Company Overview –
Secure user-authorized firearms for personal defense.
|Name: Safety First Arms||Minimum Raise: $500K|
|CEO: Robert Allan||Maximum Raise: $1M|
|Company Founded: 2012||Structure of Raise: SAFE|
|Location: San Diego, CA||Valuation: $15M Valuation Cap|
|Crowdfunding Portal: DreamFunded||Minimum Investment: $100|
|Crowdfunding Link: https://dreamfunded.com/companies/safety-first-arms|
|Positives||Risks and Reservations|
|Firearm safety is a high priority for consumers.||$15 million valuation seems very high for a company with no revenue. If all $1,000,000 is raised, investors only own 6.25% of the Company.|
|The company has a number of patents to protect its designs.||The firearms industry is very competitive and many other companies have attempted but failed to market firearms with built in locks.|
|There are few competitors offering “smart” firearms||Firearms are highly regulated by both federal and state authorities and regulations vary state by state and can change unexpectedly.|
|Relationships with large California firearms stores||Company management team is small with little firearms industry experience and there are no independent board members.
The company has few, if any, resources to defend its intellectual property position or defend itself against claims of infringement.
Every year 200,000 guns are stolen and almost 1,000 teens commit suicide with a parent’s gun. Accessibility vs. safety is an issue gun owners with children face.
Safety First Arms created a gun has a PIN-code operated locking mechanism that prevents unauthorized firing and a programmable motion-sensitive alarm that protects against tampering and deters theft.
Develop guns beyond the Smart2 and Smart AR, such as a Smart Revolver and Smart Shotgun.
Safety First Arms will sell their guns direct to consumer, direct to institution/large retailer, and through distributors. Direct to consumer has a $1,395 MSRP, revenue through direct to institution channel is $1,086 and revenue through a distributor is $1,036. The total COGS for each revenue channel is $550.75.
- Over $1M in pre-orders already received
- The Glock Store of San Diego, CA has an initial PO of $518,000, 500 units of Smart 2
- Gunther Gun Shop of Carlsbad, CA has a future commitment of approximately 500 units of Smart 2 for first year or $543,000 estimated sales projection
- Poway Weapons and Gear in Poway, Ca has a commitment to carry Smart 2 and Smart AR when ready
*Source: Company provided in attached documents
Senior Management Team
|Robert Allan||Brian Weinberg|
- Marshall Waters II – Alton Consulting Group, Advisor: Startup Plan
- Lenny Magill – CEO of GlockStore, Advisor: Retail, Distribution, Product
While management does have significant business experience, they have little direct experience in the firearms industry, including manufacturing at scale, supply chain management or marketing and sales. There are no independent board members.
TAM (Total Addressable Market):
- 35M current gun owners would consider purchasing a smart or childproof gun
- 105M non-gun owners would consider purchasing a smart or childproof gun
*Souce: Portal Page in Provided Documents
The firearms industry is large and has experienced significant growth over the last few years, including sales of firearms to people who may otherwise be unused to firearms and thus prone to accidents. Public awareness of and concern about firearm accidents has lead to many companies trying to build a “safe” firearm, however, most efforts have failed for a variety of reasons. There is also considerable resistance within the firearms industry to “safe” firearms over concerns about reliability and public perception that guns are not otherwise “safe.” A company that can produce and sell a firearm that can overcome these issues may be able to succeed.
The company’s product seems to be unique because it combines the elements of an external safe with a keypad lock within the actual firearm. Most other competitors are external devices such as trigger locks or gun safes. Other companies that have tried to incorporate safety features such as fingerprint or RFID into the gun itself have failed to date.
Revenue to date: $0
Revenue Last Fiscal Year: $0
Previous Funds Raised: $0
Use of Funds
- Complete development
- Produce beta guns for testing and marketing
- Prepare business entity for sales transactions
- Develop and launch website
- Soft-launch with a web based pre-sale campaign
Due to the highly competitive nature of the firearms industry, large companies often seek to acquire successful technologies that provide differentiation. If the company is able to prove the reliability of its products, it may be an acquisition candidate.
Expert Opinion Summary
The firearms industry is highly competitive, heavily regulated and risk adverse about new technology adoption. While a reliable “safe” firearm would likely be well received by the public, previous attempts have failed and no major firearms manufacturer is pursuing such technology currently. In addition, the company’s valuation is extremely high considering they have no revenue and state they have no expectation of revenue for a considerable period of time. While management seems to have a great deal of experience in business in general, they have little or no direct experience with firearms manufacturing, sales or marketing.
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