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==Summary== | ==Summary== | ||
==Operations== | ==Operations== | ||
===What's the mission of the company?=== | ===What's the mission of the company?=== | ||
===What's the company's main offering(s)?=== | ===What's the company's main offering(s)?=== | ||
====Who’s the target audience of the company’s flagship product?==== | ====Who’s the target audience of the company’s flagship product?==== | ||
The audience is | The audience is people who are actively involved in the process of deciding which investments to make. | ||
====What's the flagship product?==== | ====What's the flagship product?==== | ||
The product is a real estate investment platform | The product is a real estate investment platform. | ||
====What makes the flagship product unique?==== | ====What makes the flagship product unique?==== | ||
The uniqueness of the platform is that the information | The uniqueness of the platform is that the investing information is recorded on a blockchain. Research suggests that recording the information on a blockchain will, in time, result in Active Investors making investments faster and/or at a lower cost, and, ultimately, more money. | ||
===What's the biggest achievement of the company?=== | ===What's the biggest achievement of the company?=== | ||
===What's the next key milestone of the company?=== | ===What's the next key milestone of the company?=== | ||
==Market== | ==Market== | ||
===What's the total addressable market of the company?=== | ===What's the total addressable market of the company?=== | ||
===What's the serviceable available market of the company?=== | ===What's the serviceable available market of the company?=== | ||
===What's the serviceable obtainable market of the company?=== | ===What's the serviceable obtainable market of the company?=== | ||
==Competition== | ==Competition== | ||
==Team== | ==Team== | ||
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|- | |- | ||
|What's the estimated current size of the total addressable market? | |What's the estimated current size of the total addressable market? | ||
| | |£635,325,000,000 | ||
|Here, the total addressable market (TAM) is defined as the global advertising market, and based on a number of assumptions<ref group="Note" name="Note01" />, it is estimated that the size of the market as of today (14th March 2022), in terms of revenue, is | |Here, the total addressable market (TAM) is defined as the global advertising market, and based on a number of assumptions<ref group="Note" name="Note01" />, it is estimated that the size of the market as of today (14th March 2022), in terms of revenue, is £635 billion (or $850 billion). | ||
|- | |- | ||
|What's the estimated terminal annual growth rate of the total addressable market? | |What's the estimated terminal annual growth rate of the total addressable market? | ||
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|Research shows that the growth rate of the global advertising market (i.e. the total addressable market) is similar to the growth rate of global gross domestic product<ref>http://www.robertpicard.net/files/econgrowthandadvertising.pdf</ref>, which has averaged (medium) around 3% per year in the last 20 years (2001 to 2022)<ref>https://www.macrotrends.net/countries/WLD/world/gdp-growth-rate</ref>. | |Research shows that the growth rate of the global advertising market (i.e. the total addressable market) is similar to the growth rate of global gross domestic product<ref>http://www.robertpicard.net/files/econgrowthandadvertising.pdf</ref>, which has averaged (medium) around 3% per year in the last 20 years (2001 to 2022)<ref>https://www.macrotrends.net/countries/WLD/world/gdp-growth-rate</ref>. | ||
|- | |- | ||
|What's the estimated peak market share | |What's the estimated Stockhub peak market share? | ||
|2% | |2% | ||
|Research shows that there's an almost perfect positive correlation between the amount of adverting revenue generated on a platform and the total amount of time spent by users on the platform. In other words, the more time users spend on a platform, the more advertising revenue the platform generates. Accordingly, Stockhub believes that the best measurement unit of future advertising market share is time. In UK broadcasting, there's a limit on the amount of advertising that can be shown to viewers, and the limit is 15% of 24 hours (i.e. around 9 minutes per hour or around 216 minutes a day). Research suggests that Active Investors represent around 10.4% of the global population and that the average amount of time Active Investors spend researching investments is 30 minutes per day. Consequently, the Stockhub company estimates that the peak market share of its namesake platform is around 2%, and, therefore, suggests using the share amount here. | |Research shows that there's an almost perfect positive correlation between the amount of adverting revenue generated on a platform and the total amount of time spent by users on the platform. In other words, the more time users spend on a platform, the more advertising revenue the platform generates. Accordingly, Stockhub believes that the best measurement unit of future advertising market share is time. In UK broadcasting, there's a limit on the amount of advertising that can be shown to viewers, and the limit is 15% of 24 hours (i.e. around 9 minutes per hour or around 216 minutes a day). Research suggests that Active Investors represent around 10.4% of the global population and that the average amount of time Active Investors spend researching investments is 30 minutes per day. Consequently, the Stockhub company estimates that the peak market share of its namesake platform is around 2%, and, therefore, suggests using the share amount here. | ||
|- | |- | ||
|Which distribution function do you want to use to estimate | |Which distribution function do you want to use to estimate Stockhub revenue? | ||
|Gaussian | |Gaussian | ||
|Research suggests that the revenue pattern of companies is similar to the pattern produced by the Gaussian distribution function (i.e. the revenue distribution is bell shaped)<ref>http://escml.umd.edu/Papers/ObsCPMT.pdf</ref>, so Stockhub suggests using that function here. | |Research suggests that the revenue pattern of companies is similar to the pattern produced by the Gaussian distribution function (i.e. the revenue distribution is bell shaped)<ref>http://escml.umd.edu/Papers/ObsCPMT.pdf</ref>, so Stockhub suggests using that function here. | ||
|- | |- | ||
| What is the estimated lifespan | | What is the estimated Stockhub lifespan? | ||
|50 years | |50 years | ||
|Stockhub's vision is to be a large organisation (more than 10,000 employees), and research shows that the average lifespan of a large corporation is around 50 years.<ref>Stadler, Enduring Success, 3–5.</ref> | |Stockhub's vision is to be a large organisation (more than 10,000 employees), and research shows that the average lifespan of a large corporation is around 50 years.<ref>Stadler, Enduring Success, 3–5.</ref> | ||
|- | |- | ||
|What's the estimated standard deviation of | |What's the estimated standard deviation of Stockhub revenue? | ||
|5 years | |5 years | ||
|Another way of asking this question is this way: within how many years either side of the mean does 68% of revenue occur? The Stockhub company suggests using 5 years (i.e. 68% of all sales happen within 5 years either side of the mean year), so that's what's used here. | |Another way of asking this question is this way: within how many years either side of the mean does 68% of revenue occur? The Stockhub company suggests using 5 years (i.e. 68% of all sales happen within 5 years either side of the mean year), so that's what's used here. | ||
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| colspan="3" |'''<div style="text-align: center;">Growth stages</div>''' | | colspan="3" |'''<div style="text-align: center;">Growth stages</div>''' | ||
|- | |- | ||
|How many main stages of growth is | |How many main stages of growth is Stockhub expected to go through? | ||
|4 stages | |4 stages | ||
|Research suggests that a company typically goes through four distinct stages of cash flow growth.<ref>Levie J, Lichtenstein BB (2010) A terminal assessment of stages theory: Introducing a dynamic approach to entrepreneurship. Entrepreneurship: Theory & Practice 34(2): 317–350. <nowiki>https://doi.org/10.1111/j.1540-6520.2010.00377.x</nowiki></ref> Research also shows that incorporating those stages into the discounted cash flow model improves the quality of the model and, ultimately, the quality of the value estimation.<ref>Stef Hinfelaar et al.:, 2019.</ref> | |Research suggests that a company typically goes through four distinct stages of cash flow growth.<ref>Levie J, Lichtenstein BB (2010) A terminal assessment of stages theory: Introducing a dynamic approach to entrepreneurship. Entrepreneurship: Theory & Practice 34(2): 317–350. <nowiki>https://doi.org/10.1111/j.1540-6520.2010.00377.x</nowiki></ref> Research also shows that incorporating those stages into the discounted cash flow model improves the quality of the model and, ultimately, the quality of the value estimation.<ref>Stef Hinfelaar et al.:, 2019.</ref> | ||
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==Risks== | ==Risks== | ||
===Early-stage investment=== | ===Early-stage investment=== | ||
===Illiquid investment=== | ===Illiquid investment=== | ||
==Valuation== | ==Valuation== | ||
The Stockhub company estimates that the expected return of an investment in the company over the next five years is 55x. In other words, an £1,000 investment in the company is expected to return £55,000 in five years time. The assumptions used to estimate the return figure can be found in the table below. | The Stockhub company estimates that the expected return of an investment in the company over the next five years is 55x. In other words, an £1,000 investment in the company is expected to return £55,000 in five years time. The assumptions used to estimate the return figure can be found in the table below. | ||
Assuming that a suitable return level over five years is 10% per year and | Assuming that a suitable return level over five years is 10% per year and Stockhub achieves its expected return level (of 55x), then an investment in the Stockhub company is considered to be a 'suitable' one. | ||
For those in the UK: Stockhub is SEIS and EIS eligible, a key benefit of which is that those who invest now can claim back up to 50% of the investment amount in income tax relief. Accordingly, the estimated expected return of investing in the business is even higher for UK-citizens (than non-UK citizens). | |||
=== What are the assumptions used to estimate the return?=== | === What are the assumptions used to estimate the return?=== | ||
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==Actions== | ==Actions== | ||