Since we founded the company, investment was made from the founders. While our initial investment allowed us to get the company from concept to a minimum viable product and generate some revenue, it has consistently limited our ability to accelerate our growth. In fact, our company operates without any marketing or sales staff to promote our products since we have never been in a position to make key investments in those areas. We held off on outside fundraises until a product and market fit was well-defined for our technology.
In 2018, we were able to secure our first OEM contract and launched our first generation HMI into production. However, there is a sweet spot in pricing with our target customers and we believe meeting those prices will enable us to scale our business. In the beginning of 2019, we are expecting to launch our Intelligent HMI hardware with an initial release of Intelli-Gauge. Intelli-Gauge will be competitively priced against traditional analog instrumentation. This will enable us to expand more quickly to customers who are cost conscious of increasing their bill or materials with newer technology. To execute our new pricing capability and growth plan, we have decided to execute our first fund raising round of $106,999. If we reach this goal, and there seems to be interest, we are likely to increase our offering maximum amount to $1,070,000. If we are successful, we believe this will be enough capital to fully operate our business.
We intend to invest these funds in three ways:
- Execute aggressive marketing push in 2019 to raise awareness and with the goal to convert sales from larger OEM contracts
- Support volume manufacturing to scale our products
- Provide working capital to support sales growth
In 2015, we launched our first coordinated marketing campaign. This campaign was successful in raising awareness about the NEED for our product category. It also introduced our minimum viable product to early adopters and converted sales for the Company. We learned a lot from this marketing campaign and its effectiveness attracting our early customers, which helped define our business model for our products. We intend to budget up to $275,000 to build upon these marketing efforts throughout 2019 to drive continued growth. Specifically, we intend to expand upon the digital media efforts that produced the best results, make additional improvements to our website, and explore highly targeted trade-shows within our market segments.
We believe it is critical for us to offer the correct mass market price in order to replace antiquated instrumentation with our next generation displays. We intend to invest up to $250,000 to support achieving those price targets throughout 2018-2019. The allocation of this spending will focus on validating contract manufacturers who can scale our products and maintain our quality standards.
As we grow we will need to invest additional funds into working capital. Once we are able to access further bank financing, we will free up this cash by borrowing against our receivables and inventory and support our working capital needs through debt. We expect that transition to start at the beginning of 2019. Until then, we plan to allocate up to $475,000 from the proceeds from this fundraise towards our working capital.
Future Funding Requirements
We anticipate the growth of our company to require additional financing in the future. We do not intend to start another round of equity financing until we have secured more OEM contracts and reached our revenue goals. The next round of equity financing will enable us to build out our software services platform to generate recurring revenue from HMI displays already in use by our customers, and to accelerate the adoption of next generation instrumentation to improve safer driving for people.