0% found this document useful (0 votes)

4 views

Case 2 Notes

Devium LLC, founded by Paul Lizer, is developing a premium audio system called Dash that combines GPS and car stereo features, targeting a market of 20 million potential customers. The company is exploring various manufacturing, marketing, and financing options, including crowdfunding to raise capital while minimizing equity dilution. Key strategies include selling through high-end retailers, participating in trade shows, and leveraging PR campaigns to generate product awareness.

Uploaded by

salandansophia

We take content rights seriously. If you suspect this is your content, claim it here.

Available Formats

Download as DOCX, PDF, TXT or read online on Scribd

0% found this document useful (0 votes)

4 views

Case 2 Notes

Uploaded by

salandansophia

We take content rights seriously. If you suspect this is your content, claim it here.

Available Formats

Download as DOCX, PDF, TXT or read online on Scribd

You are on page 1/ 3

Devium’s Dash

Paul Lizer - founder of Devium LLC

Developing Dash
- Combine GPS and car stereo
- Main components: faceplate, housing and electrical components

Market for premium audio systems

- 20 million estimated potential customers
- Global sales of premium audio system may reach 7.9M units ($7.3B)
- High-end brands: Bose, Harman/Kardon
- Major advantage: more aesthetically pleasing, phone is mounted conveniently, automatic
charging of phone

Manufacturing Options:
- Faceplate - Plastic injection molding and folded sheet metal
- Housing – worked with Alibaba
- Defect rate 10%
- Lizer was direct contact for manufacturing & had lots of responsibilities
o Considered hiring a procurement firm to manage the manufacturing process
(consulting fee is $5k-10k)

Marketing Options:
- Competitors are mid to high-end systems
- Selling price: $300
- Options for marketing:
o If he sells through retailers: target is high end electronic stores (planned to hire
commissioned sales agents)
o Other option: present to annual products trade show (cost is 8k)
o DTC but time consuming
o Invest 5k for a four-month PR campaign, hiring an electronics-focused pr agency
o Purchase ads on tech review sites

Financing Options:
- Estimate is $25k - $50k to finance the venture
- Options:
o Solicit equity investments for 500-1k (already had Andy Jones who invested 3k)
o Raise debt by selling 500-1000 tranches of notes to investors, promising an
interest rate between 5-10%
o Approach angel investors (estimated that Devium can be worth 850k)
o Crowdfunding
 Donation
 Entry-level category
 Special-edition category
 Packaged category
How will you raise capital?

Crowdfunding
- Crowdfunding will allow Lizer to raise funds from a large pool of investors without
giving up its equity. It also provides an opportunity to gauge the market demand for Dash
before the company starts its full-scale production. Additionally, this strategy can
generate publicity and product awareness, helping to attract potential customers.
However, a crucial drawback of this initiative is the risk of not matching or exceeding the
threshold pledge for fundraising
Lecture Notes (2/7)

First sources of capital

 Self / personal loans
o Majority of new business are financed by second mortgage on the house
 Friends and family
 Crowdsourcing / angel seed
o Can validate the market
 Venture Capital
 Late Venture Capital
 IPO
 Debt markets

Bank loan can be anywhere as long as you have assets to back up the loan against

Manufacturing
Distribution
Sales / marketing