

to other software companies. Capitalizing on this, Gravel will be able to quickly turn around


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members continued involvement in the company, said member will receive !of their equity

per year until the vesting year is met.

Exhibit 6: Net Income through Year5

Net income over years 1 through 5 can be seen above in Exhibit 5. Given our losses of roughly

$1.75 and $2.25 in years 1 and 2 respectively, it will be necessary to raise at least $4 million

dollars in our first round to establish the business, brand and product of Gravel.


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an overarching goal of creating a culture that we will instill through the Gravel experience. As

we look beyond year five we will start to target the businesses travel sector and develop a new

product for this purpose. Gravel will offer these larger business trip planners a one-stop shopto better organizer and manage their companies trips.

Students

With the global youth traveller market worth an estimated US $136 Billion27, and an

understanding that students are constantly seeking new and different products and services,

we will target students as early adopters of the product.28They will be our buzz, as 18-34 year

olds already spend around 4 hours a day refreshing, retweeting, or posting through their social

media outlets.29Gravel will seamlessly integrate these social platforms, enabling these

students to spread the word online.

As Gravel expands, we will target college campuses and use them as hubs. We will begin at

Brown, given our familiarity and ability to reach the entire student population. We will then

move to selected areas of the country where there are multiple campuses within close

proximity to each other. The Boston, Massachusetts area offers 58 higher education options 30

where we will implement and develop a campus rep program. As we roll out our first version of

Gravel, we will select on-campus student influencers, focusing on social chairs of fraternities,

captains of sports teams, media writers, and other organizational group leaders. Similar to the

way companies like Tinder havehired a roster of undergraduates to promote the app on

college campuses and have thrown parties and other promotional events to boost Tinders

awareness, Gravel will utilize the distinct nature of college culture.31During the school year

Gravel reps will give Gravel swag and be present during college activities, recruiting fairs,

and will work with groups such as students who are planning to travel abroad, fraternity parties,

retreats, etc. Gravel reps will be primarily useful during big college break periods. Our reps will


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day interacting with technology and social media.33Gravels campus reps will help control the

content that is being posted through Gravels social media channels. Similar to what Spotify

has already created with its student pictures section of its Facebook page, Gravel will featurevideos, editorials, and testimonials from past customers experiences through our social media

platforms.34

Along with social media campaigns, we will run ads and promotions on specific pages that

cater to young or tech-savvy audiences. Sites such as Hypebeast, Highsnobiety, and Fast

Company, which are focused on the aesthetically conscious, tech-savvy, and youthful

demographic, will be where Gravels banner or box ads can be placed. We will contact thewriters and media managers of these online blogs and magazines to run ads and posts that will

be launched around the peak seasons that students travel and or group trips are booked.

Looking at Fast Companys Media Kit, on average, a !page spread print ad costs around

$40,000 compared to a welcome ad on their website which costs $200, the online approach

will be at a much lower cost, and will target specifically and more efficiently.35

Frequent Travellers

Gravel has categorized a frequent traveller as one who travels more than 3 or 4 times a year.

This group is seen as customers who we understand will come back frequently based on their

travel history. They are also the ones who will spread the word about our product being. The

way we will be able to reach this target audience is through online advertisements, and to really

capture this consumer we will make sure that we are featured on popular blogs or covered by

respected travel bloggers. We will have our advertisements on sites that these groups will

frequently use to book all their travel logistics, including Kayak, Priceline and Avis. Other

advertisements will be placed on popular tech-savvy, travel guru sites or blogs, and travel

guides. These will include online publications like Fast Company, CNET and Tech Crunch,


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connection by allowing customers to see Stories from the AirBnB community40and what

other friends have liked in the past when booking through AirBnB 41, giving the site a distinct

personality. Similarly, Gravel intends to distinguish itself by providing user feedback orrecommendations about past trip experiences and allow users a firsthand experience of what

other trips customers have been on via informational TV segments or through the use

professional photographers, who will take pictures of past trip destinations or experiences.

People will come to Gravel as a resource to be able to see and share their experiences with

each other and become excited and inspired for their next trip.

The way that we will reach and remain interactive with all these different type consumers isthrough the use of email newsletters. These newsletters will be tailored to each type of user

and will be sent once a month, and also depending on the users preferences. The Gravel

Letters will inform the user of updates and information about different travel destinations,

deals, etc. These emails will also include advice on how to become more interactive with

Gravel, reminding the user that we are here to help ease the pain of organizing travel logistics.

Within this industry it has been noted that there is only about a 3% click through rate 42after the

email has been sent, but our goal is not to only have the user click the content within the emailbut to remind them about how good our product is and to reconnect with those with whom we

have not interacted with for some time.

Marketing To Companies For Ads

To be able to show other companies that advertising through Gravel will be highly beneficial for

their product, we will first offer high-prospect travel companies like Kayak, Priceline, Delta, free

advertising for a limited time. Through this period we will collect data about how their ads are

doing on our pages, where they are doing poorly, and then show how they can better target

consumers. In addition, around year 3 or 4 we will have significant user data about our


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Operations Plan and Schedule


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Management Team

Gravels founders are made of a team of four students from Brown University and two students

from the Rhode Island School of Design. The team brings together a combination of skillsetsdeveloped through coursework and work experience(s).

John Bai Chief Executive Officer

John is a senior studying industrial design at Rhode Island School of Design. He has applied

his product and web design skills in a wide range of industries working with various

departments in the process. At YinEr, a fashion company in China, John developed their online

advertisements working in tandem with both the photo editing and graphic design departments.As a product designer at Master Cutlery, John took products from its initial design through

work on the packaging and catalog advertisements. After completing his studies he will be

working with the Digital Media Group at Direct TV where he will be contributing to the user

interface and web design. Along with his studies at RISD, he also works as the manager at

RISDs Student Fitness Center where he carries a variety of responsibilities from employee

management, to funds and resource allocation, to on-campus promotion. As CEO, John brings

together both the design aspect of the service and the management and oversight for thecompany.

Sam Jau Chief Product Officer

Sam is a senior at Rhode Island School of Design majoring in graphic design. Sam has

developed his skills as a designer through work with a long line of start-up companies

including Amazing Green, Jiepang.com, Fundly, Explore Mobile App and Crunchbutton. Most

recently he has worked at Swipely, a mobile payments and analytics company, where he hasbeen designing their mobile platform. While interning at Facebook as a product designer, Sam

worked among project managers, engineers and other product designers to improve their

Messenger product As CPO Sam will not only spearhead the designs of the website and


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Oliver gained a wide range of experiences including the evaluation of consumer and

competitive landscapes, creation of an excel database, and recommendations on strategic

direction for the company. He further expanded his marketing expertise while undergoing anaccount executive internship at Lipman, an advertising agency in New York, where he worked

on an array of projects conducting consumer research, helping formulate a campaign strategy

and developing branding decks for a variety of luxury brands. While at Brown, he has also co-

founded a lifestyle music website, Get Lifted Tonight, where he has also acquired skills in

networking and event planning. As CMO, Oliver is ready to dive into the market.

Wills Curley- Chief Operating OfficerWills is a senior at Brown University studying Business Entrepreneurship and Organizations

(organizational track). As an intern at Capital Management Group, Wills developed his skills in

client relations dealing first hand with customers. Wills worked as an electrician at Integrations

Inc, a full service security systems company in Philadelphia, and was later rehired as an

administrative assistant in charge of the construction and maintenance of information and

financial spreadsheets, analyzing construction blueprints and customer service. As a student at

the National Outdoor Leadership School, Wills developed leadership, survival and outdoorsskills while backpacking and canoeing through the Australian outback. His range of studies

and experiences provide a range of skillsets necessary for managing operations at Gravel.

Hanna Wrenn Chief Human Resources Officer

Hanna is a senior double concentrator in and East Asian Studies and Business,

Entrepreneurship and Organization (organizational track) at Brown University. She has grown

up working with small business owners, working as a marketing and sales representative for a

local bakery where she interacted closely with new customers and evaluated demand of

different products. She also developed her own custom jewelry business and later a rare books

business Through extracurricular activities at Brown Hanna has held a variety of leadership


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Development Team

In the initial phase, we will hire a team of developers (3-5) which will be led by the CTO. This

team will be responsible for the front and back end development of our website (and, later, ourmobile application). We will also be hiring a legal consultant to ensure our idea will remain

protected and to aid us in contracts with potential partners and clients. Additionally we will

recruit a Design Intern and Marketing Intern to work directly under the board of directors.

Customer Service

As we launch we will develop a customer service team to answer questions and aid in planning

of trips. As we expand our product, we will also hire a number of sales representative toaggressively expand our market presence and freelance photographers to ensure top quality of

our website. We will also make use of campus representatives at numerous universities to help

launch our product and recruit prospective customers.

Special Teams

With the implementation of the Freemium Plan in years 3, we will be expanding our marketing

and sales team. This will focus on gaining paid users and converting free users to paying users.Additionally, with the aggregation of data from our user base, Gravel will hire an additional 3-5

team members to focus on visualizing and developing insights from this data.

Advisory Board

Gravel is working to build a strong advisory board to aid the founders in establishing Gravel as

a leader in the travel industry. The following board members have advised our project thus far

and have considerable experience and knowledge of the industry.

Joel Cutler43- Founding Partner/Managing Director at General Catalyst & Co-Founder at Kayak

Joel has a wide range of expertise and knowledge regarding the travel tech industry having


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Michael Hering - CEO/founder of Skyauction.com; Founder of Magical Holidays

Michael N. Hering is a serial entrepreneur and has nearly three decades of experience in the

travel and leisure industry. He is a founder of Skyauction.com and has served as President,Chief Executive Officer and director since the company's inception in February 1999. Until

March 2000, he was also Chairman, President and Chief Executive Officer of Magical Holidays,

Inc., one of the leading travel wholesalers in the United States.

Gail Schwarzenbek - President of Magical Holidays; Financial Consultant to Skyauction.com

Gail Schwarzenbek has worked for many years in the travel business. As President of Magical

Holidays, she has done a great deal of work in travel wholesale. Her accounting expertise hasled her to serve as a financial consultant to Skyauction.com since its inception in 1999.

Critical Risks, Problems, and Assumptions

Assumptions

This business plan is made up entirely of forward-looking projections. We make a series of

assumptions to project finances and growth plans into the future including funding and user

base. These assumptions are made from similar company trajectories and ballpark estimatesof target user market, page views, clicks and other vital factors. We believe these estimates

were made with sound logic and therefore reflect the potential of Gravel in its first five years of

existence.

An assumption, as well as a risk, is the natural seasonal aspect of travel and travel booking.

Therefore it is important to acknowledge high and low months of booking in order to frame our

sales and marketing plans. This will affect revenue from advertising and lead generation,however these effects are expected to average out over time, therefore seasonality is not

considered in the financials. Once a subscription model is introduced, this will be unaffected by

the seasons as users will pay a monthly or yearly fee


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market. From an advertising standpoint, we will provide clients with highly targeted users for

their advertising and work through a bidding model consistent with Google and other search

engines. This will make it easy for companies to understand and integrate with our system. Byproviding the differing options of impressions, clicks and acquisitions, suppliers can determine

what is best for their service at minimal risk. From a lead generation perspective, we are

bringing targeted customers directly to the purchase point for many of these suppliers. Our

collaborative tool lends itself to groups, which is another provides another incentive for

suppliers looking for this audience to build a relationship with our company. Additionally, our

advisory board and personal networks provide leverage and options for initializing a

conversation with many companies along the value chain.

2. If our competition follows our lead with user experience and collaboration software, it could

harm our future business.

The Gravel team has identified a major pain point in travel: the difficulties of planning and the

chaos of the logistics. If we prove that Gravel is a solution to this problem, other competition

might focus more closely on the planning sector and their user experience. However, as one ofthe first to the market with consumer travel planning software, we will have an advantage to set

certain standards and work closely with all points on the supply chain to build a

comprehensive tool that benefits every link. Furthermore, as our user base grows, Gravel will

accrue valuable data that allows us to personalize the travel experience for every individual.

This data collection will provide a barrier to entry for newcomers to the market, as we will

continue to improve our services from the results and insights of this data.

3.Our revenues may fall if we do not continue to add value in the form of new services or

features.


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be integrated into the development process to ensure bugs are caught prior to the release of a

new version of our application.

There are a number of tools on the market right now that assess the performance of

applications and aid in finding the bottlenecks in the source code, such as New Relic. These

are offered at our price point and can be integrated with our development plan from day 1.

5. Our growth plan includes the aggregation of travel data. It may take some time before we

gather enough travel data for it to be useful, and even when we aggregate enough data we are

still unsure of its value.

Big data is on the rise44, and given the specific conditionals and planning features of the Gravel

app, there is a large opportunity to collect information and learn about how people plan and go

about their trips. Through our platform, the Gravel team plans to aggregate data from its user

base from day 1. However large data sets are required in order to make statistically signigficant

claims about how people travel. This will take up storage space and require higher demands

from our servers. Even after collecting enough data, we are unsure of the value of these claimsto the business.

Given the realm of possibilities that big data has opened to many companies in various

industries, the Gravel team believes this is a worthwhile risk that, like an investment, could yield

remarkable returns. In order to ensure that the data is dealt with in a manner that respects the

privacy of our users, we will work closely with a legal consultant. Additionally, Gravel plans to

hire additional team members whose sole position includes processing and handling the large

data sets into a visualization from which the other team members can work from which to draw

conclusions to help the business.


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These candidates will be chosen based on their experience with subscription and freemium

platforms in the past.

Proposed Company Offering

Series A Funding

In our first round of funding, we are looking to raise $4 million in capital through venture firms

or a number of angel investors. This will allow Gravel to hire the appropriate talent to get the

web platform of Gravel up and running within the first year. The money will balance out the

losses expected to incur from salaries, initial development and marketing expenses. This first

round will be the only needed capital in years 1 through 5 as our retained earnings issubstantial beyond year 3.

We are ambitious about seeing Gravel to reality and want to work with our investors to develop

milestones that will need to be met for Gravel to obtain the capital promised. These milestones

could include the completion of a minimum viable product, a number of relationships with

travel suppliers and services, and meeting vital user projections through our marketing

strategies.

Future Funding

Beyond year 5, given certain milestones are met, Gravel has plans to expand to new markets,

namely the corporate travel sector. The workflow required for this process differs from the

consumer product and would require additional development as well as diverging research and

marketing strategies. Therefore, future rounds may be necessary to aid in the growth and

scaling of Gravel.

Value-Added Investor

We are looking for an investor that is knowledgeable about selling SaaS and has experience


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technology, we will be able to develop contracts to license our product to large travel

companies. Another option is to launch an IPO, which will allow Gravel to continue to build its

brand. Ultimately, Gravel will be able to reach more users and develop to a point where Gravelis the best possible option for organizing all travel logistics.

Appendix

Additional Mockups

Exhibit 7: Hotel Choosing Mockup


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Exhibit 8: Payment Tool Mockup


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Exhibit 9: Logistics Mapping Tool Mockup


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Exhibit 10: Mobile Platform Mockup


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Exhibit 11: Pro-forma Balance Sheet$ in thousands Q1 Q2 Q3 Q4 Year 1 Year 2 Year 3 Year 4 Year 5

Assets

Current Assets

Cash 3,675 3,312 2,825 2,207 2,207 (370) 10,253 42,186 100,210Accounts Receivables 0 0 3 33 33 328 3,292 8,686 14,814

Inventory 0 0 0 0 0 0 0 0 0

Total Current Assets 3,675 3,312 2,828 2,240 2,240 (42) 13,545 50,872 115,025

Long Term Investments

Property, Plant, Equipment 100 100 100 100 100 200 300 300 300

Intangible Assets 0 0 0 0 0 0 0 0 0

Depreciation & Amortization 0 0 0 0 0 (33) (100) (200) (267)

Total Assets 3,775 3,412 2,928 2,340 2,340 124 13,745 50,972 115,058

Liabilities

Current Liabilities

Accounts Payable 25 17 33 50 125 79 150 283 546

Short Term Debt 0 0 0 0 0 0 0 0 0

Total Current Liabilities 25 17 33 50 125 79 150 283 546

Long Term Debt 0 0 0 0 0 0 0 0 0

Total Liabilities 25 17 33 50 125 79 150 283 546

Equity

Common Stock 30 30 30 30 30 30 30 30 30

Contributed Capital 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000

Retained Earnings (280) (635) (1,135) (1,740) (1,740) (3,985) 9,565 46,659 110,482

Total Equity 3,750 3,395 2,895 2,290 2,290 45 13,595 50,689 114,512

Total Equity & Liabilities 3,775 3,412 2,928 2,340 2,340 124 13,745 50,972 115,058


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Exhibit 13: Pro-Forma Income Statement

$ in thousands Q1 Q2 Q3 Q4 Year 1 Year 2 Year 3 Year 4 Year 5

Total Revenue 0 0 5 50 55 1,968 27,254 67,118 112,886

COGS 0 0 0 0 0 0 0 0 0

Gross Profit 0 0 5 50 55 1,968 27,254 67,118 112,886

Operating Expenses

Salaries 200 300 400 500 1,400 3,200 4,500 6,500 8,000

Professional Fees 5 5 5 5 20 30 40 50 80

Research and Development 0 0 0 0 0 100 150 200 300

Marketing & Advertising 0 0 50 100 150 750 1,500 3,000 6,000

Depreciation and Amortization 0 0 0 0 0 33 67 100 67

Non Recurring Expense 25 0 0 0 25 0 0 0 0

Others 50 50 50 50 200 100 150 200 250

Total Operating Expenses 280 355 505 655 1,795 4,213 6,407 10,050 14,697

Operational Income (Loss) (280) (355) (500) (605) (1,740) (2,245) 20,847 57,068 98,189

Income From Continuing OperationsTotal Other Income/Expenses Net 0 0 0 0 0 0 0 0 0

Earnings Before Interest and Taxes (280) (355) (500) (605) (1,740) (2,245) 20,847 57,068 98,189

Interest Expense 0 0 0 0 0 0 0 0 0

Income Before Tax (280) (355) (500) (605) (1,740) (2,245) 20,847 57,068 98,189

Income Tax Expense 0 0 0 0 0 0 7,297 19,974 34,366

Net Income (280) (355) (500) (605) (1,740) (2,245) 13,551 37,094 63,823


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Exhibit 14: Pro-Forma Revenue Growth Projections

Q1 Q2 Q3 Q4 Year 1 Totals Year 2 Year 3 Year 4 Year 5

Active Users 0 0 5,000 50,000 55,000 500,000 2,500,000 5,000,000 8,000,000

Booking Users 0 0 500 5,000 5,500 50,000 250,000 500,000 800,000

Pro Users 0 0 0 0 0 0 250,000 500,000 800,000

Daily Users 0 0 150 1,500 1,650 15,000 75,000 150,000 240,000

CPM ($) 0.00 0.00 5.00 5.00 5.00 10.00 15.00 20.00 20.00

Click ThroughRate 0.02 0.02 0.02 0.02 0.02 0.03 0.03 0.04 0.04

CPC ($) 0.40 0.40 0.40 0.40 0.40 0.50 0.60 0.70 0.80

CPA ($)

10.0

0

10.0

0 10.00 10.00 10.00 10.00 15.00 15.00 15.00

Conversion Rate 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.04

CPA Ad Views 0 0 13,000 130,000 143,000 5,200,000 26,000,000 52,000,000 83,200,000

CPM Ad Views 0 0 108,000 1,080,000 1,188,000 43,200,000 216,000,000 432,000,000 691,200,000CPC Ad Views 0 0 109,750 1,097,500 1,207,250 43,900,000 219,500,000 439,000,000 702,400,000

Lead Gen AdViews 0 0 1,750 17,500 19,250 700,000 3,500,000 7,000,000 11,200,000

Lead GenCommission Rate 0.05 0.05 0.05 0.05 0.05 0.08 0.08 0.10 0.10

Lead GenCommission PriceEstimate ($) 0 0 600 600 600 600 600 600 600

CommissionRevenue ($) 0 0 420 4,200 4,620 504,000 3,024,000 11,760,000 21,504,000

Travel InsuranceRevenue ($) 0 0 3,038 30,375 33,413 303,750 1,518,750 3,037,500 4,860,000

CPM Revenue ($) 0 0 549 5,488 6,036 439,000 3,292,500 8,780,000 14,048,000

CPC Revenue ($) 0 0 878 8,780 9,658 658,500 3,951,000 12,292,000 22,476,800

CPA Revenue ($) 0 0 104 1,040 1,144 62,400 468,000 1,248,000 1,996,800

SubscriptionRevenue ($) 0 0 0 0 0 0 15,000,000 30,000,000 48,000,000

Total Revenue ($) 0 0 4,988 49,883 54,871 1,967,650 27,254,250 67,117,500 112,885,600

Documents

Gravel Business Plan