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Hopscotch Mobile App *Investor's Guide*

About Us

Hopscotch is a social life driven app that focuses on providing a dual platform for nightclubs and bars. The platform acts as an unmatched marketing tool when it comes to club managers and a source of convenience when it comes to club goers. Hopscotch will act as a bridge between club goers and club managers byway of it's niche specific platform that encourages brand loyalty, targeted marketing efforts, convenience, revenue generation and much more.

Our Mission

Our mission is to create an unparalleled mobile app experience that revolutionizes the way entertainment venues market themselves to potential consumers. We plan to utilize the current internet usage trends and emergence of social media as a way to effectively target potential consumers via Hopscotch. Hopscotch plans on becoming a mainstay in the entertainment sector through not only it's platform, but through it's brand related efforts. We understand the power of building a "community" and we will focus our efforts on doing exactly that.

Market Summary

Mobile applications have created huge revenue generation possibilities. In 2017 alone there was nearly $29 Billion produced from mobile app downloads and $37 Billion produced from in-app purchases. Statistics also show that nearly 70% of internet traffic comes byway of mobile devices and this statistic is even more pronounced when you speak of the Hopscotch "target market" of 18-29 year olds who's mobile related internet usage has crossed the 80% marker.

Beyond mobile application statistics lies the Nightclub and Bar industry numbers which are just as impressive. For the past three years the industry as seen an average of $24 Billion dollars of revenue each year here in the US. There are over 63,000 Bars and Nightclubs in the US with many more sprouting up each year. The statistics associated with mobile applications and nightclubs in general are true indicators of the revenue potential of an app such as Hopscotch. Currently there are mobile applications that seek to accomplish some aspects of what Hopscotch is looking to display through it's platform but many of those have glaring weaknesses and lack features that can truly be monetized in an optimal fashion.

Monetization Possibilities

At the core of Hopscotch is "marketing". Hopscotch represents the shift in consumer behavior, online activity and platform specific targeting when it comes to effective marketing. Platforms such as Uber and AirBnB have truly shown the power of "platform" oriented mobile applications and websites. Hopscotch seeks to monetize various aspects of the mobile app as mentioned below.

Reoccurring revenue byway of Club Manager monthly subscriptions

As previously mentioned Hopscotch is a platform that benefits two market segment, one being club goers and the other being club managers. Club managers pay a monthly fee to be listed on the Hopscotch platform. Their monthly membership contributes to Hopscotch's overall marketing budget and app revenue. The more clubs and bars listed on the app the higher the reoccurring revenue.

Ad Revenue Generation byway of banner ad placement within the app

Taking a note from social media and app platforms such as Facebook, Instagram and Twitter, Hopscotch understands the potential of Ad Revenue generation. Facebook ad revenue will cross $23 Billion this year with no signs of slowing down. Hopscotch will focus on building it's user base through it's own marketing and branding efforts. The more users Hopscotch has the higher the ad revenue potential and the perceived value of the app as a whole. Hopscotch's platform will provide a home screen that allows users to search for clubs and bars. The search portion of the Hopscotch app will be open to both "confirmed" users with Hopscotch accounts and those who are simply interested in browsing the app. Banner ads will appear on the search screen along with the club and bar listings. Ads will also be able to be placed directly on the club profile of popular club venues in a ad share manner.

User Data Collection

One of the most important parts of Hopscotch's revenue generation process is data collection. Data collection byway of user's interaction with the app itself, user reviews/feedback and optional surveys will be the driving force behind data collection and Hopscotch being able to successfully monetize that data.

Branded and Sponsored Events

We plan on truly building a community and with that following comes brand recognition. Hopscotch will leverage brand loyalty through the hosting of branded events along with sponsors in an effort to not only further the name of Hopscotch but also further the profit potential of the app itself.

Transaction Fees

When users book entry into a venue using the Hopscotch app there is a portion of those funds that goes to Hopscotch in the form of a proposed transaction fee. We will use a third party payment processor to handle the payment transactions on behalf of Hopscotch without the overhead of creating such a system.

Cost Summary

Mobile App Development & Maintenance

We’re looking at an initial cost and year maintenance of around $165,000. Hopscotch will roll out the lowest cost features with the quickest turnaround first and then move to more expensive features as the company revenue grows.

Marketing & Branding

Hopscotch will budget for a total of $150,000 for a rollout marketing & Branding Campaign using both digital, event and guerilla marketing efforts to capture new users on both the club manager and club goer side.

Sales Commision

Estimated $50,000 in Sales Commission Expenses. Hopscotch will create a commission only pay structure that incentivizes revenue growth.

General Business Expenses

Hopscotch will budget approximately $35,000 for general business expenses including laptops, iPads, insurance, Uniforms, phones, Internet, office supplies, printer/scanner etc.

Taxation

We expect to spend around $100,000 for taxation purposes based on corporate tax rates, local sales tax estimations and accounting costs.

Investment Options

Convertible Promissory Note

One option for investors are convertible promissory notes. Convertible notes are an ideal way for investors to get the chance to truly vet a business prior to becoming an equity stake holder. For instance, an investor could invest let’s say $300K and that investment could be attached to a promissory note with specifications as to interest on the funds, payment due dates and length of time of the proposed “loan”. After the specified time had passed and interest had acrued the investor would have two options. Option #1 would simply involve the investor collecting their principal balance back along with the acrued interest. The aforementioned option would take some of the investment risk of being a stake holder out of the equation. Option #2 would work similarly, but instead of the investor cashing in on their interest and principal balance the investor could convert their funds into equity or stake in the company itself based on the market value of the company at that time. Both options give an investor the opportunity to see Hopscotch in action and decide if they truly want to be in on the long haul or if they simply would like to turn a potential profit on their vested funds.

Umbrella Equity

This form of equity could be used as a stand alone option or in conjunction with the convertible promissory note. Equity would decrease over time as the company grew with an agreed upon equity number being the end goal. For instance, equity during year one could be 10%, year two 8% and year three 6%, with the 6% being the end number over the lifespan of Hopscotch. (These numbers are just for illustration purposes).

Flat Equity Ownership

This option is the most widely used in the industry and simply relates to an investment being made and an agreed up equity percentage being established on the front end that is locked in. For instance, an investor could invest $300K and be given 20% equity over the lifetime of the company no matter its growth in the future. (These numbers are just for illustration purposes).

Hopscotch Quick Start Plan

Brand Packaging

The initial steps of Hopscotch will focus on brand packaging byway of a branded website, social media profiles, promo items etc.

Sales Materials | PDF & Digital Pitch Decks

Hopscotch will also place a heavy emphasis on the production of engaging sales materials including digital pitch decks, interactive presentations, graphically appealing promo magazines and much more.

Business Bank Account & Accounting Practices in Place

Hopscotch will also need to put accounting practices into place along with establishing a money management system prior to transacting business.

UX/UI Design | App Prototype

Likely the most important in this plan of action is the mobile app design and/or prototype. Hopscotch must focus it's efforts on producing an app prototype that is representative of not only the brand, but the business strategy itself. The Mobile App design must also seek to make drastic improvements to the current social life oriented mobile apps currently in the market which tend to be very cluttered in comparison.

Credits:

Created with images by Michael Discenza - "Closeup of drinks at the club" • Sarthak Navjivan - "Hands Up" • Joshua Rawson-Harris - "just follow your dreams" • Tim Bennett - "untitled image" • rawpixel - "untitled image" • rawpixel - "untitled image" • rawpixel - "untitled image"

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