The Great Real Jock Entrepreneurs Challenge: Setup Phase

  • conservativej...

    Posts: 2465

    Nov 26, 2010 10:10 PM GMT
    Ok. Since many of us have discussed, or sometimes argued, points of view concerning the U.S. economy, with perspectives ranging from ultra-liberal to ultra-conservative, I want to propose something in which all sides can participate.The key word here is "can". I'll explain what I have in mind.

    For now, this thread is meant to be a starting point for how we pull the Great Real Jock Entrepreneurs Challenge together. I want you guys to give input into how the rules of operation are formed. I'll start off by laying out the foundation requirements for how we proceed. This is the basic idea.

    If you have an idea of a business you would like to start I will fund the winner of the Great Real Jock Entrepreneurs Challenge. The business must manufacture an item or product. That is a requirement I will not forego. You must manufacture the product in the good old U.S.A. To enter, you must provide notification of your entry to: conservativejock@gmail.com.

    I will make entry somewhat easy, but I warn everyone that what I request will not be easy to assemble and many RJ members will not be able to perform to this level. I require the following:

    The basic business idea. A non-disclosure agreement placing the first layer of protection for both you and I in place. I will need one of two things: pro forma budget, cash flow, and income statement for a period of three years; or these items for the period until the business is projected to hit break-even. You must form your budget based on real cost numbers that you can validate. For instance, for applied labor you must cost the postiion inclduing benefits, taxes,etc, including monthly social security payments, etc. The budgets, cashflows, and income statements need to be in Microsoft Excel form.

    When we agree on a framework beyond this, I will fund up to $20MM. The idea you present must be verifiable as to it's ability to produce real income.

    For the startup period the winnder will have to accept control via an executive committee. I'll likely fund the company via a private placement of preferred shares which I will purchase. These will hold all voting rights of the company. As you prove you can start and operate the business I'll move preferred shares over to common shares that vote and we'll split these 50/50.

    Thoughts?

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    Nov 26, 2010 10:34 PM GMT
    Truly interesting. I doubt you will find anyone on RealJock who can produce a valid budget for anything like you propose. These guys understand the tax side but not the production of income side.
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    Nov 26, 2010 10:40 PM GMT
    ElysianReport saidTruly interesting. I doubt you will find anyone on RealJock who can produce a valid budget for anything like you propose. These guys understand the tax side but not the production of income side.


    You say so, but don't know. There are business owners on RJ.

    Surprise, eh?

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    Nov 27, 2010 2:57 AM GMT
    meninlove said
    ElysianReport saidTruly interesting. I doubt you will find anyone on RealJock who can produce a valid budget for anything like you propose. These guys understand the tax side but not the production of income side.


    You say so, but don't know. There are business owners on RJ.

    Surprise, eh?



    Well guys, perhaps you need to put on the thinking caps and use your bussiness acumen.
  • laxdude25

    Posts: 604

    Nov 27, 2010 3:05 AM GMT
    With all due respect to the OP, as a finance guy in venture capital who considers start-up proposals daily, I am surprised that the proposal you presented is as full of grammatical and spelling errors as it is. These errors lead me to wonder whether I should take your proposal seriously or not. I'm delighted to take this off-line, but I know if I received the proposal as currently written, I would assume it is not at all serious. That said, it is a great concept.
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    Nov 27, 2010 3:05 AM GMT
    lol, no. Read the requirements.

    -Doug
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    Nov 27, 2010 3:49 AM GMT
    meninlove saidYou say so, but don't know. There are business owners on RJ.

    Surprise, eh?

    How could productive business owners possibly have time to waste on RJ?
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    Nov 27, 2010 3:52 AM GMT
    Caesarea4 said
    meninlove saidYou say so, but don't know. There are business owners on RJ.

    Surprise, eh?

    How could productive business owners possibly have time to waste on RJ?


    It's called vast assumption. We never said we were the business owners. icon_wink.gif

    It also depends on how big the business is, and how much of a micro-manager one is.

    -Doug
  • camfer

    Posts: 892

    Nov 27, 2010 4:27 AM GMT
    What are the criteria by which the entries are judged?
    Who is evaluating the submissions?
    Who is on the executive committee of the winning project?
    What is the minimum funding amount for a project?
    What is a compelling annual gross for the business 3 years out? 10 years out?
    How do you define a manufactured product? Is a value-added agricultural product considered to be manufactured?
    What does RJ have to do with this?
    How are the "liberals" and "conservatives" posting on RJ forums participating in this?
    Please don't take this personally, but why would anyone have enough trust in an anonymous, faceless profile on a website to make a submission?

    Just trying to flesh things out a little more here. I don't quite understand the proposal.
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    Nov 27, 2010 4:35 AM GMT
    Who actually thinks that you can make money by manufacturing stuff in the US to begin with?

    If I'd own or think about setting up a manufacturing business I'd never ever do it in the US, ever.
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    Nov 27, 2010 4:44 AM GMT
    Why is it the most absurd threads get the most replies....icon_question.gif
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    Nov 27, 2010 4:57 AM GMT
    Andre_84 saidWhy is it the most absurd threads get the most replies....icon_question.gif


    When you posted this with that pic of you looking through a window I was reminded of Laugh-In (too cool!)

    -Doug





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    Nov 27, 2010 5:00 AM GMT
    Andre_84 saidWhy is it the most absurd threads get the most replies....icon_question.gif


    most people dont go on Realjock "fitness health, life and dating" site to talk about work
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    Nov 27, 2010 5:50 AM GMT
    Starting a business isn't a contest. I don't know if you actually have good intentions or are drunk and had a "bright idea." As a hard-working employee of a startup, I find this thread sort of insulting. It trivializes the hardship of creating a new business, as well as insults anyone who has the genuine intelligence to manage one.

    The OP, in addition to lacking any sort of professional conduct (having "conservative" in your screenname is not an automatic badge of financial know-how), needs to be far less condescending in tone if he is serious. Focus less on pointing out how few members will live up to "your standards," and actually prove why anyone should consider you as an investor, or give you any sort of control in a company. You need "them" far more than they need you. What are your credentials? Humility, spelling, and grammar certainly aren't there. In any other thread, that doesn't matter--but those are basic-level skills compared to the organization, perseverance, and ingenuity required to fund a business.

    There are thousands upon thousands of potential investors in the US. There are far, far fewer individuals who actually have a sound business idea, as well as the ability to back it up.

    To anyone out there desiring to build a business or manufacture a product--GO FOR IT. If you need investors, seek out those with experience in your field. Investors aren't sugar daddies; they're the baseboards of your business, and those baseboards cannot have a single crack. Never, ever, ever take on an investor who dictates terms for you. Take an investor who trusts in you and your idea. If the trust between you both isn't natural and 110%, it WON'T WORK. Businesses aren't started by money. They're started by worthwhile people who work phenomenally toward a common goal.
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    Nov 27, 2010 7:58 AM GMT
    And the buck stops there... Or does it?
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    Nov 27, 2010 8:38 AM GMT
    Skotlake saidNever, ever, ever take on an investor who dictates terms for you.
    Have you ever directly worked with a venture capital firm?
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    Nov 27, 2010 8:40 AM GMT
    Tazo995 saidWho actually thinks that you can make money by manufacturing stuff in the US to begin with?

    If I'd own or think about setting up a manufacturing business I'd never ever do it in the US, ever.


    As an aside, I don't know if the OP is serious or not either, but I will say that manufacturing in the US is still very much viable.

    http://articles.moneycentral.msn.com/Investing/CompanyFocus/the-myth-of-us-industrys-demise.aspx
    "U.S. workers produce 21% of all factory goods made globally, or about $1.7 trillion worth per year. That's significantly lower than the peak of 28% in 1985 but only slightly below the long-term average of 23% for 1970 through 2006."

    My company manufactures components for clients in North America and I am about to start a new company that does assembly and light manufacturing, warehousing and distribution out of Canada but that's by virtue of the fact I reside here though I'm not looking for funding. Theoretically it might be marginally cheaper for me to do this in the US now that the Canadian dollar has risen so rapidly relative to the USD.

    I think to build a viable manufacturing business in the US now, you would have to automate significantly or focus on items that are highly customized and run in smaller volumes because this is difficult to do in Asia. Things that are bulky to ship as well make it difficult to be made overseas given the cost of shipping. To maintain control over intellectual property it would be wise to consider doing final assembly either off site of your general contractors in places like China or final assembly in the US despite the marginally higher costs if it's just final assembly and packaging.

    Anyway, there are a lot of reasons and ways you can stay competitive in the US. You just have to pick and choose your battles.
  • metta

    Posts: 39134

    Nov 27, 2010 9:44 AM GMT
    This kind of reminds me a recent reality television show...don't remember what it was called...where people spoke to venture capitalists and tried to get investors for their business to grow or started.

    In regards to the proposal, I don't know if I like the idea of someone creating a business from a concept that they created and having no ownership or control from the very beginning. I understand that the OP has to protect his capital, but there must be a more fair way to do it than that.
  • UncleverName

    Posts: 741

    Nov 27, 2010 10:02 AM GMT
    This, as described, basically sounds like the RJ equivalent of the Dragon's Den. Don't know if that shows in the US, but it's huge in the UK and in Canada.

    A great idea. At worst, if someone took the time and energy to put together everything described by the OP, and didn't win, they'd still have a good concept and business idea that they could take to other venture capitalists.

    I think. I've never done any of that myself icon_eek.gif
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    Nov 27, 2010 10:21 AM GMT
    riddler78 said
    Tazo995 saidWho actually thinks that you can make money by manufacturing stuff in the US to begin with?

    If I'd own or think about setting up a manufacturing business I'd never ever do it in the US, ever.


    As an aside, I don't know if the OP is serious or not either, but I will say that manufacturing in the US is still very much viable.

    http://articles.moneycentral.msn.com/Investing/CompanyFocus/the-myth-of-us-industrys-demise.aspx
    "U.S. workers produce 21% of all factory goods made globally, or about $1.7 trillion worth per year. That's significantly lower than the peak of 28% in 1985 but only slightly below the long-term average of 23% for 1970 through 2006."

    My company manufactures components for clients in North America and I am about to start a new company that does assembly and light manufacturing, warehousing and distribution out of Canada but that's by virtue of the fact I reside here though I'm not looking for funding. Theoretically it might be marginally cheaper for me to do this in the US now that the Canadian dollar has risen so rapidly relative to the USD.

    I think to build a viable manufacturing business in the US now, you would have to automate significantly or focus on items that are highly customized and run in smaller volumes because this is difficult to do in Asia. Things that are bulky to ship as well make it difficult to be made overseas given the cost of shipping. To maintain control over intellectual property it would be wise to consider doing final assembly either off site of your general contractors in places like China or final assembly in the US despite the marginally higher costs if it's just final assembly and packaging.

    Anyway, there are a lot of reasons and ways you can stay competitive in the US. You just have to pick and choose your battles.


    Interesting, good points for sure. I do however think that it's only a matter of time before the Chinese and other Asian countries take those segments over, as well.

    A few years back the port of Amsterdam ordered a bunch of new container cranes, you know the big usually red ones. They were fully built in Shanghai and eventually dragged all the way to Amsterdam by ship. Those cranes require some pretty sophisticated technology to work, and the logistical effort to move them is enormous.

    Just saying that in other industries as the Chinese are rapidly increasing their skills, so it's gonna be very interesting to see how that goes in the coming years.
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    Nov 27, 2010 12:08 PM GMT
    Tazo995 said
    riddler78 said
    Tazo995 saidWho actually thinks that you can make money by manufacturing stuff in the US to begin with?

    If I'd own or think about setting up a manufacturing business I'd never ever do it in the US, ever.


    As an aside, I don't know if the OP is serious or not either, but I will say that manufacturing in the US is still very much viable.

    http://articles.moneycentral.msn.com/Investing/CompanyFocus/the-myth-of-us-industrys-demise.aspx
    "U.S. workers produce 21% of all factory goods made globally, or about $1.7 trillion worth per year. That's significantly lower than the peak of 28% in 1985 but only slightly below the long-term average of 23% for 1970 through 2006."

    My company manufactures components for clients in North America and I am about to start a new company that does assembly and light manufacturing, warehousing and distribution out of Canada but that's by virtue of the fact I reside here though I'm not looking for funding. Theoretically it might be marginally cheaper for me to do this in the US now that the Canadian dollar has risen so rapidly relative to the USD.

    I think to build a viable manufacturing business in the US now, you would have to automate significantly or focus on items that are highly customized and run in smaller volumes because this is difficult to do in Asia. Things that are bulky to ship as well make it difficult to be made overseas given the cost of shipping. To maintain control over intellectual property it would be wise to consider doing final assembly either off site of your general contractors in places like China or final assembly in the US despite the marginally higher costs if it's just final assembly and packaging.

    Anyway, there are a lot of reasons and ways you can stay competitive in the US. You just have to pick and choose your battles.


    Interesting, good points for sure. I do however think that it's only a matter of time before the Chinese and other Asian countries take those segments over, as well.

    A few years back the port of Amsterdam ordered a bunch of new container cranes, you know the big usually red ones. They were fully built in Shanghai and eventually dragged all the way to Amsterdam by ship. Those cranes require some pretty sophisticated technology to work, and the logistical effort to move them is enormous.

    Just saying that in other industries as the Chinese are rapidly increasing their skills, so it's gonna be very interesting to see how that goes in the coming years.


    I wouldn't be as concerned. The Chinese like the Japanese before them are reasonably good at copying ideas. I should have specified that for bulky lower dollar value items, it is often cheaper to produce domestically. It sounds like the crane would be a fairly high dollar value item. The Chinese are advancing technologically - but the level of technology adoption is not consistent across firms. By this, I just mean that there are definitely some exceptions - but the real innovation is still happening in places like the US.

    Also, unless we figure out teleportation, or much faster and substantially cheaper forms of transportation (possibly massive reductions in energy costs) there will be a lot of products that will still be more effectively manufactured closer to market. By the time we do figure out something like teleportation, we may have figured out replicators which also makes this point moot. It takes generally 28 days to move product from China to the East Coast. Chinese manufacturers are also generally not set up for mass customization - so the orders they want are in container loads at a time. It requires a significant amount of coordination and cooperation to pull material from a variety of different factories together to ship in a container.

    Finally, China's economic growth will not have a linear trajectory. If you thought the US had problems, China has substantially more in order to keep their economy moving and their people happy. From their currency, to inflation, to asset bubbles, to questionably solvent banks, to the continual threat of insurgency, China's current growth may be exciting but also very much uncertain.
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    Nov 27, 2010 4:26 PM GMT
    ElysianReport saidTruly interesting. I doubt you will find anyone on RealJock who can produce a valid budget for anything like you propose. These guys understand the tax side but not the production of income side.


    how can you know this? Unverifiable pontification. Pull yourself together and stop writing crap.
  • conservativej...

    Posts: 2465

    Nov 27, 2010 4:40 PM GMT
    laxdude25 saidWith all due respect to the OP, as a finance guy in venture capital who considers start-up proposals daily, I am surprised that the proposal you presented is as full of grammatical and spelling errors as it is. These errors lead me to wonder whether I should take your proposal seriously or not. I'm delighted to take this off-line, but I know if I received the proposal as currently written, I would assume it is not at all serious. That said, it is a great concept.


    Point well taken. But I am the one who will review. (Sentence fragment back there. icon_rolleyes.gif )

    Feel free to PM me.
  • conservativej...

    Posts: 2465

    Nov 27, 2010 4:41 PM GMT
    Caesarea4 said
    meninlove saidYou say so, but don't know. There are business owners on RJ.

    Surprise, eh?

    How could productive business owners possibly have time to waste on RJ?


    Because I am old, cantankerous and retired.
  • conservativej...

    Posts: 2465

    Nov 27, 2010 5:25 PM GMT
    I'm going to inline my comments here. Thanks for your post.

    camfer said

    What are the criteria by which the entries are judged?

    Viability. By that I mean a business concept that can be validated in terms of the cost information you provide and the provability of your sales projections. Ideally, since I required this to be manufacture of a product, you would have a customer in mind.

    Let me illustrate. Say you live near the Mercedes plant in Alabama. You have an idea of a tool or part they could use. Start on your side by contacting Mercedes and sell the idea. Keep in mind you must protect yourself when you approach them.


    Who is evaluating the submissions?

    Me alone.

    Who is on the executive committee of the winning project?

    I have no fixed idea here. Typically what I do when I pull up a startup is to select staff based upon the need that cannot be covered by the individual or individuals that submit the proposal. As you might guess this is highly influenced by the nature of the business. There is a remarkable difference between a service business and a manufacturing business. My career began in manufacturing. My choice was to post to fund such a business.

    One of my most recent funding was for a company that manufactures Doppler lasers. The originator of the idea actually brought up the technical side through an R&D shop we established. He did not want to be involved in day-to-day management.


    What is the minimum funding amount for a project?


    I personally think the $20MM is low in the manufacturing sector. I will not under any circumstances however pass on a product where the market has significant potential. So I'm flexible here. The range can be from a low number to a very large number. The key word again is viability.


    What is a compelling annual gross for the business 3 years out? 10 years out?

    I personally would want to see the business past its break-even point prior to three years out. I can set the return on the preferred shares to accelerate that break even. All of this is configurable on a per project basis.

    What I want to see is your idea of how you can work this in your startup pro formas. I can work around the rest.


    How do you define a manufactured product?

    Basically durable goods or a part or assembly used in a durable good.

    Is a value-added agricultural product considered to be manufactured?

    I would consider it. Lol. I doubt that would be an issue. I work in this area now on a large scale.

    What does RJ have to do with this?

    The connection is solely for the purpose of allowing people to put action behind the mouth. Many, many on this site constantly claim to know the answer to creating jobs in America. Now is their chance. It's put up or shut up.

    Based on your questions, my guess would be you are one of a small number here who can create jobs, given capital.


    It is a remarkable contrast between those who expect government to tax to provide for their welfare versus those who know how to create a business with self-liquidating debt.

    How are the "liberals" and "conservatives" posting on RJ forums participating in this?

    I have not read through the thread posts as yet. It seems your post was near the top. Who knows how they will participate. I welcome all ideas.

    There is a BIG however here. I purposely required detail pro formas. This means the person or persons proposing must estimate labor rates, etc. Insurance, etc. I'll take this in part form to begin with, but I want to see capability here.

    Obviously, your political persuasion will affect whether the business is successful. If you wish to pay your CEO $20,000 a year and line workers $100,000 a year, you are likely in trouble.


    Please don't take this personally, but why would anyone have enough trust in an anonymous, faceless profile on a website to make a submission?

    You will not be faceless were I to commit. This will take a great deal of trust, time, and work to pull off. I realize most guys here will not be able to move as quickly as someone who is used to making submittals to someone like our venture capital guy who posted.

    I am very serious when I say build a non-disclosure before you pass anything to me. If your idea sounds good in a short executive summary, I can assist in you building this.

    For me, this is similar to the incubator that you would see at a university. The numbers are relatively small and I'm not terribly busy.


    Just trying to flesh things out a little more here. I don't quite understand the proposal.

    Fair enough. I'm looking for new startups in a terribly odd way. Look at this as the Junior Achievement packaged in RealJock. It is to a great degree a small glance into the world in which I thrive.