Brenno: A 30c offer might be in the mix but I doubt we'd hear about it.
The Board will ask us to approve what they consider the best offer and my thinking is why take 30c if confident of a $3 sp in 5 years. So it's more likely a partner/license deal and the market which isn't aware of alt valuing us at 3c; until real sales roll in.
Why I believe a billion $ deal possible: Rather than the broad 1/10 of 6% of global target market, in this example I'll use a more realistic 50% of sales from USA (our partners 1st & primary market) & 50% from the rest of the Western world, leaving even Japan and Sth Korea for future blue sky. Still applying half sales from the moderate to severe target, half of that from POP and sexual dysfunction market, and half from 'other' such as new mothers, health & fitness, those buying only for sexual performance, gives me a ballpark market of 35 million potential customers.
Now Brenno imagine you're an expert at S&M (no Brenno, that's sales & marketing); you are so good you can profit in highly competitive tampon and toothpaste markets. So clever you've become VP s&m for Proctor & Gamble, and have been asked to look at this PeriCoach. Immediately you identify keys like game changer, monopoly, moat, subscription based, massive market, first mover, ease of use; just for starters.
You ask yourself 'for every 10 women who really should try this how many could I sell?' 5 you think, 3 you tell your boss, 1 is the basis for his initial negotiation (200m yearly profit, 1billion recouped in only 5 years at worst case scenario). 'Pfft!' is Corr's reply to that offer.
Each corporation will offer different valuations, running a range of complex but subjective scenarios regarding profits, costs, roe, etc. and risk adjusting, probably using most likely outcomes rather than worst case. There is no specific precise method to determine our products worth. One major might look at worst case sales and want 5 times their money back in 10 years (yr 1=0, 2=200m, 3=400m, 4=600m, 5=800m, etc; sales growth, subscription model = plenty of room for error)
Some other factors reducing risk & therefore influencing higher valuations are - Corr's presence; how far we've come in product development - manufacturing, v3, professionals recommending; fda, ce, tga, otc approvals; strong ip & patent protection; multiple markets; having Chelsea Cornelius leading product development; MM's success in other endeavours; etc.. And the bidding process encourages higher offers. Factors countering a premium valuation include our lack of sales traction, lack of cash and tiny clinical trial. What don't we know, i.e. how many product returns, how are the sensors holding up over time, are they truly accurate, what is the production failure rate.
Of interest to me is that I keep coming up with very big numbers looking at it in different ways.
Just as this is only expressing my thoughts, so is the following - an overriding caveat. The penny dropped on the importance of data collection when I noted PeriCoach now retailing for $230. That must be at cost (indicating profit margin of 25%, not the 20% I've been using - more room for error).
Why? Other than getting numbers in the market, customer reviews, and traction, all of which help getting a good deal, it will primarily be about confirming and extending the so-called clinical trial results. Somehow I concluded results needed to be around 50% improvement for Pericoach to be a commercial success and they were pretty much spot on. (It's nice to be involved with a product having a profound positive effect on peoples lives) But the number of people involved was disappointing.
V3 can reveal if those indicative numbers are consistent with subsequent users, or maybe better. And now things I haven't understood make sense, like why spend scarce money on v3 when v2 seemed fine, and a focus being on data rather than sales. "The value is in the data", MM's comment, could be interpreted as V3 results are confirming the value of PeriCoach.
To all. Perhaps we shouldn't be guessing sp on deal. Maybe instead we should be asking how many could I sell per 10 customers who should have a PeriCoach. A consensus, average or mean figure on this could be a good indicator of true value.
We know Brenno could sell to half, but he's a smart a. I couldn't sell an umbrella in the rain, so the answers 0. What about you?
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