rick siegel · Mon, 09/26/2011 - 20:03
Business
Business Overview:
• Company manufacturers and distributes reusable drycleaning garment bags
• The bags solve organizational issues for consumers -- no fighting with twist-ties, no paper or plastic waste, no worry about losing clothes between closet and drycleaner -- and drycleaners, who not only get to trumpet the environmental advantages, achieve significant savings by changing packaging system
Project Type:
Industry:
Project Website:
http://thegreengarmento.com What are your future milestones, and how much capital will you need to achieve each of the milestones outlined?:
Our next milestone, which provides the key to multi-millions in revenue, is to produce and distribute retail packaging for consumers call The Orgreenizer: Two Green Garmentos, a hamper frame, and a reusable Green Garmento shirt-box bag. We are looking for $2,000,000, which will be enough both to service the production and cashflow need for the retail component and allow the company to fully fund the marketing campaign and sales teams for the drycleaning, hospitality and promotional products trade.
What is your total and operating cash burn (the amount you're spending) per month? :
Currently our burn is averaging between $5,000 and $20,000 a month. However, we have not geared up for the larger production needed for retail sales, nor have we spent capital to advertise to the hospitality and promotional products industries.
How many future rounds of financing do you project? :
At this time it is uncertain whether more financing would be needed or whether the sales/revenue/production revenues would make it more economically attractive and feasible to fund future growth through banks and other related lenders.
Services Desired:
Accounting
Distribution/Sales
Manufacturer
Supply Chain/Distribution
Who is the Customer?:
Consumers, drycleaners, hoteliers, laundromats, promotional products distributors, fundraisers looking for green products...
What is the Customer Pain that you are solving?:
For many consumers, the ability to eliminate the paper and plastic waste of drycleaning is a solution to their biggest problem.
For consumers unconcerned with the environmental advantages of The Green Garmento, it is the product's organizational qualities -- insurance that all the clothes they want to get to the drycleaner actually gets there; the elimination of the fights with twist-ties, reaching for one shirt and getting six; no more closet floors filled with garbage -- that serves as the primary solution.
Names of any current or recent customers:
We are the official reusable drycleaning garment bag of the country's largest drycleaning chain: MARTINIZING, and our bags are sold or otherwise offered at over 1000 U.S. drycleaners and in a dozen countries. We are sold through COSTCO.com and COSTCO.ca and dozens of on-line retailers, and we are being sold at the ROSS Stores and several specialty retailers.
What is the Target Market?:
Anyone who utilizes a drycleaner or laundromat (used as a laundry bag and then for hanger-hung shirts), and hotels/cruiselines/motels that utilize drycleaning and laundering.
How big is the Target Market in terms of Annual Sales?:
$10M-$100M
Sales/Marketing Strategy:
Education: informing not only consumers, drycleaners and other related industries of the assets of our products, but also to inform environmental lobbyists and legislators that there is an alternative to single-use plastic in drycleaning. The reason is simple: virtually no legislation currently being considered, of the hundreds of bills either passed or being considered, includes the taxation or prohibition of single-use drycleaning bags, because they don't know there is an alternative.
Provide use cases :
Drycleaners that have implemented the Green Garmento system have not only saved money, but created profit from where they had costs by either taking deposits or sold our bags. We are being implements by municipalities as part of their green initiatives.
Competition:
The Converta-Bag; sold by Cleaners' Supply. It is inferior in design, in material, sold for at a similar pricepoint. Their advantage is that all drycleaners receive the Cleaners' Supply catalogue. Ours is the proprietary advantage of our design -- we hope to have our patents granted within the next six months -- that 99% of those who have seen both products find ours far superior.
One-line Pitch:
The Green Garmento is changing the packaging system for drycleaning from single-use to reusable; creating a new $100,000,000 in the category, and through its proprietary, marketing and first-in-category advantage, set to dominate in market share as the category grows.
Business Model:
• We create the bags in China, distribute to drycleaners, hotels, promotional products companies and consumers
Product/Services Overview (what does it do):
The bag starts as a laundry bag to put soiled clothes; it morphs into a hands-free duffel bag to carry the clothes to the drycleaner, and is left there to become a hanging garment bag to protect the clothes, without need for plastic, paper or twist-ties, for the trip back from the drycleaner to home.
Technology
What makes the technology/business unique and have a defendable competitive advantage?:
We are awaiting granting patents on our putting handles, shoulder straps, a side zipper, and pouch to recycle hangers. When granted, it will cement a huge competitive advantage: carrying the bag as a hands-free duffle, being able to see all the cleaned clothes with the same transparency that they were delivered to the drycleaner, have an easy way to return the hangers without worry of the clothes catching against metal, and being able to loop the bag for use as a weekend travel bag. We would assume that potential competitors will need to license, if we so grant, our technology if they want to achieve significant market share. The only existing competitor, the Converta-Bag, has incorporated our shoulder-strap and zipper technology, and will either have to acquiesce to stop selling that bag or pay us to continue selling it.
Describe in detail the technology used in the Project - Address the innovation in significant detail :
Nothing that isn't past the confines of common sense, though none of it had ever been incorporated into a drycleaning bag: putting a shoulder strap the length of the back of the bag, putting handles at the top and bottom of the bag, and though not protectable by patent, create the bag with polypropylene. Polypropylene has three excellent qualities: it is breathable, which makes it better for storage and for use in the sun and heat; it is water-resistant, making the bag a better alternative than other options for rain, sleet or snow; and it is inexpensive, which is why drycleaners who make the change see a drastic improvement on their bottom line.
What are the principles of the technology? :
See above.
What, if anything, has been proven (and how far is this from a commercial scale)? :
It has all been proven; we have been in the market since October 2008.
What challenges/risk does the technology face for commercialization?:
The challenge is to educate consumers about its availability; drycleaners need to be educated about its variety of advantages -- like others, they are slow to accept change.
Patent Numbers (Filed/Approved):
12/428,413
Team
| Name | Title |
|---|---|
| Jennie Nigrosh | President |
| Rick Siegel | CEO |
Current Investors:
Individuals have provided $830,000 in return for 30% annual simple interest return paid at 9% of gross revenue
Financials
Amount Sought:
$2,000,000 If raising funds, what shall the funds be used for?:
production costs/inventory; marketing to retail/consumer, hospitality, promotional products markets; sales team, publicity, lobbyists to educate legislators and municipalities about alternative to single-use plastic, infrastructure/equipment
Pre-Money Valuation:
$3,000,000
Funding Received to Date:
$900,000
Amount invested by Founders:
$400,000
Funding Stage:
Growth Funding History:
| Funding Round | Funding Type | Funding date | Funding Source/ Investors | Amount | Pre-Money valuation |
|---|---|---|---|---|---|
| Seed/Bootstrap | Equity | 2008-2011 | Rick Siegel/Jennie Nigrosh | 400,000 | 400,000 |
| Angel | Other | 2009-2011 | revenue based investors | 830,000 | 3,000,000 |
| Friends & Family | Asset-based | 2008-2009 | three friends | 85,000 |
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