Reality Check
Updated: December 5, 2025
Version: 2.0
Honest Assessment
Budget Reality Check
Critical Budget Update
Previous Budget (€85K): INCOMPLETE - Missing €45K in essential infrastructure
What Was Missing:
- Land preparation: €10K (excavation, foundation, drainage)
- Roofing: €11K (structure, materials, insulation)
- Windows & doors: €5K (energy-efficient)
- Water/sewerage: €12K (well, septic, plumbing)
- Solar & electrical: €25K (panels, battery, wiring)
- Heating: €5.5K (stove, chimney)
- Interior finishing: €4.5K (additional)
- Contingency: €12K (increased from €805)
New Realistic Budget: €130K (53% increase)
Why This Matters: Previous budget would have left cottage incomplete. New budget ensures complete, functional infrastructure.
What's Strong
- ✅ Platform built (32K+ lines of code, production-ready)
- ✅ Land owned (14 hectares, Latvia)
- ✅ Clear business model (T1 CCT + T2 Subscriptions)
- ✅ Realistic projections (4-8x ROI over 5 years)
- ✅ Complete budget (€130K includes ALL infrastructure)
- ✅ Three-stream fundraising (Corporate + Subscriptions + Investors)
- ✅ Two investment options (Equity OR Future NFT)
What's Risky
- ⚠️ First-time execution (no prior cottage builds)
- ⚠️ Market timing dependent (carbon credit prices)
- ⚠️ Regulatory changes possible (EU CRCF, MiCA)
- ⚠️ Competition may emerge (12-18 month lead)
- ⚠️ Construction costs may vary (quotes needed)
- ⚠️ Subscription adoption uncertain (100-500 target)
Mitigation Strategies
Construction Risk:
- Get 3+ quotes from Latvian suppliers
- Build contingency buffer (10% = €12.5K)
- Phase construction (cottage first, then expansion)
- Use proven hempcrete methods
Market Risk:
- Pre-sell carbon credits (Ricardian Contracts)
- Diversify revenue (CCT + subscriptions + eco-tourism)
- Conservative pricing (€45-60/tonne vs €85-250 market)
- Target 25M EU SMEs (large addressable market)
Execution Risk:
- Conservative bootstrap approach (1 hectare Year 1)
- Prove model before scaling
- Self-funding after Year 1 (no additional investment)
- Phased validation (1→2→5→14 hectares)
Regulatory Risk:
- Legal compliance prioritized (EU CRCF, MiCA)
- Working towards certification (Q3-Q4 2026)
- Two investment options (Equity OR Future NFT)
- No utility tokens in Phase 1 (simpler structure)
Competition Risk:
- 12-18 month competitive lead
- First-mover advantage (hemp + carbon + eco-tourism)
- Platform built (32K+ lines of code)
- Land owned (14 hectares secured)
Financial Reality
Conservative Projections
Year 0: €130K investment → €0 revenue (building phase)
Year 1: €663-925K revenue (CCT + subscriptions + eco-tourism)
Year 2: €706-988K revenue (2 hectares, 2 cottages)
Year 3-5: €3.36K-2.6M revenue (scaling to full capacity)
ROI: 4-8x over 5 years (€130K → €520K-€1.04M enterprise value)
What Could Go Wrong
Worst Case Scenarios:
- Construction overruns: €130K → €150K (+15%)
- Mitigation: €12.5K contingency buffer
- Low subscription adoption: 50 subscribers instead of 100
- Mitigation: Focus on corporate pre-sales (€50-60K)
- Carbon credit prices drop: €30/tonne instead of €45
- Mitigation: Still profitable, adjust pricing
- Regulatory delays: CRCF certification delayed 6 months
- Mitigation: Pre-sell credits, deliver after certification
Even in worst case: Model remains viable with adjusted timeline
What Could Go Right
Best Case Scenarios:
- Strong subscription adoption: 500+ subscribers Year 1
- Impact: €60K+ annual recurring revenue
- Carbon credit prices rise: €60-85/tonne
- Impact: €840-1,190 per hectare (40-85% increase)
- Early CRCF certification: Q2 2026 instead of Q4
- Impact: Faster scaling, higher credibility
- Multiple corporate contracts: 5+ contracts Year 1
- Impact: €150-250K upfront revenue
Upside potential: Significantly higher than conservative projections
Competitive Reality
Our Advantages
- ✅ Platform built (not just an idea)
- ✅ Land owned (not just planning)
- ✅ Complete budget (realistic, not optimistic)
- ✅ Three-stream fundraising (diversified risk)
- ✅ Two investment options (flexible for investors)
Our Challenges
- ⚠️ Unproven execution (first cottage)
- ⚠️ Market education needed (hemp + carbon)
- ⚠️ Regulatory complexity (EU CRCF, MiCA)
- ⚠️ Competition possible (12-18 month lead)
Why We'll Win
- First-mover advantage (hemp + carbon + eco-tourism)
- Complete infrastructure (not just software)
- Realistic approach (1 hectare proof, then scale)
- Strong fundamentals (€27B+ hemp market, €85-250/tonne carbon)
Investment Reality
For Equity Investors (Option A)
What You Get:
- 7-10% equity in Secret Trees Gardens LLC
- Profit sharing from property revenue
- Property appreciation
- Cottage usage rights
- Exit potential (acquisition/IPO)
What You Risk:
- Construction delays or overruns
- Market adoption slower than projected
- Regulatory changes
- Competition emerges
Why It's Worth It:
- Real asset backing (14 hectares + cottage)
- Multiple revenue streams
- 4-8x ROI potential over 5 years
- Self-funding after Year 1
For NFT Investors (Option B)
What You Get:
- NFT membership (Phase 2, 2027+)
- DAO governance rights (if 3+ NFTs)
- Platform fee discounts (20% off)
- Founding member status
What You Risk:
- Phase 1 must succeed first
- NFT launch delayed (2027+)
- Governance value uncertain
- NO financial returns (legal compliance)
Why It's Worth It:
- Founding member status
- Platform governance rights
- Support global hemp economy
- Aligned with mission (not just profit)
Bottom Line
This is a real business with real risks and real potential.
- ✅ Complete budget (€130K realistic)
- ✅ Conservative projections (4-8x ROI)
- ✅ Multiple revenue streams (CCT + subscriptions + eco-tourism)
- ✅ Phased approach (prove, then scale)
- ✅ Two investment options (Equity OR Future NFT)
Not a get-rich-quick scheme. A 5-year journey to build a sustainable business.
For complete details, see Investment Memo and Financial Projections.