1. Looking at the Coupa sales model in Exhibit 3, how would you evaluate the existing business plan? What is an "ideal" or optimal growth rate for the company? What kind of additional hiring would be required to increase the 2014 over 2013 growth rate to 80%? Why is tis a good or bad idea?
2. Other than growth rate, What metrics would you look at to understand/evaluate the health/robustness of Coupa's underlying business?
3. What would you pay to sign up $1 million of ACV?
4. How would you weigh the advantages and disadvantages of organic growth through hiring vs. the acquisition of similar, smaller businesses?
Exhibit 3 (continued) Sales Rep, Revenue and Expense Model Build-up of Reps - #s and Cost (shaded cells represent key inputs to sales and revenue model) Asem 2011 Assumption 2014 Actual 2012 Actual 203012 Actual NOMI2 Antal 402012 P 08013 Phan 202014 Plan 2014 102013 XO 2013 2014 102014 24 Number of Nept.by type Rampedep beg pred and who de Rep 30s spe when the Talep end of 111 67 149 07 SM 91 15 110 06 26 13 143 07 11 149 155 0.5 26 12.3 193 09 13 197 19.7 10 10 26 726 11 19 65 143 155 24 155 $0 150 10 10 Upening of per Niebied the pened pedepeche pols who 30 40 07 13 19% 10 60 20 14 26 40 3 00 3 60 00 190 LO 35 SO 60 14 26 500 0.7 13 8 100 6.0 18 33 110 11.0 100 21 19 150 21 39 10 200 110 35 65 210 30 so 200 Cost of Report Sales Cos 1393 0.000 15.00 1979 150.000 SAM 25000 GOO Castanede Costumes Onene when Total secol po 18.000 **000 LIPO 210.000 110,000 LADES 1291.275 140,000 110,000 1542 MOS 110,000 2.06.27 153,711 175.000 000 1.736,711 4ST 145 30.000 1467457 2000 es 3.2016 TS 5,000 4. 225.000 19 22 4 1 Tulipe MY and Repen Anme ACV pepo 160.000 10000 20.000 140.000 42010 04 42 TO 3. Bofy Reve Methancit ACV tai O lampada de ACM) Us 3195 1.1 J. 12 7,127 1 TL 2013 1GUNS 40TM 55 3.790, 7993 UNA SUS NAM L) 10.15 04 LON 305,448 619 145 5. 127 . 44,99 4220 finding the nga Source: Company Summary Income Statement Forecasts based on Assumptions in Model (Note: These are the annual totals derived from the detailed monthly forecasts that appear on the following page.) Assumption 2013 Assumption 2014 Total 2013 Total 2014 Total Revenue 21.289 OR 35,111,655 54% 62% 11,496,105 21.769,226 Gross Margin Gross Margin - Total Total R&D Sales - Rep Driven Sales - Fixed Total Sales Total Marketing Total G&A Total Alliances 4.800.000 8.412.543 5,120,000 13.532,343 3.498,000 5.050.000 15210.958 5.640,000 15.210.958 4,050,000 4,750.000 2,750,000 3.890,000 2.356.000 Total Operating Expenses 28.076 543 37.450,958 Net Income (16.580.439) (15.681.731) Source: Company *Alliances include costs associated with training and incenting partners who implement Coupa's product eg, Deloitte, Exhibit 3 (continued) Sales Rep, Revenue and Expense Model Build-up of Reps - #s and Cost (shaded cells represent key inputs to sales and revenue model) Asem 2011 Assumption 2014 Actual 2012 Actual 203012 Actual NOMI2 Antal 402012 P 08013 Phan 202014 Plan 2014 102013 XO 2013 2014 102014 24 Number of Nept.by type Rampedep beg pred and who de Rep 30s spe when the Talep end of 111 67 149 07 SM 91 15 110 06 26 13 143 07 11 149 155 0.5 26 12.3 193 09 13 197 19.7 10 10 26 726 11 19 65 143 155 24 155 $0 150 10 10 Upening of per Niebied the pened pedepeche pols who 30 40 07 13 19% 10 60 20 14 26 40 3 00 3 60 00 190 LO 35 SO 60 14 26 500 0.7 13 8 100 6.0 18 33 110 11.0 100 21 19 150 21 39 10 200 110 35 65 210 30 so 200 Cost of Report Sales Cos 1393 0.000 15.00 1979 150.000 SAM 25000 GOO Castanede Costumes Onene when Total secol po 18.000 **000 LIPO 210.000 110,000 LADES 1291.275 140,000 110,000 1542 MOS 110,000 2.06.27 153,711 175.000 000 1.736,711 4ST 145 30.000 1467457 2000 es 3.2016 TS 5,000 4. 225.000 19 22 4 1 Tulipe MY and Repen Anme ACV pepo 160.000 10000 20.000 140.000 42010 04 42 TO 3. Bofy Reve Methancit ACV tai O lampada de ACM) Us 3195 1.1 J. 12 7,127 1 TL 2013 1GUNS 40TM 55 3.790, 7993 UNA SUS NAM L) 10.15 04 LON 305,448 619 145 5. 127 . 44,99 4220 finding the nga Source: Company Summary Income Statement Forecasts based on Assumptions in Model (Note: These are the annual totals derived from the detailed monthly forecasts that appear on the following page.) Assumption 2013 Assumption 2014 Total 2013 Total 2014 Total Revenue 21.289 OR 35,111,655 54% 62% 11,496,105 21.769,226 Gross Margin Gross Margin - Total Total R&D Sales - Rep Driven Sales - Fixed Total Sales Total Marketing Total G&A Total Alliances 4.800.000 8.412.543 5,120,000 13.532,343 3.498,000 5.050.000 15210.958 5.640,000 15.210.958 4,050,000 4,750.000 2,750,000 3.890,000 2.356.000 Total Operating Expenses 28.076 543 37.450,958 Net Income (16.580.439) (15.681.731) Source: Company *Alliances include costs associated with training and incenting partners who implement Coupa's product eg, Deloitte
