Executive Summary

May 2015

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Cloud Mustang Executive Summary

Company Overview
Cloud Mustang is an ecommerce enterprise resource planning (ERP) integrated
solution that helps retail operations accelerate selling product across multiple
online retail channels and in new markets. Cloud Mustang was founded by industry
veterans, Adam Shepherd and Grady Johnston in May 2015 and is registered as a S
Corp in Delaware. Cloud Mustang will operate from an office based in Dawsonville
GA.
Cloud Mustangs founders are seeking $10 million to fund operations for the next
five years. Cloud Mustang will be profitable by the end of Year 1 and will experience
a consistent increase in sales in the first several years of operations in-line with
ramping up marketing and sales efforts.
With a hard launch scheduled for June 1st 2015, Cloud Mustang will have three main
focuses:
Cloud Mustang will help manufacturers (large or small) to list and sell their
products on multiple channels and provide management of the entire sales
process including fulfillment, inventory management, and customer service
from a single dashboard and a cloud-based service.
Cloud Mustang will integrate with eBay, Amazon, and other e-tailers to
seamlessly process orders automatically and provide data analysis to help
customers better understand their marketplace and provide suggestions to
customers on how to better position their products.
Cloud Mustang will facilitate international sales through integration with key
ecommerce sites in the US, European Union, China, and Latin America.
Through partnerships with entities such as Alibaba.com or Amazon.uk,
obstacles associated with international ecommerce transactions will be
overcome with Cloud Mustangs ERP solution.

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Keys to Success
Cloud Mustang has identified four keys to success that are instrumental in the
growth and the sustainability of the business. The first is the ability to identify ideal
customers and acquire customers at a steadily decreasing customer acquisition cost.
The second key to success is obtaining $10 million in capital investment in the
upcoming 12 months. The third key is to exploit and expand multiple existing
revenue streams. The final key to success is staying ahead of industry needs by
continuing to refine current ERP solutions and developing new turnkey solutions for
retail vendors before they become a mainstream market need.

Industry Analysis
Ecommerce is a growing industry. According to the U.S. Commerce Department, U.S.
online retail sales during 2011 totaled roughly $194 billion. By 2013 this figure had
increased to $262 billion, an increase of 13.4% over the prior year. In early 2014,
Jeff Jordan of Andreesen Horowitz wrote a widely quoted post that examined the
rapidly changing retail landscape. His takeaway was simple: Were in the midst of
a profound structural shift from physical to digital retail.
The ecommerce market is growing, and its growing fast. In 2013, the growth of
ecommerce significantly outpaced brick-and-mortar both domestically and
worldwide. 2014 kept up this pace of growth, and according to recent projections
from eMarketer, this trend is going to continue in the coming years:

Worldwide total retail will continue to grow between 5 6% through 2018.

Worldwide ecommerce will grow at a rate between 13 25%.
U.S. total retail will grow at a rate around 5.5%.
U.S. ecommerce will grow at a rate between 11-16.5%

Competitive Analysis
Cloud Mustang has two main competitors, ChannelAdviser and NetSuite.
ChannelAdvisor is an ecommerce company that provides cloud-based ecommerce
software solutions and publishes ecommerce sales data. While their ecommerce
sales data is popular, ChannelAdviser is an indirect competitor because their focus is
on creating websites and only partial integration into e-retail channels but not
providing a complete ERP solution.
NetSuite provides a group of software services used to manage a businesss
operations and customer relations including a cloud-based ERP solution. Their
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focus is not on providing integrated solutions and their website (a main entry point
for potential customers) lacks user-friendliness and an intuitive presentation of
services.

Competitive Advantage
Cloud Mustangs competitive advantage is two-fold. Through an exclusive
partnership with Amazon and other e-retailers, Cloud Mustang can ship customer
products in a variety of regions and these partnerships overcome the hurdles
associated with cross-border selling and order fulfillment.
As there has been explosive growth in ecommerce in the last five years, and
sustainable growth in the future, manufacturers are having a difficult time managing
many components of their online distribution including managing pricing and
pricing competition between their online channels and in-store retail partners.
Major retailers such as Target and Sears have been more aggressive with
manufacturers about pricing they see online.
The industry standard for managing pricing is through Minimum Advertised Price
(MAP) where online distributers of a manufacturers products cannot sell below the
MAP price. Third-party distributers often dont follow MAP and only comply when
they get caught by manufacturers and it can be a challenge for manufacturers to
constantly monitor MAP across all third-party distributors globally. Cloud Mustang
removes the need for third-party retailers who had previously gained online
distribution locally and globally for manufacturers. Cloud Mustang provides an
opportunity for manufacturers to go straight to market and sell directly to the
end-users of their product, allowing for greater controls (pricing, inventory, etc.)
and much better margins on ecommerce sales.
Cloud Mustangs other key strengths include:
1) Cloud Mustang can list products on many channels, access more customers,
and maximize sales quickly. Everything required to manage all channels is
provided in one simple solution. Partner channels integrated into our
solution include Amazon, eBay, NewEgg, etc.
2) Cloud Mustang aids in achieving a higher ROI through better order accuracy,
on time shipping, manageable just-in-time inventory forecasting, and
decreased warehouse labor costs.
3) Cloud Mustang provides advanced analytics including sales, purchasing, and
vendor data.

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The Management Team

Those who are involved with the company ensure Cloud Mustangs likelihood of
sustainable success. Adam Shepherd will act as CEO/President of the company and
Grady Johnston will serve as Cloud Mustangs Executive Vice President of Business
Development. Mr. Shepherd has over 10 years of experience within ecommerce
retail. As CEO of Sheer Imagination, Mr. Shepherd led the online retailer to more
than $20 million in sales through 7,500 SKUs and is one of the top 10 retailers on
Amazon. As a software architect, Mr. Shepherd designed and led the development of
a web-based ERP system, including purchasing, warehousing, accounts payable and
web analytics in order to effectively scale the company to meet rapid company
growth.
Mr. Shepherd has won several awards including Masters of Innovation from
Featherbone Communiversity and SBDC Small Business Person of the Year.
Throughout the course of his career, Mr. Shepherd has played a pivotal role in the
development of technology to assist with on-going company needs. As a business
owner he understands complex business environments and has created key
partnerships to accelerate operations.
Adam is a graduate of the University of Tampa with a Computer Information
Systems degree.
Mr. Johnston has over 20 years of experience within the technology and security
industry. As Vice President of Technical Operations and Security for LakePoint
Sports Development Group, Mr. Johnston leads the technology and security teams
through every stage of planning, development, vendor selection, deployment, and
control of in-park technology. He also leads operational functions of various
LakePoint services including ecommerce, fiber, security compliance, data center
operations, broadcast operations, hardware architecture, ERP operational
management, and tenant services.
Throughout his career, Mr. Johnston has played a pivotal role in companies at the
forefront of their industries, including Art Technology Group, Tiburon Enterprises,
SDG Corporation, and CDW. While developing new companies, Mr. Johnston has
led executive, technical, marketing, and partner alliance groups and teams and has
developed strategic business plans. These companies he has worked with
eventually sold for in excess of $1.3 billion.
Mr. Johnston is a graduate of Harvard University and University of Massachusetts.
He has served as a non-commissioned officer in the United States Marine Corps,
serving in various security and technology-related roles with a career spanning
two decades and four continents.

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The complementary skill sets of Mr. Shepherd and Mr. Johnston, in addition to the
expertise, leadership and guidance from Cloud Mustangs relationships with
industry leaders, will promote informed decision-making, proactive strategy
adjustments and innovative new turnkey solutions for the company.

Financials
Cloud Mustang has conservatively forecasted revenues of $8,295,000 in Year 1,
$19,372,500 in Year 2 and $27,247,500 in Year 3. Cloud Mustang is destined to
succeed due to excellent, in-demand ecommerce ERP solutions, seasoned
leadership, and the insight to recognize how to capitalize on a great upward
trending market opportunity.
The following chart highlights the revenue, gross margin, and net profit for Years 1,
2, and 3.
Figure: Revenue, Gross Margin, and Net Profit Year 1 to 3

The following chart illustrates Cloud Mustangs Profit and Loss statement for Year 1
to 3.

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Figure: Profit/Loss Statement for Year 1 to 3

Year 1
Revenue
Cost of Sales (commission fees)

Year 2

Year 3

$8,295,000

$19,372,500

$27,247,500

$819,000

$2,905,875

$4,087,125

$7,476,000
90.13%

$16,466,625
85.00%

$23,160,375
85.00%

$1,200,000
$300,000
$75,000
$75,000
$150,000
$900,000
$4,740,000

$1,800,000
$600,000
$195,000
$105,000
$200,000
$6,000,000
$5,465,000

$3,000,000
$900,000
$600,000
$105,000
$200,000
$6,000,000
$7,100,000

$7,440,000

$14,365,000

$17,905,000

Profit Before Interest & Taxes

Taxes (30%)

$36,000

$2,101,625
$630,488

$5,255,375
$1,576,613

Net Profit or Loss

Net Profit/Sales

$36,000
0.43%

$1,471,138
7.59%

$3,678,763
13.50%

Gross Margin
Gross Margin Percentage
Expenses
Marketing Budget
Travel and Entertainment
Rent
Administrative Costs
Server
Loan Payback
Personnel Costs

Total Operating Expenses

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