Indicators for investors

Profit indicators

Providing ROI (Return on Investment), APY (Annual Percentage Percentage) and Dividend Rates to investors requires consideration of the profitability and growth prospects of the business. Below are the general indicators when soliciting an investment of 3M USD.

ROI (Return on investment)

ROI is a measure of return on investment and is calculated as follows:

ROI=｛(profit-investment amount)÷Investment amount｝×100

For example, if the profit after investment is 0.9M USD in one year, the ROI would be:

$$\text{ROI} = \left(\frac{0.9M - 3M}{3M}\right) \times 100 = -70\%$$

However, this is a first-year example, and considering long-term growth, the ROI could turn positive once the business becomes stable and profitable.

APY(annual interest rate)

APY is a measure of the annual return on an investment and is used when interest is compounded. Subscription businesses often have upfront costs in the first year, so to accurately calculate APY, you need to consider cash flow once the business has stabilized.

Dividend rate

Dividend ratio indicates the percentage of profits paid out to investors. Typically, in subscription businesses, dividends are often set low in the early stages, and the dividend rate is generally increased after the business stabilizes. The specific dividend rate is determined based on the business' profitability and growth strategy.

Concrete proposal

• First year: ROI can be low, so make sure investors understand returns over the long term.

• From 3rd year onward: As business stabilizes and annual profits increase, expect ROI to be around 20-30%.

• Dividend rate: Set it slightly low in the first year, and consider raising it to around 10-15% once the business has stabilized.

These metrics should be adjusted based on your business's specific revenue projections and market trends.