Potential Hurdles

Finance-related

As many start-ups, Upcycled Aromatics will require a significant amount of cash investment in its initial phase. In order to diminish this requirement, in addition to the traditional means of financing (angels, VC's, etc.), we will approach our feed suppliers (paper recycling plants) with an innovative plan: Front end payment for the installation of our technology for 3 years at a cost lower than the equivalent cost of their waste removal (estimated at $3000 per day for our first partner). This will allow us to secure capital early on in the development of the company. This will help us face the challenge of securing funding without excessively diluting our ownership of the company.

For the early investment, it is a well known generality that new investors will evaluate a company's worth as much lower than the worth perceived by pre-existing investors. As a consequence, these pre-existing investors feel they are giving away too large a share of the company in exchange for the cash investment. In order to avoid this scenario, we are exploring a variety non-diluting funding options:

Regulatory policy

Since some of the potential buyers of the shikimic acid and cinnamic acid are pharmaceutical companies, we may meet the problem that our product cannot get approval from regulators ( e.g FDA).

In order to mitigate this possibility, we plan to market our product to companies in a variety of industries including the pesticide industry, chemical industry, etc.

Price volatility of the product

The Price of the product will change with the fluctuations of market demand, and sometimes the price will be so low that we cannot sustain daily operations

Mitigation

1. We will maintain the quality of the product

2. We should temporarily eliminate unnecessary costs such as trade shows and advertisements

Competitive market

Since the Shikimic market is controlled by Roche, we may encounter a strong entry barrier

Mitigation

We can seek out customers who need cheap Shikimic acid, also we eat away at Roche’s profits when a bad harvest of Chinese star anise occurs