Daebak Capital, back to portfolioFictional firm · for teaching

Sunrise: ten lunch shops and a five-shop growth plan

Dumplings on a lunch-shop counter
Sector
Consumer and services
Shops
Ten across Seoul, starting in Mangwon (also Hapjeong and Yeouido)
Founder
Mina Song, who opened the first shop in 2014
Fund
Daebak Equity III, deal one
Total funding
US$5.6m, all equity
Uses
US$4.2m purchase price paid to Mina Song; US$1.4m of growth capital for five planned shops
Status
Current

Mina Song built ten lunch shops across Seoul, starting in Mangwon. Together they earned about US$0.70m of cash a year. She wanted to keep the food the same and grow.

Daebak bought the business with equity only, paying Mina US$4.2m and setting aside US$1.4m for five new shops. The plan assumes each new shop earns about US$80,000 of cash a year once it matures, less about US$0.21m of extra central costs: 0.70 + 5 × 0.08 − 0.21 = about US$0.89m of yearly cash.

Timeline

  1. Daebak and Mina agree terms; Daebak Equity III funds US$5.6m through Sunrise HoldCo.
  2. Plan: five new shops open with the US$1.4m.
  3. Plan: as the new shops mature, yearly cash rises toward about US$0.89m.
"I wanted the shops to keep the same food and grow. Daebak paid me fairly and funded a plan for five new shops."
Mina Song, founder of Sunrise

Illustrative quote from a fictional founder. No one was paid for it. Past performance does not predict future results.