Question

Business idea: Design and produce a drinking water filter for home use that is organic and biodegradable and pair it with a stylish and ergonomic carafe (pitcher) that is elegant enough to be the centerpiece at a formal dinner party. offer replacement filters on a subscription basis so users never have to worry about running out of filters.
pitch: Most drinking water filters made for home use are difficult to use and somewhat unappealing. The filters are usually designed to fit on the top of a water pitcher, and if the user isn’t careful can easily slip off and spill water on the kitchen counter and floor. In addition, because the filters usually contain charcoal, if the water sits in the refrigerator too long, small flakes of charcoal will be visible in the water. Not too appealing, particularly if you’re serving the water at a dinner party.
The Soma drinking water filter and carafe were developed to solve these problems. The filter was designed by David Beeman, a water filtration expert, who created water formulas for Starbucks, Peet’s, and other global brands. The filter, which is shaped like a funnel, is made from all-natural Malaysian coconut shells, vegan silk, and food-based plastic. It is 100 percent organic and 100 percent biodegradable. In contrast, most drinking water filters are made from plastic resin and charcoal. Soma filters are paired with an elegant hourglass-shaped carafe that is large enough to serve a family but sleek enough to fit in a refrigerator. It is contoured to fit comfortably in your hand and has a beveled edge for dripfree pouring. The filtration process is simple and quick. You simply fill the carafe with tap water, let the water pass through the filter, and it is ready to drink. The filters last for two months. The combination of the filter and the carafe delivers clean, crisp, pure, good-tasting water. The carafe and filter are also showpieces. Their presence would be appropriate as the centerpiece for a formal dinner party. To relieve a pain point for its users, Soma offers a subscription service for replacement filters. New filters are delivered every two months. As part of its commitment to pure, clean water, Soma denotes a portion of its sales to Charity: Water. A nonprofit organization, Charity: Water brings clean, safe drinking water to people in developing countries. Soma also contributes to environmental sustainability by providing an alternative to bottled water,
which utilizes plastic bottles that must be recycled or disposed of. Soma launched a Kickstarter campaign in December 2012. The campaign reached its goal of $100,000 in nine days, and raised a total of $147,444 by the end of the campaign.

9-35. Based on the material covered in this chapter, what questions would you ask the firm’s founders before making your funding decision? What answers would satisfy you?
9-36. If you had to make your decision on just the information provided in the pitch and on the company’s website, would you fund this company? Why or why not?

Answer 1

1) Before funding decision, I will ask the following questions from the founders before making my decision:

a) How your non profit organization will repay our funded amount?

b) What is your business model?

C) Have your organization will provide us guarantee?

d) What time period you people are seeking loan?

e) Do your model sustainable?

f) How can we get better opportunities by this funding?

g) Do your organization will provide us quarterly progress report?

When will they provide us positive response of these questions like about their business outcomes, financial potential etc? Which can be provided us a part of loan principal & interest amount.

2) No, we can’t fund on the basis of information provided to web portals or pitch. We fund when our credit appraisal team understand the paying capacity is positive, civil score is good, there is a source of income and scope of business operations. Finance can’t see things on paper only before funding viability will be checked on ground level. if ,detail feasibilty analysis will be done then our finance and loan department will fund this non -profit organization.