Rescue 911 Case Study (Historically identifying Opportunity) Jayden comes from a sailing family and he grew up near the Harbor in Newport Beach, California. He worked on the Balboa Island ferry which transported cars and people from the Island to the Balboa Peninsula during High School and College summers. As he looked back on his job, he recalled the issue that when cars broke down getting off the ferry, tow trucks from the Auto Club would come tow them off the boat. Traditionally, the U.S. Coast Guard would assist boats that were stalled out on the ocean, i.e. out of fuel, mechanical problems, boat will not run for whatever reason. The U.S. Coast Guard recently announced a cut back in service and henceforth would only rescue boats caught in life threatening emergency situations. Routine problems fuel, battery, and broken engine, et al would not be served. Jayden remembered his experience with stalled cars using AAA (Automobile Association of America) and concluded there was an opportunity to provide non-emergency towing service for boaters. Jayden then went to friends and family and borrowed $50,000 as down payment on a used boat and became a towboat captain, working 24/7 around the clock. He charged $200 per hour for a call and worked the coast of Orange County, CA. He had a successful start to his new venture. Many others had similar ideas and Jayden soon encounters competition for customers and price from similar one-man towboat captains in his marina and surrounding areas. He saw the need to expand coverage with more boats in more marinas to capture the market in order to avoid headto- head competition. Jayden is your cousin and understands your goals and desires are to become a successful entrepreneur. He comes to you to for advice. Jayden comes prepared with his research: -To be effective he must cover 240 miles of California coastline - Boaters expected a response less than 60 minutes - He estimates that this would require one boat for every 20 miles of coastline - Cost of a fully equipped new tow boat is $160,000 - Cost of a crew & maintenance is $10,000 per month per tow boat

Your challenge (one page max): - Is this a good idea, i.e. would you bankroll him? Yes or no, why? - How would you coach him to execute his roll out to take advantage? - How much capital/money is needed to expand his business (even if you say no) You must share and show financial model. - Give broad categories of the use of capital. Where will the money be spent and invested?