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Funding Request
Total Required: 22.4M ETB ($400,000 USD)
- Equity Offering: 40% stake for investors.
- Use of Funds:
- Location lease (8M ETB for Bole district).
- Kitchen equipment (6M ETB for wood-fired ovens).
- Marketing launch (3M ETB).
ROI Assurance:
- 18% annual return via profit-sharing until Year 3, followed by buyback options.
**Expanded Funding Request & ROI Assurance**
**Total Required**: 22.4M ETB ($400,000 USD at 1 USD = 56 ETB)
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### **Equity Offering**
- **40% Stake**: Valued at 22.4M ETB, implying a pre-money valuation of **56M ETB** ($1M USD).
- **Valuation Justification**:
- **Asset-Based**: 35M ETB (property leases, equipment, IP).
- **Growth Potential**: 3x revenue multiple (Year 1 revenue: 16.8M ETB).
- **Investor Rights**:
- Board seat for equity holders >15%.
- Quarterly financial reporting.
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### **Use of Funds**
| **Category** | **Amount (ETB)** | **Details** |
|------------------------|------------------|-----------------------------------------------------------------------------|
| **Location Lease** | 8,000,000 | 200 sqm in Bole district (prime foot traffic) at 400 ETB/sqm/month (3-year lease). |
| **Kitchen Equipment** | 6,000,000 | 2x wood-fired ovens (3M ETB each), dough mixers, refrigeration units. |
| **Marketing Launch** | 3,000,000 | Influencer campaigns (1.5M), TikTok challenges (1M), tastings (500K). |
| **Contingency Fund** | 3,400,000 | Buffer for permit delays, currency fluctuations, and staffing. |
| **Working Capital** | 2,000,000 | Initial inventory, POS systems, and staffing (first 3 months). |
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### **ROI Assurance**
1. **18% Annual Return (Years 1–3)**:
- **Structure**: Profit-sharing dividend (18% of total investment/year = 4.03M ETB).
- **Priority**: Paid before owner dividends; shortfalls rolled over to next year.
- **Example**:
- Year 1 Net Profit: 3.36M ETB → 3.36M paid (83% of 4.03M), 0.67M deferred.
- Year 2 Net Profit: 5.04M ETB → Pays Year 2 (4.03M) + Year 1 deferred (0.67M).
2. **Buyback Options (Post-Year 3)**:
- **Terms**: Investors can sell shares back at 1.5x original price (33.6M ETB for 40% stake) or hold for franchising/exit.
- **Exit Valuation**: Projected 5x EBITDA (Year 3 EBITDA: 10M ETB → 50M ETB valuation).
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### **Investor Benefits**
- **Tax Incentives**: Ethiopia’s 5-year income tax holiday for agro-processing ventures.
- **Perks**:
- Free catering for personal events (up to 50,000 ETB/year).
- VIP access to “Island Night” events.
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### **Risk Mitigation**
| **Risk** | **Mitigation** |
|-------------------------|-------------------------------------------------------------------------------|
| **Profit Shortfall** | Contingency fund covers 6 months of dividends; deferred payments accrue 8% interest. |
| **Currency Volatility** | 50% USD hedging via Ethiopian Commodity Exchange. |
| **Regulatory Delays** | Boaz Trading PLC’s legal team expedites permits (prior success rate: 90%). |
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### **Alignment with Financials**
- **Year 1**: 3.36M ETB net profit covers 83% of 4.03M ETB dividend (balance deferred).
- **Year 2**: 5.04M ETB profit covers Year 2 + deferred Year 1 dividends.
- **Year 3**: 6.72M ETB profit covers Year 3 dividend + buyback liquidity.
---
### **Exit Strategy**
1. **Acquisition**: Target int’l chains (e.g., Domino’s) entering Ethiopia at 8x EBITDA.
2. **Franchising**: License 10 locations by 2030 at 5M ETB/franchise (50M ETB revenue).
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**Why Invest?**
This offering balances **security** (priority dividends) with **upside** (buyback/exit multiples). With Ethiopia’s F&B sector growing at 12% CAGR and Boaz’s first-mover advantage, the 40% stake offers a rare entry into Africa’s next dining revolution. 🚀🍕
