1. What tips can you offer Brian Razzaque for creating a business plan that will attract the capital SocialToaster needs to fuel its growth?

2. What advice can you offer Razzaque about presenting his plan to potential lenders and investors?

3. Write a brief memo to Razzaque describing the advantages and disadvantages of using debt capital and equity capital.

4. Which sources of debt capital offer the greatest potential for SocialToaster's financing needs? In what order would you prioritize the sources you have listed (from greatest potential to least potential)?

5. Which sources of equity capital offer the greatest potential for SocialToaster's financing needs? In what order would you prioritize the sources you have listed (from greatest potential to least potential)?

6. What advice can you offer Razzaque about avoiding potential dangers and pitfalls in accepting outside financing for a business?

Case 8 SocialToaster Where should the Founder of a Social Media Marketing Company Turn for Financing to Fuel His Fast-Growing Business? A. Web developer, Brian Razzaque recognised the power hacer el concerned the intender in new potential incelis to constantly upgrade and improve the product and enhance its features, Razzaque has called on several wealthy individuals in New York City, Boston, and Silicon Valley. None were will ing to invest in Social Toaster, but they did offer Rarque helpful feedback that enabled him to improve his pitch. He and efficiency of social media marketing and wanted to make social media marketing easier for companies but wasn't sure panies. Rarraque says investors in Silicon Valley were not in Silicon Valley and on the East Coast view start-up com exactly how to achieve his goal. Then an employee asked to be notified every time Razzaque made a post to the company impressed by Social Toaster's existing (but modest) revenue blog so that he could then share the post with his social net- stream. Instead, they were looking at the company's growth work. Razzaque realized that every company has super fans, rate as an indicator of market potential. Does the company customers with a strong affinity for a company and its brand, have the potential to become a billion dollar business? East who will readily share content about the company if it is easy pany's fundamentals, its revenue stream as proof that the Coast investors, however, were more interested in the com and convenient to do so. That realization was the beginning product is viable, its "burn rate" how quickly the company's of Razzaque's company, Baltimore-based Social Toaster, a platform that sends simple e-mails notifying super fans of soundness of its business model, and its staying power monthly expenditures were burning through its capital the new content, such as blog posts, articles, events, promotions, and awards, that fans can, in turn, share with members of Questions their own social networks with just one click. Social Toaster 1. What tips can you offer Brian Razzaque for creating a magnifies a company's social media efforts many times over, business plan that will attract the capital Social Toaster drives traffic to its Web site, enhances customer engagement needs to fuel its growth? and improves brand recognition and loyalty at minimal cost. 2. What advice can you offer Razzaque about presenting In essence, Social Toaster allows a company's super fans to his plan to potential lenders and investors? increase exponentially the visibility of the content that the 3. Write a brief memo to Razzaque describing the company creates through the fans' social networks. Razzaque advantages and disadvantages of using debt capital says promoting a business through a company's super fans and equity capital using Social Toaster is as easy as making toast. 4. Which sources of debt capital offer the greatest poten: Razzaque began promoting Social Toaster's power and tial for SocialToaster's financing needs? In what order began landing clients around Baltimore. As success stories would you prioritize the sources you have listed (from began to spread, Social Toaster landed bigger clients, includ greatest potential to least potential). ing the Baltimore Ravens, the Baltimore Symphony Orches 5. Which sources of equity capital offer the greatest tra, the Detroit Lions, Lifetime Network, A&E, VHI. Sony potential for Social Toaster's financing needs? In what Pictures, Universal Music, Johns Hopkins University, and order would you prioritize the sources you have listed many others. Clients report that their fans share 60 to 74 per (from greatest potential to least potential)? cent of the content they promote, providing exposure that 6. What advice can you offer Razzaque about avoid- is almost impossible for companies to achieve through their ing potential dangers and pitfalls in accepting outside own social media accounts alone. In its first year of opera financing for a business? tions, Social Toaster generated $300,000 in sales, an amount that more than doubled to $800,000 in its second year. Based on Kars Ohnen Social Toaster Lands Some Bread Razzaque is at an important crossroads in the life of his Eary 2013. 68: Social Toster Closes Series Fuad in the son of 1975ML" Celow. Je company. He needs financing to fuel its rapid growth, but he 2012. apbalmor.cibulist.com/articlehociate closesti 1975 Sarah Gants Social Toaster Nears Another wants to ensure that he selects the right sources of financing. SIM i Funding. Target Up to SM More Business He estimates that he will need $500,000 as bridge financ- August 23, 2013. httpwww.journal.com.bostowning ing to fuel the company's short-term growth. That financing 2010 asterissim. targets-up hem allScott Dunce How Get Surted with Brian Ramque Balmere Business will give him time to raise the $2 million he will need to AS. 2011, www.burmals.com baltimore printed increase the size of Social Toaster's sales force, hire account 2011100/1 Show get started with brian-rahall managers, increase the company's marketing efforts across the globe to land more clients, and hire more technical staff 686 Case 8 SocialToaster Where should the Founder of a Social Media Marketing Company Turn for Financing to Fuel His Fast-Growing Business? A. Web developer, Brian Razzaque recognised the power hacer el concerned the intender in new potential incelis to constantly upgrade and improve the product and enhance its features, Razzaque has called on several wealthy individuals in New York City, Boston, and Silicon Valley. None were will ing to invest in Social Toaster, but they did offer Rarque helpful feedback that enabled him to improve his pitch. He and efficiency of social media marketing and wanted to make social media marketing easier for companies but wasn't sure panies. Rarraque says investors in Silicon Valley were not in Silicon Valley and on the East Coast view start-up com exactly how to achieve his goal. Then an employee asked to be notified every time Razzaque made a post to the company impressed by Social Toaster's existing (but modest) revenue blog so that he could then share the post with his social net- stream. Instead, they were looking at the company's growth work. Razzaque realized that every company has super fans, rate as an indicator of market potential. Does the company customers with a strong affinity for a company and its brand, have the potential to become a billion dollar business? East who will readily share content about the company if it is easy pany's fundamentals, its revenue stream as proof that the Coast investors, however, were more interested in the com and convenient to do so. That realization was the beginning product is viable, its "burn rate" how quickly the company's of Razzaque's company, Baltimore-based Social Toaster, a platform that sends simple e-mails notifying super fans of soundness of its business model, and its staying power monthly expenditures were burning through its capital the new content, such as blog posts, articles, events, promotions, and awards, that fans can, in turn, share with members of Questions their own social networks with just one click. Social Toaster 1. What tips can you offer Brian Razzaque for creating a magnifies a company's social media efforts many times over, business plan that will attract the capital Social Toaster drives traffic to its Web site, enhances customer engagement needs to fuel its growth? and improves brand recognition and loyalty at minimal cost. 2. What advice can you offer Razzaque about presenting In essence, Social Toaster allows a company's super fans to his plan to potential lenders and investors? increase exponentially the visibility of the content that the 3. Write a brief memo to Razzaque describing the company creates through the fans' social networks. Razzaque advantages and disadvantages of using debt capital says promoting a business through a company's super fans and equity capital using Social Toaster is as easy as making toast. 4. Which sources of debt capital offer the greatest poten: Razzaque began promoting Social Toaster's power and tial for SocialToaster's financing needs? In what order began landing clients around Baltimore. As success stories would you prioritize the sources you have listed (from began to spread, Social Toaster landed bigger clients, includ greatest potential to least potential). ing the Baltimore Ravens, the Baltimore Symphony Orches 5. Which sources of equity capital offer the greatest tra, the Detroit Lions, Lifetime Network, A&E, VHI. Sony potential for Social Toaster's financing needs? In what Pictures, Universal Music, Johns Hopkins University, and order would you prioritize the sources you have listed many others. Clients report that their fans share 60 to 74 per (from greatest potential to least potential)? cent of the content they promote, providing exposure that 6. What advice can you offer Razzaque about avoid- is almost impossible for companies to achieve through their ing potential dangers and pitfalls in accepting outside own social media accounts alone. In its first year of opera financing for a business? tions, Social Toaster generated $300,000 in sales, an amount that more than doubled to $800,000 in its second year. Based on Kars Ohnen Social Toaster Lands Some Bread Razzaque is at an important crossroads in the life of his Eary 2013. 68: Social Toster Closes Series Fuad in the son of 1975ML" Celow. Je company. He needs financing to fuel its rapid growth, but he 2012. apbalmor.cibulist.com/articlehociate closesti 1975 Sarah Gants Social Toaster Nears Another wants to ensure that he selects the right sources of financing. SIM i Funding. Target Up to SM More Business He estimates that he will need $500,000 as bridge financ- August 23, 2013. httpwww.journal.com.bostowning ing to fuel the company's short-term growth. That financing 2010 asterissim. targets-up hem allScott Dunce How Get Surted with Brian Ramque Balmere Business will give him time to raise the $2 million he will need to AS. 2011, www.burmals.com baltimore printed increase the size of Social Toaster's sales force, hire account 2011100/1 Show get started with brian-rahall managers, increase the company's marketing efforts across the globe to land more clients, and hire more technical staff 686