The Business Plan

(AP) FORT WORTH, Texas - Tellers at the Texas bank were immediately suspicious.
After all, it isn't every day someone walks in to cash a cheque with 10 zeros on it.

But police say 21-one-year-old Charles Ray Fuller of the Fort Worth
suburb of Crowley tried to do just that.

Fuller now faces forgery and other charges after trying to cash a
cheque for $360-billion last week.




Fuller, who was released after posting $3,750 bail, claims his girlfriend's mother gave him the cheque to start a record business, a claim the woman denies.

In addition to forgery, Fuller has been charged with unlawfully carrying a weapon and possessing marijuana.

Police say they found more than 50 grams of marijuana and a .25-calibre handgun and magazine in his pockets.




Is Charles Fuller a genius?



Zany Zany World business reporter Anten Moldonado analyzed the actions of our brazen Texan as if they were brought forward in an enterprising business plan for opening a record store.


Here's what he had to say:


Early stage entrepreneurs typically find raising financing for their business venture difficult – it seems Mr. Fuller did not. He demonstrated business savvy in seeking financing first from “friends and family”. Typically entrepreneurs reach out to this group initially, followed then by angel investors, venture capital, and finally larger private equity sources.




Mr. Fuller must have had a terrific pitch – let’s try to understand why.

Consider that equity injections are always done at a particular valuation. The process roughly goes as follows:

Entrepreneurs and investors first come to terms with the ‘value’ of the business. This is typically done by valuing projected free cash flows (the amount of money the business will make in the years to come) and assigning a multiple to determine how much someone should pay today to earn the rights to that money in the future.

The entrepreneur must then consider how much of their business they’re willing to part with. For example, if we decide that your business is ‘worth’ $100,000, an entrepreneur would have to give up 40% of their business to take on a $40,000 equity injection.

Let’s assume that Mr. Fuller’s mother’s girlfriend (let’s call her Candy) invested $360,000,000,000 to earn a controlling stake in his record company – say 80%. This would imply that Mr. Fuller’s record company is, at present, worth $450,000,000,000. Given that the record industry is not growing quickly, the multiple Mr. Fuller would be able to negotiate from a shrewd investor, like Candy, with hundreds of billions of dollars to invest, would be quite low.

Let’s assume that it’s 5 times earnings. This would imply that Mr. Fuller’s business currently earns (or will be earning very soon) $90,000,000,000.

To fully grasp how large a number this is, we must work backwards to calculate his revenue.


Let’s assume the record business margins are low, since marketing and operations expenses are high. If he’s earning $90,000,000,000 and his margins are 10%, this implies that Mr. Fuller is generating $900,000,000,000 in revenue. At $20 per CD sold, this translates roughly to 45,000,000,000 CDs sold each year. This implies that each of the 7,000,000,000 people in the world buy about 6 CDs from him personally, each year.

My conclusion is that Mr. Fuller is a tremendous businessman who was able to put together a terrific business pitch and convince an investor to part ways with a large sum of money. I would, however, suggest that he reconsider the feasibility of implementing his business plan.

There you have it.

The Zany Zany World applauds you and your corporate savy, Charles Fuller.