AMDP Investment Proposal Final Draft

TO: Clark Hansen, CEO, AMDP

FROM: Eshayna Madan, R&D, AMDP

DATE: October 20, 2023

SUBJECT: Investment Opportunity with August 

As a member of the Research and Development department at AMDP, it is my responsibility to find companies committed to being socially and environmentally conscious while remaining profitable. Today, I want to highly recommend investing in August, a sustainable period care company. August is committed to creating a world where "all humans have their natural needs met with quality care" (August). Throughout this memo, I will describe how August meets AMDP standards to be a quality candidate for funding. 

AMDP Standards

Triple Bottom Line 

The triple bottom line refers to the measurement of a firm's social and environmental impact along with financial performance so that a firm can be evaluated beyond just its profit (Harvard Business School, Miller). The three Ps within the triple bottom line include: 

• Profit: the financial returns a firm generates for its stakeholders
• People: an organization's commitment to contributing to positively impacting society 
  
• Planet: an organization's effect on the environment 

Corporate Social Responsibility 

Corporate social responsibility is the idea that a business has the responsibility to contribute to the society that it exists in (Harvard Business School, Stobierski). Corporate social responsibility (CSR) can be broken up into 4 categories: 

• Environmental Responsibility: is an organization behaving in the most environmentally friendly manner possible?
• Ethical Responsibility: is an organization operating in a fair and ethical manner?
• Economic Responsibility: are the firm's financial decisions in a commitment to do good?
• Philanthropic Responsibility: is the organization actively making an effort to make the world and society a better place?

Social Enterprise 

A social enterprise is a generating business with a mission (The Annie E. Casey Foundation). To be considered a social enterprise, an organization must have one or more socially/environmentally driven objectives, a focus on generating revenue from goods/services along with grants, and non-profit and for-profit business structures. 

Carbon Footprint 

A carbon footprint is the amount of greenhouse gases including carbon dioxide and methane emissions as a result of our actions (The Nature Conservancy) Carbon footprints can be measured by taking a quick quiz online! By making efforts to reduce the amount of meat we consume, taking fewer connecting flights, and using a line to dry our clothes we can reduce our carbon footprint so that we can avoid the impact of global warming. 

August History  

August was founded in 2020 by Harvard graduate, Nadya Okamoto, and Princeton graduate, Nick Jain with the intent to create 100% biodegradable, organic cotton, and "eco-friendly pads and tampons, as well as, create a network of period education for Gen-Z" (Rolling Stones, Jones). August commits to integrating sustainability initiatives in its every action. They claim to be "100% net plastic recycled certified and climate neutral certified"(August). August establishes itself as a social enterprise, compared to a traditional business, because of the external effort to reduce the stigma behind the period space in the media and everyday life. 

Within the period care industry, August is viewed as a sustainable and clean challenger company that is transparent and traceable. According to BeautyMatter.com, "August is changing the culture around menstruation"(BeautyMatter, Montemayor). August has taken steps to get legally involved in making period care accessible to all menstruators by creating a tampon tax reimbursement program. 21 out of the 50 states in the US, still view period products as a "non-essential good", and therefore charge a tax on it. By starting The Tampon Tax Back Coalition and partnering with other period care companies, August promises to reimburse the tampon tax placed on period care products as long as you email them a picture of the receipt with the purchase.

Financial Success

In terms of financial data, August "raised $1.95 million in a seed round, with investors such as venture capital firm Hannah Grey"(Women's Wear Daily, Ell). Right now their period subscription service ranges around $10-$12 per box per month, and they have seen "1 million dollars in profit since launch"(Insider, Bhattacharya). A lot of their traffic comes for free through organic views on Okamoto's TikTok platform with 3.2 million followers, and therefore marketing comes with a negligible cost. Overall, August is a profitable venture that utilizes its organic following on social media platforms to create an educated community of customers. 

August Invests in its People 

Pads and tampons generally are manufactured with plastic, but having 100% organic cotton products has proven to be more comfortable, absorbent, and eco-friendly. "Forced labor and harmful farming methods exist in the nine primary countries making 65% of the world's cotton"(August). Therefore, August made it their mission to be ethically responsible and source their cotton from Turkey, Kyrgyzstan, and Tajikistan where labor laws and farming methods are gentler on the workers' health. 

Additionally, as a One Percent For The Planet member, 1% of August's revenues are donated to support the sustainable non-profits in society. August demonstrates economic, environmental, and philanthropic responsibility through this one action as financially it is contributing to building up businesses in society and supporting environmentally conscious efforts. This is one of August's many efforts to give back to the people they impact. 

One of the largest factors that makes August a social enterprise is the underlying social mission to educate the general population on period care and destigmatize conversations around periods. Right now it is still uncomfortable for some people to say the word "period." Okamoto tested the TikTok algorithm by posting over 100 videos a day when it first launched to understand what content resonated with followers and potential customers. BeautyMatter celebrates August's efforts to represent a large variety of menstruators authentically."Okamoto’s TikToks went viral when she did things like show her real period blood on camera, which also occasionally got her videos taken down"(BeautyMatter, Montemayor). However, this type of censorship is actually what August is trying to combat. By being as authentic about period education as possible, she is serving the community to own a natural process that menstruators experience everywhere around the world. This topic should not be taboo, and should not be taught to be hidden. Rather, it should be normalized. 

Priority towards the Planet

August's commitment to the planet is remarkable. Let's make a quick comparison. A normal pad takes "800 years to fully decompose, while August pads take only 12 months"(Insider, Bhattacharya). This means that August products decompose 800 times faster than regular period care products. Additionally, their commitment to bringing 100% biodegradable packaging and products that are mostly plastic-free to the period care industry ensures that they are 100% Net Plastic Recycled certified. Through this certification, August earns plastic credits in which they can "invest in projects that collect and recycle an equivalent amount of plastic, offsetting the plastic footprint they generate"(August). 

When it comes to the actual material of the pads and tampons, August uses 100% organic cotton grown in Turkey that is "pesticide-free, harmful chemical-free, fragrance-free, hypoallergenic, and ethically source" for maximum consumer comfort and environmental impact (August). Credible sources such as Vogue acknowledge "August as one of many small, sustainably-minded menstrual care businesses making a dent in the 200,000-metric-ton market"(Vogue, Defino). Within a year of launch, August was able to make it to Vogue's radar as an influential social enterprise in a discrete market, which is impressive. 

Working for the Future 

August is a company of the future. They are trying to educate society on menstruation so that one day it will be normalized. Although we have made consistent progress, there is a long way to go to destigmatize periods. Consequently, August has invested in reducing their carbon footprint. They source their cotton in Turkey as the labor laws are most gentle to its employees, and ship finished products from across the world to a fulfillment center in Middletown, Pennsylvania by boat to keep "carbon footprint, prices, and shipment time low."(August)

When asked about the question surrounding sustainability, normal period care brands are not able to give a clear response. According to ABC News, August is able to respond to these questions and admits that they are not perfect and there are long ways to go to ensure there is absolutely no plastic in their tampon applicators as well. However, they also argue that "even in conditions where products aren’t able to degrade, using organic, biodegradable and compostable materials still reduces water usage and overall carbon emissions"(ABC News, Baniak & Griswold & Moll-Ramirez & Weintraub).

Investment Recommendation

Overall, considering that August meets the AMDP standards of adhering to the triple bottom line, instills CSR initiatives, is classified as a social enterprise, and prioritizes its carbon footprint, I believe that AMDP should invest in them. It is hard to come by organizations that are able to spearhead environmental, philanthropic, ethical, and economic responsibility all with equal quality and success. Additionally, the leaders part of August are immensely passionate about the menstruation space including creating products, an educational atmosphere, and brand coalitions. They will know exactly what to do with the funding provided by AMDP, as they have had experiences with investors in their initial days, and will provide ethical profit as they scale forward. 

Works Cited

“About.” August, www.itsaugust.co/about. Accessed 10 Oct. 2023.

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, 30 June 2022, www.businessinsider.com/how-to-grow-your-business-on-tiktok-period-product-august-2022-6#:~:text=The%20company%20has%20booked%20%241,cotton%20and%20are%20plastic%2Dfree.

DeFino, Jessica. “How to Make Your Period More Planet-Friendly.” Vogue, 22 July 2021, www.vogue.com/article/how-to-make-your-period-more-planet-friendly.

Ell, Kellie. “Period Products Brand August Secures Nearly $2 Million as the Menstrual Industry Continues to Blossom.” WWD, 24 June 2021, wwd.com/feature/august-period-brand-2-million-dollars-1234849151/.

Jones, CT. “This Tiktoker Wants the Internet to like Periods. She Needs People to like Her First.” Rolling Stone, Rolling Stone, 22 Nov. 2022, www.rollingstone.com/culture/culture-features/tiktok-nadya-okamoto-period-august-canceled-1234634959/.

Montemayor, Cristina. “How August Is Changing the Culture around Menstruation.” BeautyMatter, 12 June 2023, beautymatter.com/articles/augusts-tampon-tax-reimbursement-program.

The Annie E. Casey Foundation. “What Is a Social Enterprise?” The Annie E. Casey Foundation, 10 Dec. 2020, www.aecf.org/blog/what-is-a-social-enterprise.

Tampon Tax Back Coalition, tampontaxback.com/. Accessed 20 Oct. 2023.

“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.

Weintraub, Allie, et al. “How Companies Are Making Single-Use Period Products More Sustainable.” ABC News, ABC News Network, 9 Dec. 2022, abcnews.go.com/US/companies-making-single-period-products-sustainable/story?id=94481671.

“What Is Corporate Social Responsibility? 4 Types: HBS Online.” Business Insights Blog, 8 Apr. 2021, online.hbs.edu/blog/post/types-of-corporate-social-responsibility.

“What Is Your Carbon Footprint?” The Nature Conservancy, www.nature.org/en-us/get-involved/how-to-help/carbon-footprint-calculator/#:~:text=A%20carbon%20footprint%20is%20the,is%20closer%20to%204%20tons. Accessed 10 Oct. 2023.