AMDP Investment Memo - DRAFT

TO: Clark Hansen, CEO of AMDP

FROM: Judy Jiang, R&D, AMDP

DATE: Mar 7th, 2024

SUBJECT: Recommendation to Invest in August 

AMDP is seeking a new investment opportunity that aligns with AMDP’s core values of triple bottom line, corporate social responsibility, social enterprise, and carbon footprint. After extensive research, I recommend AMDP to invest in August, a period care company. 

In this memo, you will find the following information:

1. Definitions of AMDP’s core values and investment thesis 

2. Company description of August 

3. Third-party appraisal

4. Final recommendation

   
   

   
   

1. AMDP’s Core Values and Investment Thesis

AMDP builds its investment thesis around its core values of triple bottom line, corporate social responsibility, social enterprise, and carbon footprint. To identify companies that fulfill AMDP’s investment thesis, it is important to understand the definition of its core values. 

Triple Bottom Line (People, Plant, Profit)

The triple-bottom-line is a three-part business concept that states firms should measure their performance by profitability, as well as social and environmental impacts (Harvard Business School). 

• People: firms should evaluate their success based on positive impacts brought to all stakeholders 

• Plant: firms should evaluate their success based on positive environmental impacts 

• Profit: firms should evaluate their success based on profit created for shareholders (Bhattacharya)

  
  

  
  

Corporate Social Responsibility

Corporate social responsibility is a management concept where companies should create value on economic, environmental, and social levels, holding themselves socially accountable to all shareholders and stakeholders (UNIDO). 

Social Enterprise

A social enterprise is a business that has social objectives integrated into its primary goal, achieving its goals using a for-profit structure (Corporate Finance Institute). 

Carbon Footprint 

• What is a carbon footprint: the total amount of greenhouse gas emissions generated to create a product or perform an activity. 

• How to measure carbon footprint: total emission is calculated by adding up the emissions produced in every step of the business operation, from manufacturing to waste disposal. 

• Why is it important to reduce it: carbon footprints contribute to climate change and pollution, which will reduce quality of life (Mulvaney). 

2. Company Description of August

August is a period care startup company founded in 2020 by social entrepreneurs Nadya Okamoto and Nick Jain (itsaugust.co). The company delivers innovative and environmentally friendly period care products, and its main product lines are pads and tampons (itsaugust.co). August’s primary sales channel is its online shop. With discount incentives, customers are encouraged to use its subscription service which delivers products regularly. Since founder Okamato is passionate about period positivity, August created several initiatives to increase the accessibility of menstrual products and foster open conversations about period health (itsaugust.co). 

Three Milestones of August: 

• Funding: August received $1.95 million in total seed funding from two venture capitals, Hannah Grey and Bullish (Axios). As of today, August raised a total funding of $5.6 million, which shows high investor confidence (Axios). 

• Financial track record: Within the first year of product launch, August recorded over $1 million of revenue, which is a rare achievement for first-year startups (Axios). 

• Marketing and how it is perceived in its field: Due to its successful social media marketing strategy, August is perceived to be a gender-inclusive period care brand that targets Gen-Z consumers. August currently has 336K followers on​​​​ TikTok, while the founder Okamoto has over 4 million followers on her page, indicating a loyal customer base (Axios). 

  
  

  
  

August’s Business Claims

After a thorough review of August’s claims, I am confident that August aligns with AMDP’s investment thesis and core values. Firstly, AMDP is looking to invest in a social enterprise, and August is a social enterprise with the claim of improving people’s menstrual health through sustainable period products. Specifically, August fulfills its claims through its triple-bottom-line approach. 

People 

August has brought many positive impacts to people in its community. To increase the accessibility of menstrual products, August has donated 120k+ period products and 50k+ emergency relief funds (itsaugust.co). Moreover, 21 states still consider period products as non-essential goods and charge a tampon tax. August believes tampon tax is unjust and has created a “Tampon Tax Back” program, reimbursing up to $7000 of tampon tax back to customers who live in those states (Bhattacharya). To foster open conversations about menstruation, August created an intimate online community by making a group chat called “Inner Cycle” (Bhattacharya). All genders are welcome to ask questions and share their period stories in an open forum, allowing August’s customers to stop feeling ashamed about their menstrual experiences. 

Plant

August makes a strong effort to implement sustainable business practices. For instance, through its partnership with Plastic Collective, an agency that helps brands reduce plastic waste, August is now certified as 100% net plastic recycled (Plastic Collective). While typical period products take up to 800 years to decompose, August’s pads and tampons are 100% organic cotton, which is biodegradable in 12 months (Fast Company). Along with its products, August has established a carbon-neutral supply chain by offsetting emissions from its operations with Sidrap Wind Farm in Indonesia (Fast Company). 

Profit 

Since August is a privately-owned company in an early growth stage, there is limited financial information available. As such, instead of focusing on its current profitability, I will be evaluating its profitability potential. Given that August has recorded $1M+ in revenue in the first year, August is likely to have strong revenue growth years ahead. This prediction is supported by the growth of the global period care industry. The industry is estimated to grow at an annual rate of 4.2% until 2031, reaching a market size of $51.9 billion (Allied Market Research). Furthermore, August is subscription-based, which makes customers more loyal and less likely to switch to a different brand. The subscription revenue model ensures that August benefits from recurring revenue, making August more financially sustainable.

August fulfills its business claim of triple bottom line and corporate social responsibility practices. Additionally, the company reduces its carbon footprint through its carbon-neutral supply chain. Thus, August is a social enterprise that matches AMDP’s core values. 

August’s Growth 

August has grown rapidly to establish its national presence, which suggests its potential to transform from a startup into a major brand in the consumer retail space. It currently partners with 100+ schools and universities to provide period care products to students. In 2023, August expanded into in-person retail, launching its products in 400+ Target stores across the U.S. (Johnson). At the end of 2023, August announced its new partnership with Equinox, the luxury fitness club, to supply pads and tampons at all Equinox Clubs (Forbes). 

3. Third Party Appraisal 

Appraisal 1 

Forbes––a historically well-known business magazine and news outlet––states that “the menstrual care market is overdue for a Gen-Z refresh, and August––a sustainable, gender-inclusive period care brand founded by two Gen-Zers––has captured this opportunity better than anyone” (Forbes). 

What does the quote mean? 

The expert opinion proves that August is correctly targeting Gen-Zs as their main customers as the Gen-Z demographic demonstrates strong demand for a progressive period-care brand.  

Appraisal 2

Modern Retail––a media brand covering the ins and outs of the retail industry––states that “TikTok has become an indispensable tool for product discovery, especially for brands like August that target Gen-Z consumers. The TikTok brand playbook has mostly relied on product promotions. Okamoto, however, said growing her personal account––essentially, making herself the influencer––has proven to be a better strategy for August” (Modern Retail).  

What does this quote mean? 

The expert opinion shows that August has a unique marketing strategy, which will lead the company to success in targeting Gen-Z consumers. August’s marketing strategy is to create intimate relationships with its customers through the founder’s personal branding as a social entrepreneur. 

4. Final Recommendation 

Understanding that August is a startup, instead of creating my recommendation based on its financial performance, I highly recommend AMDP to invest in August based on the following criteria:

• Alignment with AMDP’s investment thesis and core values 

• Operational performance 

• Growth potential 

• Third-party appraisal 

First, August has successfully delivered sustainable products through a carbon-neutral supply chain, while taking initiatives to empower consumers to take ownership of their menstrual health. This is why August is a suitable investment opportunity as it aligns with AMDP’s core values. Second, August can achieve strong operational performance through its subscription model and creative social media marketing that effectively generates a loyal Gen-Z customer community. Third, August has tremendous growth potential as it rapidly expanded its sales channel from online to in-person retail, as well as partnerships with universities and fitness clubs. August will exponentially grow due to the continuous growth of the period-care industry. Last, both third-party appraisals demonstrated positive opinions on August’s marketing strategy and business model. In summary, based on the four criteria, I highly recommend AMDP to invest in August. 

Work Cited

Allied Market Research, https://www.alliedmarketresearch.com/. “Period Care Market Size, Share, Growth: Industry Forecast 2031.” Allied Market Research, www.alliedmarketresearch.com/period-care-market-A16272. Accessed 8 Mar. 2024.

August Company Information. “Sustainable Period Products: Reimagine Organic Period Care.” August, www.itsaugust.co/. Accessed 8 Mar. 2024.

Axios. Period Care Startup August Raising Bridge Round, www.axios.com/pro/retail-deals/2023/10/23/period-care-startup-august-raising-funding-retail. Accessed 9 Mar. 2024.

Bhattacharya, Shriya. “2 Gen Z Entrepreneurs Launched a Sustainable-Period-Care Startup That’s Booked $1 Million in Revenue. Here’s How Their Strategy of Posting 100 Times a Day on TikTok Grew the Business.” Business Insider, Business Insider, www.businessinsider.com/how-to-grow-your-business-on-tiktok-period-product-august-2022-6. Accessed 8 Mar. 2024.

Corporate Finance Institute. “Social Enterprise.”, 7 Oct. 2023 corporatefinanceinstitute.com/resources/esg/social-enterprise/.

Fast Company. “This Gen Z-Founded Period Brand Is Building a Community Around ...” Sep, 2022. www.fastcompany.com/90718217/august-sustainable-period-care. 

Harvard Business School. “The Triple Bottom Line: What It Is & Why It’s Important.” Business Insights Blog, 8 Dec. 2020, online.hbs.edu/blog/post/what-is-the-triple-bottom-line.

Johnson, Travers. “How a Gender-Affirming Period Care Brand Went from TikTok to Target.” Forbes, Forbes Magazine, 1 Apr. 2023, www.forbes.com/sites/traversjohnson/2023/03/31/how-a-gender-affirming-period-care-brand-went-from-tiktok-to-target/?sh=7974d25d4390.

Monteros, Maria. “‘We Don’t Believe so Strongly in Paid Media:’ How DTC Period Brand August Is Growing a Gen Z Audience on TikTok.” Modern Retail, 31 Oct. 2022, www.modernretail.co/retailers/we-dont-believe-so-strongly-in-paid-media-how-dtc-period-brand-august-is-growing-a-gen-z-audience-on-tiktok/.

Mulvaney, Kieran. “What Is a Carbon Footprint-and How to Measure Yours.” Environment, 24 June 2022, www.nationalgeographic.com/environment/article/what-is-a-carbon-footprint-how-to-measure-yours.

Plastic Collective. “Brands - Certified Plastic Neutral.” 23 Feb. 2024, www.plasticcollective.co/brands/.

UNIDO “What Is CSR?” www.unido.org/our-focus/advancing-economic-competitiveness/competitive-trade-capacities-and-corporate-responsibility/corporate-social-responsibility-market-integration/what-csr. Accessed 8 Mar. 2024.