Four good reasons to consider investing in the development of a product.
- To create a new product to satisfy a need not yet met.
- To replace a product that does not have the features and functionality users are looking for.
- To replace a product that has become too expensive, no longer available, or maintained.
- To ensure a return on your investment and generate an income stream.
What is a Stakeholder?
A stakeholder is a company, business partner, or an individual that commits to investing funds in a product for a percentage of the profits. The stakeholder also plays a role in driving the enhancements and features of future product releases.
What are the Benefits?
Stakeholders receive a percentage of the profits on each product and subscription sale. They also receive a deeper discount rate on product purchase, subscription, and maintenance fees. Check out the Stakeholder ROI Calculator for an example.
As a stakeholder, you receive voting right based on the percentage of ownership for:
Enhancements and features that can be added to the product.
Setting the retail price of the product, subscription price, and maintenance fee percent.
The discount percentage offered to SAP Business Partner.
What is the minimum and maximum I can invest?
The minimum is 5% in increments of 5% up to a maximum of 20%. The reason we set a maximum of 20% is to attract other investors to commit to the success of the product. The more stakeholders a product has, the larger the sales force for the product.
When can I invest in a product?
You can invest in a product at any time. Early investors take a larger risk and deserve a bigger return on a successful product. Investors who wait to see the progress or the finished product first, have a much lower risk. For this reason, after each milestone delivery, the entry price to invest will also increase.
As a Stakeholder, can I sell some or all of my product interest?
Yes. Your product interest is a capital investment and you are free to sell some or all of the interest in the product. The selling price of your interest in the product is for you to determine.
What is KB1Pro’s stakeholder interest in the product?
KB1Pro will reserve a 20% interest in the product. This percentage will not and can not fall below 20%.
Are there any stakeholder restrictions?
Yes. The maximum voting rights of any individual or entity is 20%, even if they have a greater interest in the product. The restriction is in place to protect other stakeholders and the product.
Payment Schedule for Product Development.
The project will be broken down into milestones. With the exception of the first milestone to start the project, the remaining milestones focus on stakeholder deliverables for project feedback. After each milestone is completed, the stakeholders will be invoiced for payment. The number of milestones and payment schedule will be different based on factors such as project length, resources needed, the difficulty level of the milestone, change requests form previous delivered milestones and such. With very few exceptions, milestones will be 2-4 weeks in length.
Purchase & Subscription Option.
Products will come with both a purchase option and a subscription option. This allows customers to choose between owning and renting a product. The subscription model also opens the door for customers that can’t afford the purchase price and gives customers the option to test drive the product before committing to purchase the product.
Retail Purchase Price.
The Retail Purchase Price is the price purchasers pay for the product. Stakeholders and SAP Partners are free to offer an additional discount by surrendering some or all of their profit share or increase the price by offering some added value. However, in no way can we modify or discount the invoice payment due to KB1Pro. The invoice amount is what is due to the stakeholders.
Who collects the Purchase, Subscription & Maintenance Fee?
The Purchase Price, Subscription and Maintenance Fee are collected by the SAP Partner and/or Stakeholder. They will then make full payment to KB1Pro for the invoice amount and retain any remaining portion collected. KB1Pro will then distribute to the Stakeholders their share of the received funds.
Optional Maintenance Fee for a purchased product after the 1st year.
The Maintenance Fee is not subject to a Stakeholder distribution but is a discount to the seller collecting the fee.
Maintenance fees are used to provide ongoing support and bug fixes of the product. Product upgrades are limited to software versions that fall within an active maintenance fee payment period. Only products with maintenance fees in good standing can request changes, enhancements and receive bug fixes. The subscription model includes the maintenance fees as part of the subscription payment.
Can I fund a product 100%?
No. The idea behind the stakeholder program is to get several smaller investors. The more stakeholders are involved in a product, the more diverse the pool of ideas and sales channels.
I have a product idea, but I am unsure if SAP Business One community is interested. Can you help?
Yes. We will set up a product page with your idea for community input. You supply all the details and we will provide a rough development quote. From the rough quote, we will set a guess target retail price to see the community and stakeholder interest.
Can an idea alone make me a stakeholder in the product?
No. A stakeholder takes a financial risk in a product and needs to be compensated for that risk. An idea carries no financial risk. Therefore, KB1Pro cannot offer a stakeholder percentage for an idea alone. What we can offer you is advice. Talk to your target customers who can use the product. Pre-sell them the idea and get them to invest the funds in the product.
Can a product that is not 100% funded begin development?
Yes. Development in a product can begin at any time once it is approved by KB1Pro. This may slow the development process while seeking stakeholder investment.
As a stakeholder, what happens if I miss a development payment?
We understand a company or individual funds can sometimes be tight. We hope you understand other stakeholders have invested in the product as well. Any interruption in cash flow can jeopardize a product, schedule or outcome for all stakeholders. Along with the late payment and interest penalties, if you fall behind more then 2 payments, you may lose all of your investment and product stakeholder interest percentage. Avoid losing your investment and product ownership by reaching out to us.
Can any product qualify as a stakeholder product?
No. A product will need to appeal to more than one or two potential customers to increase the reward and lower the risk factors for the stakeholders. KB1Pro takes its fiduciary duty to the stakeholders seriously. We cannot, in good faith, ask for stakeholder investment if the risk is too high or potential sales low.
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