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Finance and Investment

1. Strategies for investments:
Bank/debt finance - in beginning and during
Equity finance/Direct investment with venture capital fund - in the beginning and during

Direct investment from internal funds
Typically founders of the company will make a direct investment, buying some or all shares of the company. Not only is this the easiest way of funding, but there is also a valuable signal for other potential investors that the founder/s believe in the business idea (Conti et al. 2013). If the company seeks grants or other types of funding later, it may also be required that founders own a significant part of the own company (Cumming and Hellmann, 2013)

- We are 8 founders of the company Bravo Noodles, each of us will invest 200 000 SGD as the start-up capital making the first investment worth 1 600 000 SGD.

IPO

This is done when a company has had good growth for a couple of years and is ready to take a new step as this comes with a lot of requirements on, for instance profit and reporting (SGX).

· If start-up is successful and we manage to expand to Europe and maintain good profitability, IPO in Singapore will become an option to raise more money for expansion, innovative ideas and fund research or to gain publicity and create attention around our company.

Angel Investment

Angel investment is a common funding for start-ups. The ”Angel” is typically a wealthy individual investor providing high-risk capital to small, new businesses. The investor often plays an active role after investing in a company, can be either as a board member or act as an advisor and mentor (Arora et. al., 2023).

- Can be a potential funding idea for Bravo Noodle and in that case we need to attract Angel investor. This can be done through online platforms for investment networks, where we do a pitch for investors to demonstrate the potential and value of our business. (Other teammate)

Crowdfunding

Crowdfunding is funding from small retail investors that allows companies to raise money in an early stage. Usually this is done via internet-based platforms that bring together a wide variety of investors and entrepreneurs (Bradford, 2012).

· Straightforward way for us to start gaining attention by registering at a crowdfunding platform and talking to small investors. Bravo Noodles will try crowdfunding to attract community support and investment (Other teammate)

2. Pricing structure

Since Bravo Noodles will be established in two regions, Asia and Europe, we have two different pricing structures. Singapore will be the first main market for us in Asia. Here, instant noodles already exist in many unusual flavors and concepts, therefor we will have a competition-based pricing strategy in this market. This strategy focuses on price observations of our competitors. We have scanned the market and it's clear to us that there are two types of segments, economy and premium segment. We will launch products for both segments in Asia. For Europe it is a bit different, the competitors do not exist to the same extent therefore we will use another pricing strategy for our launch on noodles in the Nordics which is value-based pricing (Ingenbleek et al , 2003). This strategy utilizes the value of a product and is claimed to be the most profitable strategy (Cannon and Morgan, 1990; Anderson and Narus, 1998). For the Nordic market this suits perfect as Bravo Noodles brings new products to the market which gives us the opportunity to take advantage of our niche and price the noodles higher than in Singapore.

Cost and revenue

All prices expressed in SGD. Numbers do not contain decimals to simplify.

Average cost per noodle pack (portion) from factory.

Our factory is in Thailand, we buy noodle packs from there and the agreement with the factory is that we pay per pack as in per portion.

Average revenue per sold pack.

We sell in 5 packs meaning 5 portions per pack. Different prices in the two regions, higher prices in the Nordics partly due to transportation costs from Asia to Europe and due to price level on noodles is higher than in Asia.

3. Financials

In the start-up phase and 1st year, our costs will consist of:

· NOR is short for Norway, Oslo Port.

We have no HR costs as each of the owners will take an operative role in the company. We believe in the business idea and will consult with each other before taking out any profit, dividend, or salary from the company.

( https://www.freightos.com/freight-resources/ocean-freight-explained/ - freight calc)

Our total revenue is revenue per pack - cost per pack.

One standard pallet gives us the opportunity to ship 1.8 tons (1 800 000gram). Economy noodle pack is 100 gram. 1 800 000 gram/100 gram = 18 000 portion of economy noodles. A premium noodle pack is 130 gram. 1 800 000gram/130 gram = 13 846 portion of premium noodle per pallet. From the moment that the pallet is no longer on the boat, our distributors take over all responsibility and cost.

Breakeven
The breakeven point for Bravo Noodle to become profitable is when noodles are sold to a worth of the transportation and factory cost. Our marketing cost year one will be covered by our own capital. This is illustrated below; numbers indicate numbers of pack sold to become breakeven.

Balance sheet

Initial investment, own capital 1 600 000 SGD

4. Financial forecast assumptions
The instant noodle industry is strong and is predicted to grow even further, especially in regions outside Asia. According to market reports and studies the compound annual growth rate is expected to be 5% in Europe until 2030 (Stellar market research, 2022) and globally 5.95% until 2029. We feel comfortable going into this market as the interest for healthier noodles is increasing, which is in line with our products (Fortune business insights, 2021).

References:

Anderson, J.C. and Narus, J.A. (1998) Business marketing: Understand what customers value. Harvard Business Review 76 (6): 53-65.

Arora, V, Mehra, Y. S, Tandon, D. Start-up Financing: Multi-decadal Bibliometric Analysis of Venture Capital, Angel Investing and Equity Crowdfunding. South Asian Journal of Management. Jan-Mar2023, Vol. 30 Issue 1, p80-122. 43p.

Bradford, C. (2012). Crowdfunding and the federal securities laws. Columbia Business Law Review, 2012 (1), 1-150.

Cannon, H.M. and Morgan, F.W. (1990) A strategic pricing framework. The Journal of Service Marketing 4 (2): 19-30.

Conti, A., Thursby, M. and Rothaermel, F. (2013) “Show Me the Right Stuff: Signals for High Tech Startups”, Journal of Economics & Management Strategy, 22(2): p 341-364.

Cumming, S. and Hellmann, T. (2013) Non-Dilutive Funding Opportunities for Entrepreneurs in British Columbia,

Canada. Project Report. Vancouver: University of British Columbia, Sauder School of Business.

Ingenbleek, P., Debruyne, M., Frambach, R. and Verhallen, T. (2003) Successful new product pricing practices: A contingency approach. Marketing Letters 14 (4): 289-305.

Miglo, A. (2022) Theories of financing for entrepreneurial firms: a review. MPRA Paper No. 115835, posted 30 Dec 2022.

Websites:

Fortune business insights, (2021) Collected 2023-02-15: https://www.fortunebusinessinsights.com/industry-reports/instant-noodles-market-101452.

IPO info: https://www.sgx.com/securities/mainboard

Stellar market research, (2022). Collected 2023-02-15: https://www.stellarmr.com/report/Europe-Instant-Noodles-Market/969