For Investors: Please read our Business Concept Below. Investors will be allocated at least 20 % of the overall shares in a funding vehicle. After an IPO only 15 % will be made available to the public in general or in circulation.

For Parents/Students: You are the potential customers here and my first priority is to set the record right. Whether you are aware of this or not, almost all universities are in need of better funding mechanism. So unless there is a better alternative now and a will to implement this change, the only losers will be ourselves. Imagine this, a poorly trained doctor will provide a poor service through no fault of his own. The sufferers will be us. We have only ourselves to blame if we do not make efforts to improve the current conditions. No doubt, I am sure you will agree with me that our standard of education has fallen at all levels. As an employer myself, I notice graduates today want more money and contribute less either because they are not prepared to learn or simply because they are not adequately trained or knowledgable. In my time, we have 15 students to 1 lecturer and I am told we have twice the students now for 1 lecturer. With improved funding to attract the best, I am sure we will have better quality. Eduoption is merely a possible solution where it benefits both parties without attracting too much political interest since in essense the funds are injected directly into the education system. I have no doubt that education or rather quality education will continue to rise in tandem with supply and demand. There is no control over this but at least, eduoption provides a platform for private negotiation to take place and a means to control cost which is a factor of uncertainty. Rightly or wrongly, eduoption perserves some form of market play on course fees but by doing so, it also transfer uncertainties to the provider which is the only way to control these cost. Of course your feedback is most welcome if you have the time to sent me an email: chris@eduoption.com

For Universities/Colleges:

There is no easy way to say this but if you consider this will help your clients in fixing the cost of education and at the same time provide some initial income to your institution then by all means give me an email to discuss further. In my proposal, universities/colleges who are interested to take part in this application will be allocated shares in the overall structure amounting to no more than 20 % spread evenly between institutions. A participation fee will be determined later. A software license fee of US 20K per year is also required which is for on-going support and services. Each transaction carries a cost of US 25 for the institution and US 25 from parents (unless they are already subscribers where they will pay a discounted cost of US 10)

Business concept for eduoption.com

The business concept is to build an Internet portal for universities to seek funding and forecast student demand for their courses. From the potential student's point of view, a way to hedge their educational cost.

Are there any additional developments necessary to bring this technology/product to market? What (if any) technical breakthroughs will be required to commercialize this technology? How much time do you think it will take?

We have a basic program without any bell or whistle which we have tested. What is more critical however is to sign up universities to participate in this first rather than to continue spending money on the technical side which is not particularly challenging. What is important is the business concept here and how to convince universities to participate. Demo at eduoption.com is for managing the selling of options. Another software to calculate the 'fair' price of options is only available for licensed members. A secondary market (exchange) will be developed to facilitate the selling or transferring of options.

What is the intellectual property position?

Patent pending Application 09/922489.

What is the breadth of the technology? That is, is the technology a single-product idea or does it have the potential to create many new products?

Yes it has potential to include airlines as well particularly for predicting air-cargo capacity and hedge these positions online. Also patent pending.

What production capabilities currently exist and what capabilities are required?

Until we can find sufficient funding which we are attempting now, this project will be on a slow track but I am hopeful we will get support particularly from parents.

Do you plan to outsource production?

We do outsource development (programming) to our partners in Indonesia and Malaysia.

Marketing/Distribution
Describe the need for your business product or service. What are its end uses or potential applications., i.e., what functions are performed and what problems are solved? How significant is the need? What evidence/data exists that demonstrates the need for the technology or product?

Our proposed product is an hedging system designed for education institutions such as universities and potential students. It is an Internet application with a database to keep record of transactions. The main function of this system is to predict the demand for courses and to raise funds based on these demands. The main problem it will solve is to increase cash flow for the universities involved. On the demand side, it will solve the problem of not knowing the cost of education in the future, say the current cost of a MBA is 15 K but the potential student is unsure what the cost is in 10 years time. This application will provide a range of possible cost which the student can afford and fixed this cost for 10 years. Currently there is no system in the world that provides this heding facility. There are prepaid funds sponsored by states such as in the state Virginia under Plan 529 where it operates like an insurance scheme based on average cost. As per any 'insurance' or 'trust' structure, there are many criteria. Also one must remember these schemes are designed solely for the students while our instrument focussed on both students and institutions. We believe that direct investing in universities ensures a better place of learning for our children.

What market(s) are envisioned for this technology or product? Who will be the customers (the users) for the product? What is the size of these markets?

The users will primarily be parents with school children that they consider will be able to continue their studies to university level. We expect parents from all over the world to have this requirement sometime in their life time. Other potential clients could be fund managers with education funds who wish to hedge their exposure as well. On the supply side, universities/colleges that need funds so this application provides an relatively cheap way to raise funds. I believe it is rare to find one that does not have this requirement.

What alternative ways exist to satisfy the need addressed by this technology/product? What companies provide competitive technology and/or products? What other developments are happening (or might happen) to affect the market for this technology/product, including regulatory agencies, and what will their impact be?

None that we know off but there is a patent in existence that works on the principle of profit sharing, ie they come up with some cash to educate a particular student and later when the student is producing income, this income will go back to repay the indebtedness and profit sharing. Please be aware our concept is different from this but it is the closest we have seen. We do not provide funding, we act as the developer/facilitor through an exchange mechanism in the secondary market.

Describe the competitive advantages and disadvantages of this technology/product compared to other approaches of addressing the same need or application. Why would someone choose this technology/product over other competing technologies or products?

In most cases a person applying to universities have 3 choices, ie by scholarship or by some sort of loan or by self-funding. Nearly 80 % of the population uses the last ie self-funding and although being the last choice, our method helps them to plan for the future by locking in the cost. They can then plan further by investing in the appropriate bond/annuity to get the right amount at expiration. Eduoption provides immense flexibility by allocating what is deemed affordable to the buyer and acceptable to the seller of the option. In any regards, the principle behind options is one of opportunity cost and reinvestment rates where risk is transferred to another party willing to share the upside profit without losing the whole investment. So if fees is actually higher than predicted, then the upside profit is 'shared' with the buyer of the option since he will save for not paying more. The seller gain by reinevesting the initial amount at the risk free rate at the outset.

Describe your distribution approach. Do you plan to outsource?

Initially will be using the universities themselves as the point of distribution but the main approach will be the Internet where supply and demand can be matched instantly according to their needs and budget.

Management Issues
What do you believe are your qualifications with regard to starting up and managing a new business? What specific assistance do you think you need?

I have worked in the financial circle for 5 years before lecturing in the university. I have two master degrees, one in law and another in applied finance. I am managing my own business now which runs several online websites for the last 4 years. I need assistance to get a foothold in the US.

Have you established a management team? If yes, who are the people involved and what are their qualifications and commitments? If no, what is you plan for assembling a management team?

I have an established management team consist mostly of programmers. This is because we are primarily a consultancy company which is moving into developing our own products to reduce reliance on clients. The programmers have at least a master degree in electronic engineering stationed in Australia, Indonesia and Malaysia. Our strength is that we do not have to pay overhead costs for offices etc as most work is done from home. Some details below;

Inventor: Chris Kwan, Master of Applied Finance, Master of Environmental Law. (formerly PhD Candidate in Electrical Engineering, University Sydney)

Management Team (based in Australia, Singapore and Indonesia):
Imron -Programmer (Master of Computing Science, University of NSW) Popo Budiato -Programmer (Bachelor of Computing Science) Kenneth Sam - Finance/Fund Raising (Bachelor of Business, Oregon University) Howe Leong Sen - Programmer & Business Analyst (Bachelor of Computing Science, UCLA) Howe Yeun Sen - Marketing (Bachelor of Computing Science, UCLA) Wang XiaXing - Programmer/Neural Network (Phd candidate Electrical Engr, University of Sydney) Jin DongXi - Programmer/ Real Time (Master Candidate Electrical Engr, University of Sydney) Wen Yining - Telecommunication (PhD Candidate Electrical Engr, University of Sydney)

How many people plan to dedicate themselves full time to building this business?

For this project, I would be dedicating 3 people to work on the technical side in Australia and Indonesia. On the US side, if we gain some sort of foothold, we will be looking for sales people to solicit universities starting from the west coast covering brand universities. We expect them to be the front end and to provide support and customer care. I believe the best marketing is by word of mouth, if a product serves the customer's needs then it is bound to be attractive to others. Sales people will be paid a commission by referal much like Amazon.com

What categories of jobs and what level of employment do you expect to create?

In the US will be mainly marketing type. Since the technology is already completed, I do not see much work is required here other than research on refining the option formula.

If your real strength is technology, would you be willing to consider delegating management responsibility to someone else? Under what conditions, if any?

Yes, we would as I mentioned before, we know very little of the US market and have no connections.

Financing
How much money do you think will be needed to develop the technology/product? How would the money be spent?

Development for the product is relatively small as we developed this in-house. As we know our technical stuff well, we do not expect to spend much money here. We will be using the money for marketing people in the US to do the initial solicitation and when the market has gained some foothold to further fund an IPO. We expect funding to be in terms of 3-4 million dollars for first round funding. This amount is not 'huge' as we are building the only system in the world to hedge education fees. We are also building the exchange for this and we earned income from each transactions and through licensing our system to users.

How much have you or others already invested in the technology/product? How much money are you prepared to invest in your idea? How much money would you expect external sources to provide? Have you considered a strategic partner?

We have invested 2.6 years of our time designing the program or business process. I am prepared to invest US 50 K in this. Since the system and other R&D is already completed, what is left is only marketing.
 
11 June 2002 (Updated)