EFTA01120660.pdf

Executive Summary Confidential April 2013 • • • • • • • • • • • • • •• • • •• • •• •• •• •• • • ••••• -•• • •• 0 • •••• • • • • • •,•••••:••:*• • • • • * ell, • • • • • • • • • A. •0 • • . ••• 0 0 .• • •• •• -••• • • • ••• •• •• • •• • ••• • • • • • • • •• •• • • • • • • • • • • •• • •! • •• • • ' 0• • •• •• •• •ell- •s t • ip: • • • • o• 0 • EFTA01120660 The World's Most Creative Scientists Solving the World's Most Challenging Problems EFTA01120661 Overview Seed is a first-of-its-kind scientific think tank/consultancy working with clients in the commercial, public, and social sectors on a wide range of complex human-scale problems. Like great mega-consultancies that came before it — IDEO, McKinsey, Monitor, etc. — Seed is founded on a recognition that the world is undergoing a fundamental transformation that requires a new way of thinking (Scientific Thinking TM), new approaches to problem-solving (e.g. Big Data), and new types of people solving these problems. What IDEO did with design (>$100 million revenue, 600 employee firm) — Seed aims to do with science. Seed combines science (e.g. complexity science, linguistics, neuroscience, physics, etc.) with design (e.g. data visualization, human-computer interaction, generative architecture, etc.) and technology (e.g. data processing, software and database engineering, etc.) to provide high-value/high-margin services to its clients. Seed does not solve typically scientific problems (e.g. drug discovery, new material development) — but complex human-scale problems that affect countries and companies (e.g. economic development, spread of misinformation, post-launch analysis, global policy planning). Like IDEO for designers, Seed will be home for the next generation of creative scientists and disruptive scientific thinkers. Seed will leverage its extensive network of relationships across the scientific community to forge "science transfer" (e.g. algorithms) licensing partnerships. Seed will form a formal network of academic researchers who consult on various client projects. And Seed will conduct and collaborate on basic research on the application of Scientific Thinking TM to human-scale problems. EFTA01120662 Overview Like IDEO or McKinsey, Seed generates revenue from contracts for services, among them: Research, Data Collection, Data Mapping, Systems Mapping, Analytics, Visualization, Foresight. Additionally, Seed retains rights to the intellectual property it generates during the course of services contracts and will commercialize this IP through spin-off products (e.g. software, architecture). Seed was founded and will be headed by Adam Bly, a pioneering scientific thought-leader (e.g. World Economic Forum Young Global Leader, Vice Chair, Global Agenda Council on Complexity, 6-time Davos speaker) and entrepreneur. A world-class team of scientists, designers, technologists, and business leaders has been identified and is starting to be assembled. Seed evolved out of the acclaimed, eponymous magazine published from 2001-2011. The magazine set the intellectual stage for this venture and provides invaluable goodwill and brand equity. Seed is currently operating as a unit of Seed Media Group LLC (other units include: ScienceBlogs — partnership with National Geographic; Visualizing — partnership with GE). Seed has generated revenues of approx. $2 million over its first 18 months from blue-chip clients such as: Johnson & Johnson, United Nations, GE, Pfizer, Government of Canada, The Coca-Cola Company, Nike, and Government of Qatar. Seed is seeking $5-10 million to buy-out the relevant assets from Seed Media Group LLC and to finance growth. Within five years, Seed aims to reach $50 million in annual turnover, employ 150 scientists, and become the defining scientific think tank/consultancy in the world. EFTA01120663 Opportunity Over the last century, transformational moments have given rise to transformational professional services companies, each with a distinct lens for seeing the world and solving its problems. Seed aims to seize this once-in-a-generation opportunity. Monitor (1983) Bell Labs (1925) Media Lab (1985) 21st Centu y *Kinsey (1926) GB (1987) Era of Complexity Information Age IDEO (1991) Genomic Age 7 Billion Sustainability MDGs Seed (2011) Cold War (1946-91) Roaring 20s Great Depression Dot Corn Bubble (1929-1940) (1995-2000) EFTA01120664 Science 4 Services Seed will always seek out new scientific approaches to solving complex human-scale problems — and will add to its service offerings and labs as new skills and solutions become market-ready. Science Current Future Math & Statistics Systems Biology Natural Language Processing Genetics Al/Machine Learning Evolutionary Biology Physics Neuroscience Network Science Cryptography Complex Systems Science Molecular Biology Human-Computer Interaction Computational Social Science Services/Labs Current Future Data Discovery Behavioral Economics Data Collection Health Economics Data Science Risk Analysis Data Visualization Urban Planning System Mapping Resilience Planning Research Policy Planning Master Class Scenario Planning Foresight Simulation EFTA01120665 Interfaces "I have noticed a growing conversation recently concerning the relationship between design and science. Adam Bly did much to get this conversation started." — Tim Brown, CEO, IDEO Seed employs modern design as a way of interfacing (both digitally and physically) with science and helping its clients do the same. Design Current Future Information Design Generative Architecture Data Visualization Game Design Human-Computer Interaction Critical Design ... Similarly, Seed makes use of technology to support and power its work and the tools it develops. Technology Current Future Software Engineering Database Engineering Data Processing Distributed Computing EFTA01120666 Representative Contracts Client: Government of Qatar Scope: Through the lens of complexity, compile and analyze global economic and social development indicators for novel relationships, develop a novel visual language to analyze and explore correlation values, and build a business intelligence tool to track indicators Timeframe Category: 4-6 months Size Category: $100,000-$200,000 Services: Research, Data Collection, Data Science (incl. Maximal Information-based Nonparametric Exploration), Data Visualization (incl. Force-Directed Algorithms and Network Science) Deliverable: Report and Software Client: GE Scope: Advise on the application of resilience science to GE's corporate strategy through a Master Class with leading resilience scientists Timeframe Category: 1-3 months Size Category: $50,000-$100,000 Services: Master Class Deliverable: Report Client: Johnson & Johnson Scope: Study J&J's over-the-counter product portfolio and develop an analytical framework and set of design tools to support an overarching package redesign aimed at reducing complexity for consumers Timeframe Category: 4-6 months Size Category: $100,000-$200,000 Services: Research, Data Science (incl. Shannon Entropy), Information Design Deliverable: Report and Software EFTA01120667 Representative Contracts Client: United Nations (UNDP) Scope: Conduct a global vote (MY World) to collect data that helps inform the deliberations of the Secretary General's High-Level Panel on the Post-2015 Millennium Development Goals Timeframe Category: 4-6 months Size Category: $200,000-$350,000 Services: Data Collection (incl. Database Engineering), Data Science (incl. Natural Language Processing, Elbow Method Clustering, Multivariate Analysis), Data Visualization (incl. real-time data dashboard) Deliverable: Reports and Software Client: Nike Scope: Consider the future of manufacturing (i.e. processes, materials, etc.) from a scientific point of view Timeframe Category: 1-3 months Size Category: $50,000-$100,000 Services: Research, Foresight Deliverable: Report Client: Nagra Kudelski Scope: Analyze terabytes of log file data to determine various normal rates and develop a tool to detect anomalies Timeframe Category: 4-6 months Size Category: $100,000-$200,000 Services: Data Science (incl. Anomaly Detection, Machine Learning), Data Visualization Deliverable: Software and Report EFTA01120668 Representative Contracts Client: The Coca-Cola Company Scope: Using beta software developed by Seed, map The Coca-Cola Company as a system of inter-connected and inter-dependent agents (stocks, flows, and variables) Timeframe Category: 1-3 months Size Category: $50,000-$100,000 Services: System Mapping Deliverable: System Map Client: Johnson & Johnson Scope: Employing network visualization, prototype a new way of seeing the J&J organization Timeframe Category: 1-3 months Size Category: $50,000-$100,000 Services: Data Visualization Deliverable: Software Client: Amway Scope: Study historical sales data and identify the most predictive post- launch indicators of success for a new product launch at various points in time Timeframe Category: 1-3 months Size Category: $50,000-$100,000 Services: Data Science (incl. Agglomerative Clustering) Deliverable: Report EFTA01120669 Current Deliverables Report • DAT SCIENCE REPORT Software System Map • • O • -- • -- 0— _ • .- •• - • • — — 0=- •rr - • r...4....-. 41.- ....- y-. Or- ..... • — • - o r_ •=. 0= EFTA01120670 Financials Projected Income Statement In millions of USD; For the years ending Dec 31 2013 2014 2015 2016 2017 Revenues 3.0 6.0 12.0 24.0 48.0 COS 1.4 2.7 5.4 10.8 21.6 Sales & Mktg 0.6 1.2 1.92 3.84 5.76 R&D 0.18 0.36 1.2 2.4 7.2 G&A 0.39 0.78 1.2 2.4 3.36 Op. Income 0.5 1.0 2.3 4.6 10.1 16% 16% 19% 19% 21% Use of Proceeds In millions of USD Purchase of certain assets from 3.0 Seed Media Group LLC (code, designs, trademarks, contracts, customer lists, employment agreements) Working capital 1.0 - 2.0 Growth capital 1.0 - 5.0 5.0 - 10.0 EFTA01120671 Benchmarks/Assumptions Benchmarks Founded in 1991, IDEO generated revenues of $40M in 1995, $72M in 2002, $90M in 2007, and $105M in 2011. It currently has 600+ employees. IDEO's main competitor, frog, generated revenues of $35M in 2005 and $120M in 2009. It currently has 1,000+ employees. As the leading management consulting firm, McKinsey generated revenues of $7B in 2011 and had 17,000 employees. Professional services firm earn gross margins between 50-70% and net operating margins between 7-23%. Billable employees range between 70-80% with revenues per billable employee between $0.18-0.25M. To date, Seed has earned a gross margin of 51%. Assumptions Used • Gross Margin 55% • Net Operating Margin 16-21% • Sales/Mktg as % of revenues 12-20% • G&A as % of revenues 7-13% • R&D as % of revenues 6-15% • Billable employees 75-80% • Revenue/billable employee $0.20-0.25M Model based on "time and materials" EFTA01120672