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Position Integrity Issues
Business Plan to Venture Capitalists
August 1,
2000 At the
request of several prominent Venture Capital firms, Position Integrity released
today a Business Plan and Investment Prospectus to help raise funding for
several new global initiatives. An
Executive Summary is provided below. If
you would like to obtain a copy of the Business Plan in electronic format,
please contact Robert A. Severino at Position Integrity
or by email at robert.severino@positionintegrity.com Executive
Summary
Company Overview Position Integrity (PI) is a privately-held technical
services company which is seeking to become the low-cost, one-stop content provider of global navigation and
atmospheric data and imagery for all consumer, commercial, military and
scientific applications. The company
specializes in the acquisition, processing, and distribution of government and
military data that aid in the field of "situational awareness" for
both the aviation and marine industries. In
its self-funded status, Position Integrity has already generated over $4
million in revenue through the successful completion of a series of
contract engagements with various agencies of the U.S. government (e.g. the
Navy, NASA/JPL), as well as with several leading private sector concerns (e.g.
Honeywell). Using the proceeds from
these contracts and the resulting technology innovations from this work,
Position Integrity subsequently developed several packaged products for the
aviation industry, as well as a PC-based moving map software application
suite. A number of these "data
products" are in the process of being, or are already licensed to various
industry leaders in navigational data provision. Position Integrity has also developed a unique patent-pending process for transforming and consolidating
critical elements of worldwide aeronautical and nautical navigational data
(produced by agencies like JPL, NIMA, and NOAA) into a single repository called
the PI Geospatial Database Framework (GDF).
Position Integrity has continued to enhance and augment this global
data-warehouse, which collects, correlates and maintains these disparate sets
of data to create a framework that has a virtually limitless capacity for
customization. And, in contrast to
current industry leaders that market only proprietary products to end-users, PI offers its customers a multitude of
custom-tailored products and services that are not only extremely useful to
both pilots and mariners, but are also in increasing demand throughout a broad
range of other market segments. By leveraging the Internet for its
distribution and a production system that uses industry standard database
technology, PI is capable of creating customized extracts for each consumer or
OEM (original equipment manufacturer), thereby allowing every client to obtain
their data in exactly the formats they require. Moreover, our prior access approvals, security clearances and contractual relationships with government agencies constitute enormous barriers to
entry for anyone trying to duplicate our success. Opportunity Position Integrity intends to revolutionize the existing business strategies that are
endemic to the currently fragmented and conflicted industries of aviation and
maritime navigational data provision.
Both industries are presently facing formidable obstacles in retooling
their operations to adjust to the market's escalating demand for electronic,
instead of paper-based, products.
Because such a transition entails not only tremendous cost, but also the
restructuring of existing staff and paper-based production and distribution
systems, industry constituents have been extremely slow to meet this
challenge. Exhibiting a "take it
or leave it" attitude with respect to the provision of data in anything
other than their traditional restrictive formats, they continue to resist this
shift to a primarily electronic environment. Their dependence on legacy
paper-based products, which have for so long been the basis of their
profitability and market dominance, has left them ill prepared to meet the
demands of the current electronic marketplace. Recent market analysis suggests that there is a combined opportunity of over $500 million in the aviation
and marine data provision markets--an opportunity that is estimated to grow to
over $1 billion within five years.
Furthermore, the marine market for navigational data, which is an order
of magnitude greater than its aviation counterpart, remains largely untapped.
These conditions give Position Integrity the ability to seize market share
without the encumbrance of intense initial competition. Also, because of
Position Integrity's heritage and demonstrated success in the production and
distribution of electronic data, it is well-situated to capture a sizeable
market share in unexploited areas of the marine sector, as well as to challenge
the incumbent in the aviation market in terms of both technical innovation and
overall product value. As an
established business operation with an
existing customer base, Position Integrity is already both
structurally and strategically configured to meet the distinctive demands of
the e-commerce arena--where the future of the navigational data provision
industry inevitably lies. Products and
Services Position Integrity has grown far beyond the "concept
phase" of development, having established several key strategic alliances
and licensing agreements, as well as possessing a customer base that is already paying for tailored data subscriptions,
recurring real-time updates and technical consulting services. Using high-speed Internet servers as our
distribution channel, PI is able to connect directly with our users' computers
on a 24 x 7 basis, within both B2B and B2C domains. In addition, satellite communications and the wireless revolution
are ushering in a global infrastructure that will enable updates from our
automated data warehouse directly to our customers' on-board computers. Furthermore, our next generation of
JPL-generated products will be derived from high-ticket NASA satellite and shuttle
missions, where long-standing relationships with governmental agencies give us
the inside track on getting these electronic maps first to market. As such, we project that by mid-2001 we will
actually manage the electronic portal providing public access to these
previously classified sets of data.
And, in contrast to the industry's current reliance upon obtaining
distinct data elements from different data providers, the net effect of PI's
strategic implementation will be a single point of contact for every
client's specialized navigational needs. Funding Requirements Position Integrity is seeking $5 million in venture funding to establish itself as the dominant
navigation data provider for the marine and aviation industries, in return for
which the investor(s) would receive a 30% membership in the LLC. During the first 24 months, these funds will
be applied equally for research and development, as well as to marketing and
promotion. Additionally, certain funds
will be allocated to establish a corporate headquarters in the Irvine,
California area. The largest element of
our intended R&D expenditures will be the salaries and related benefits for
the technical and management resources we will recruit and hire. Our largest marketing expense will be directed
toward advertising initiatives aimed at creating immediate and sustained brand
awareness. Any additional funding
requirements will be satisfied with income generated during this interim
two-year period. Investor Payoff Position Integrity intends to generate nearly $17 million in revenue by the end of its second full calendar year of venture-funded operation. More importantly, with a gross profit margin
in excess of 75 percent, Position Integrity will be profitable within 15 months.
Further, because it already has
an initial product offering suitable for
deployment in the aviation industry, it can begin generating revenue almost
immediately. This will complement
initial venture funding and reduce the overall amount required to establish and
sustain a dominant market presence. Capturing less than 3% of the existing aeronautical market
for digital navigational data subscriptions would repay our investors over the
base period (2000-2003). Accordingly,
the 6% share of the aeronautical market that we intend to control by 2003 will
yield a handsome ROI for all investors.
Moreover, this analysis does not even consider the revenue from the
marine market products we will launch in 2001. By the fourth year of operation, an equity position in PI will be founded on three formidable
assets: 1) material market penetration
in two niches formerly dominated by a few long-standing incumbents, 2) an increasingly profitable operation with
decreasing overhead, and 3) a cash
balance allowing for a sizeable return on investment. These assets will afford an easy exit
strategy for the investor, either by cashing out, through sale of the company
to an entrenched competitor, or as a result of gains realized from an Initial
Public Offering, the latter two which will almost certainly yield a marked
increase in membership or share valuation. Conclusion Position Integrity offers an exceptional investment
opportunity. It seeks to apply
technology innovation to a niche market with high barriers to entry and few
capable competitors. It brings not only
a solid business model, but also an established market presence, an existing
initial product line, and validated marketplace opportunities. Its products and services, both present and
prospective, offer high profit margins that can be sustained with only modest
investment. In light of the uncertainty
surrounding many of today's technology investment opportunities and Internet
startups, Position Integrity is a truly compelling business prospect. For
more information contact Robert A. Severino at Position Integrity
or by email at
robert.severino@positionintegrity.com |
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