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Jake Fisher

Monday Motorbikes

By | Due Diligence | No Comments

Company Overview –

Their mission is to create a uniquely attractive, fully electric motorbike for urban transport, that is simple to operate, fun to drive & desirable to own.
*Souce: AngelList

Company Investment
Name: Monday Motorbikes Minimum Raise: $50K
CEO: Josh Rasmussen Maximum Raise: $1M
Company Founded: 2010 Structure of Raise: Common Stock
Location: Brisbane, CA Valuation: $20M pre-money valuation
Crowdfunding Portal: Start Engine Minimum Investment: $150
Crowdfunding Link: https://www.startengine.com/startup/monday-motorbikes  
Website: https://mondaymotorbikes.com/  

Review Overview

Positives Risks and Reservations
No license required for operation in most U.S. States High entry cost for consumers at $5,995, entry level traditional mopeds start around $3,500
Perks include significant credits towards the purchase of a motorbike 40-mile range in economy mode at 20 mph, sport mode allows the rider to reach upwards of 40mph but is recommended for off-road use only.
Battery prices have been declining rapidly over the last 4 years making electric vehicles more affordable $20M valuation based off of previous SAFE notes issued, but less than $500k has been invested. Previous SAFEs issued included a 20% discount while this offering does not.
Patented battery and theft-deterrent system $30,000 of the raise will go towards expenses incurred due to the crowdfund round.
No gears or clutch to operate, making an easy learning curve for new riders Company is not currently generating revenue but has collected $240,987 in deposits

Problem

Getting around in a city can be challenging. Cars are expensive, hard to park and cause traffic jams. Buses are slow, unreliable, and also get stuck in traffic. Motorcycles are heavy and require a special license. Bicycles are limited by human power and require effort.

Solution

Current:
Monday Motorbikes created the M1, an electric motorbike that people can ride virtually anywhere a bicycle or motorcycle can. The M1 is simple to use, doesn’t need a clutch or gears, and you don’t need a special license to ride it.

Long Term:
Over the next 5 years, they plan to utilize offshore manufacturing assistance to increase production to over 100,000 units and improve margins. They will also focus on enhancing global distribution while maximizing production output.

Business Model

Monday Motorbikes sells their bikes direct to consumer, through a dealer network, and are working on developing a business to business channel. They expect the majority of the sales to be either direct to consumer or through a dealer network. The retail price for the M1 is $5995.

Traction

  • Intel partnership established with loT groups
  • #1 spot in GQ “Best Stuff of the Year” (2015)
  • 330,000 website visitors from 5 continents, 146 countries
    *Source: Company provided on crowdfunding campaign website

Senior Management Team

  Josh Rasmussen Dr. Nathan Jauvtis Sarah Rizk
Position: CEO & Co-Founder Co-Founder & Chief Scientist COO
Ownership Percent: 11.5% 69.56% N/A
Linkedin: https://www.linkedin.com/in/joshrasmussen/ https://www.linkedin.com/in/jauvtis/ https://www.linkedin.com/in/sarah-rizk-53607411/

Summary:
Co-Founder Nathan Jauvtis has a significant tract record as a design engineer, along with a a PHD in Mechanical Engineering from Cornell University. CEO Josh Rasmussen has previous founder experience at his last venture ZipKick as well as previous roles in sales.

One interesting note is board member Zachary Levenberg is currently an Electronic Design Engineer for Tesla. The team seems to be well rounded and off to a great start with its board.

Market Analysis

Industry: Transportation

TAM (Total Addressable Market): $311B
*Souce: Portal Page

Driving Trends: The market for electric vehicles is growing at 60% a year
*Source: portal page

Industry Opinion:
Urban commuters have shown a desire for additional transportation options and the recent trend has been towards electric options vs. gas. With the cost of batteries significantly becoming more affordable in recent years, the entry point for electric vehicles have now entered into an affordable range. Although the price of the Monday Motorbike is still significantly higher than a traditional gas moped, the continued decline in costs of battery technology will benefit the industry.

Although Monday Motorbikes states their total available market as $311B, that is the entire global transport industry. The $16B e-bike industry is a more accurate depiction of the total industry.

Competition

Differentiator:
Monday Motorbikes has developed a patented battery and theft-deterrent system that addresses a previous major issue to e-bikes given the high value of the batteries. The sport mode on the M1 which allows the bike to reach upwards of 40 mph is also a major differentiator in the industry.

Main Competitors

  Zero Motorcycles Inc Brammo Outrider USA Voltbike
Funds Raised $64.66M $70M N/A N/A
Website http://www.zeromotorcycles.com/ https://www.brammo.com http://outriderusa.com/ http://www.voltbike.ca/

Company Financials

Revenue Last Fiscal Year: $3,451 (2015)

Previous Funds Raised:
The company has raised money through a SAFE round. They raised $365,000 at a $15 million valuation cap and a 20% discount, $30,000 at a $16.5 million valuation cap and a 20% discount, and $50,000 at a $18.5 million valuation cap and a 20% discount.

Use of Funds

  • Selling
  • General
  • Administrative
  • Working capital
  • Purchase inventory and material to produce motorbikes

Exit Opportunities

The acquisition of Brammo Electric Motorcycle by Polaris in 2014, shows the major manufacturers have taken notice of the newly developing electric bike and motorcycle trend. Brammo had previously raised $50M+ in capital prior to being acquired with a majority coming from Polaris

Recent Acquisitions in the Field

Date Company Acquired Acquired By Amount
2014 Brammo Electric Motorcycle Polaris Unknown

Expert Opinion Summary

Monday Motorbikes will be an interesting to watch as they evolve. Currently, the cost of entry is significantly higher than alternative options but as with many vehicle companies at similar stages the costs to produce tends to drop significantly as production increases. The valuation is certainly significant given the lack of revenue and it is disappointing that previous SAFES issued by the company included a 20% discount when this offering does not.

I would evaluate this company as being a hybrid of the traditional rewards based crowdfunding and equity crowdfunding. If your intent is to preorder an M1, this is an exciting deal with a $500 investment getting a $500 credit towards an M1 purchase. A $2,000 investment gets a $1,000 credit. By looking at this offering as more of a preorder with a bonus of receiving equity, there are a lot of appealing qualities. If evaluating this purely as an investment, concerns of valuation and offering terms could be more prominent.

AngelList: https://angel.co/mondaymotorbikes
Crunchbase: N/A

Disclaimer

Crowdfund Research is a publisher and does not offer investment advice to any specific individual.  Crowdfund Research and its authors do not receive any compensation for the due diligence reports. 
 Crowdfund Research and its authors do not offer investment advice, nor do we endorse or recommend investments in any company or the suitability of an investment for any particular investor. Crowdfund Research is not registered as a broker-dealer or financial or investment advisor and does not provide any services requiring such registration. The information in this report or on our website regarding any company is based on publicly available information or directly from the subject company.  Crowdfund Research makes no representation or warrant as to the adequacy, accuracy or completeness of such information. Any opinions or forecasts expressed herein are our own, are not intended as investment advice and are subject to change without notice. This report has been prepared solely for informative purposes and is not a solicitation of an offer to buy or an offer to sell any security.
This report or the posting of information on our website regarding any company, including any links to information on our website, should not be construed as an endorsement or recommendation of that company for any purpose whatsoever.  This report does not take into account the investment objectives, financial situation or needs of any particular investor, and each investor should consider whether any investment opportunity is appropriate given their investment objectives and current financial circumstances. Any person considering any investment in any equity crowdfunding investment whatsoever is encouraged to consult with their own investment or financial advisor, tax advisor and/or attorney beforehand.
All investments entail risk. The companies on our site are generally small or early stage companies and are subject to risks inherent in investing in any small or early stage company as well as other risks specific to their business and operations. In addition, securities of these companies may be highly illiquid, requiring that they be held for an indefinite period of time or have a limited market for resale. Therefore, no one should invest in any of these companies unless they have no need for liquidity of their investment and can sustain a total loss of their investment.  You should only invest an amount of money that you can afford to lose without changing your lifestyle.
You should thoroughly review the complete offering materials for any investment opportunity, particularly all risk factors, prior to investing in any offering and become familiar with the investor requirements, investment limits and your ability to resell the investment.  

Pedal Anywhere

By | Due Diligence, Featured | No Comments

Company Overview –

Pedal Anywhere is a bike rental company in Seattle and Friday Harbor, WA. They offer quality bikes, low rates, and free on demand delivery.
*Souce: seedinvest

Company Investment
Name: Pedal Anywhere Minimum Raise: $100K
CEO: Zach Shaner Maximum Raise: $750K
Company Founded: 2013 Structure of Raise: Crowd Note, 20% Discount
Location: Seattle & Friday Harbor, WA Valuation: $3M Valuation Cap
Crowdfunding Portal: seedinvest Minimum Investment: $500
Crowdfunding Link: https://www.seedinvest.com/pedal.anywhere/pre.seed  
Website: http://pedalanywhere.com/  

Review Overview

Positives Risks and Reservations
$196k revenue to date from 2,300 customers and steadily growing Seasonal affected business
Terms include 20% conversion discount and 6% interest Target market is confined to major metropolitan cities
Targeting both B2C & B2B. B2B corporate accounts could provide steady revenue $50-100k per city expansion cost
Bootstrapped up until this point Currently only servicing Seattle

Problem

Traveling with your bicycle is prohibitively expensive and requires technical assembly knowledge, so most travelers leave their bikes at home.

Solution

Current:
Pedal Anywhere solves these problems by providing high-quality bikes that are fully customizable for a rider’s desired accessories, size, and style. By delivering them on demand and operating 7 days per week, they remove the traditional pain points that travelers experience when trying to locate an adequate rental shop in an unfamiliar city.

Long Term:
Pedal Anywhere has near-term expansion goals to Portland, San Francisco, & Vancouver BC. They have medium-term expansion goals to Denver, San Diego, Austin, Chicago, Toronto, Montreal, Boston, New York, Philadelphia, & Washington DC. Pedal Anywhere is also pursing partnership opportunities with colleges and universities to provide student rental bikes, corporate fleets, and municipal governments.

Business Model

The mission of their business model is to harness economies of scale to earn 10x in revenue per year over the capital cost of each bike. Their goal is to utilize periodic resale of the bikes to obtain profitable capital replacement so that once each city’s fleet is at scale, ongoing capital inputs are effectively free and the product is always new.

Rental rates range from $39-$449.

Traction

  • 2,350 customers
  • $196K in revenue
  • $84 of revenue per customer
  • $131 of revenue per transaction
  • Number 2 & 3 organic SEO in Seattle
  • 55% bootstrap income growth YOY
    *Source: Company provided on crowdfunding campaign website

Senior Management Team

  Zach Shaner Lucas Nivon
Position: CEO & Co-Founder Co-Founder & Advisor
Ownership Percent: 75.5% 24.5%
Linkedin: https://www.linkedin.com/in/zach-shaner-b0878820 https://www.linkedin.com/in/lucasnivon

Summary:
CEO Zach Shaner has done an excellent job bootstrapping the company up to this point. Lucas Nivon was the original founder but brought Zach on in 2013 to take over while Lucas pursued another business opportunity. Lucas remains an advisor that meets with the company monthly.

Zach is a first time Founder/CEO with prior experience in marketing and journalism. Although 1st time founders are always a gamble, Zach seems to be generating success. I think finding an additional experienced advisor or two would be highly beneficial to help with growth and ease learning curves.

Market Analysis

Industry: On-Demand Services

TAM (Total Addressable Market): $10M in Seattle, $21M in San Francisco
*Souce: Portal Page in Pitch Deck

Driving Trends:
Multiple cities have seen huge cycling growth since 2000. +306% in Portland, +234% in DC, +161% in Denver, +97% in Seattle

Industry Opinion:
With the population shifting and migrating to larger cities, transportation will be a continually growing market. The two major limitng factors with the bike rental model is the seasonitly effect from the weather, along with limiting the TAM to major metropolity cities. While this does reduce the overall TAM, the market is still quite large and other startups like UBER have been quite successful with these demographics.

Competition

Differentiator:
Pedal Anywhere differentiates from it competition with consistency of the quality of their bikes along with on-demand service eliminating any barriers to entry for their customers.

Main Competitors:
Pedal Anywhere believes their primary competitors are local bike shops and subsidized bike-share schemes. Each cities competitors will be different. They also believe instant delivery companies already at scale (Amazon, Postmates, Spinlister) could potentially be competitors if they pivot into their market.

Company Financials

Revenue to date: $196K

Revenue Last Fiscal Year: $94,293 (2016)

Previous Funds Raised: $0

Use of Funds

If the target amount is raised:

  • Executive compensation (18.7%)
  • Manager compensation (10.7%)
  • Fleet bicycles (20%)
  • Warehouse leasing (16%)
  • Tools, supplies, accessories (3.3%)
  • Delivery vehicles (3.3%)
  • Commercial insurance (2%)
  • Marketing (6.7%)
  • Bicycles maintenance (4%)
  • Debt service (0.7%)
  • Legal & licensing (6.6%)
  • Web & brand design services (3%)
  • Other (5%)

Exit Opportunities

With the model only proven in Seattle, Pedal Anywhere still has a long road before potential acquisitions. In their marketing plan, Pedal Anywhere acknowledges their intentions of partnering with other instant-delivery services with the intent of possibly being acquired. This mentality is always a good sign that the CEO is strategically looking to the future.

Recent Acquisitions in the Field

Date Company Acquired Acquired By Amount
May 2, 2016 CallAtHome DriveU Unknown
Nov. 9, 2015 Pickingo Shadowfax Technologies Unknown

Expert Opinion Summary

Pedal Anywhere has built a great business with excellent fundamentals. The $3M value cap that is offered appears fair, especially when compared to other recent crowdfunding offerings. One downside of the Crowd Note that is being offered, is that unlike a traditional SAFE or Convertible Note, the Crowd Note does not convert until an exit. This brings up an issue in the circumstance if Pedal Anywhere raises an additional round below a $3M valuation. Traditionally, investors in a SAFE or Convertible Note would convert at the valuation raised under $3M, not dependent on the exit valuation. In this circumstance, the upside potential is reduced for investors of the Crowd Note.

Pedal Anywhere has proven their concept in Seattle, but the cost of $50-100k per city to expand will require significant funding to scale at a mass rate. The company plans to use proceeds from this raise for near-term expansion to San Francisco, Portland and Vancouver. Scaling beyond just Seattle will add logistical difficulty for management, an advisor with experience in scaling an instant delivery business would be a reassuring addition.

Another player in the bike rental space Spinlister is a closer competitor than given credit. Splinlister takes an AirBnB approach to bike sharing, while Pedal Anywhere has chosen a model similar to UBER. Although these models are very different, they both offer the result of a rented bike. Pedal Anywhere is convinced that by offering a consistent product experience and instant delivery the UBER model offers a superior customer experience for bike rental.

I think the direction Pedal Anywhere is exploring with adding a B2B model is a great opportunity to provide consistent reoccurring revenue. In 2015 they carried out a Corporate Fleet test contract for $14.4k. They are looking to partner with colleges, larger companies, municipal governments and property management companies. These are all great opportunities to decrease the seasonality effect on revenue.

AngelList: N/A
Crunchbase: N/A

Disclaimer

Crowdfund Research and its authors do not offer investment advice, nor do we endorse or recommend investments in any company or the suitability of an investment for any particular investor. Crowdfund Research is not registered as a broker-dealer or financial or investment advisor and does not provide any services requiring such registration. The information in this report or on our website regarding any company is based on publicly available information or directly from the subject company.  Crowdfund Research makes no representation or warrant as to the adequacy, accuracy or completeness of such information. Any opinions or forecasts expressed herein are our own, are not intended as investment advice and are subject to change without notice. This report has been prepared solely for informative purposes and is not a solicitation of an offer to buy or an offer to sell any security.
This report or the posting of information on our website regarding any company, including any links to information on our website, should not be construed as an endorsement or recommendation of that company for any purpose whatsoever.  This report does not take into account the investment objectives, financial situation or needs of any particular investor, and each investor should consider whether any investment opportunity is appropriate given their investment objectives and current financial circumstances. Any person considering any investment in any equity crowdfunding investment whatsoever is encouraged to consult with their own investment or financial advisor, tax advisor and/or attorney beforehand.
All investments entail risk. The companies on our site are generally small or early stage companies and are subject to risks inherent in investing in any small or early stage company as well as other risks specific to their business and operations. In addition, securities of these companies may be highly illiquid, requiring that they be held for an indefinite period of time or have a limited market for resale. Therefore, no one should invest in any of these companies unless they have no need for liquidity of their investment and can sustain a total loss of their investment.  You should only invest an amount of money that you can afford to lose without changing your lifestyle.
You should thoroughly review the complete offering materials for any investment opportunity, particularly all risk factors, prior to investing in any offering and become familiar with the investor requirements, investment limits and your ability to resell the investment.  

Aido (InGen Dynamics, Inc.)

By | Due Diligence | No Comments

Company Overview –

Aido is an interactive personal home robot. He’s an all-in-one package that comes with the best of home automation, security, assistance, entertainment and much more.
*Souce: Start Engine

Company Investment
Name: Ingen Dynamics inc. Minimum Raise: $50K
CEO: Arshad Hisham Maximum Raise: $1M
Company Founded: July 2015 Structure of Raise: Common Stock
Location: Palo Alto, CA Valuation: $12M Pre-Money Valuation
Crowdfunding Portal: Start Engine Minimum Investment: $141
Crowdfunding Link: https://www.startengine.com/startup/aido  
Website: http://www.aidorobot.com/  

Review Overview

Positives Risks and Reservations
$900k in pre-orders Ingen Dynamics does not currently have a working prototype of Aido.
Common stock in this offering includes voting rights InGen Dynamics has repeatedly pushed the shipping date of the product
Company has established a 20% employee option pool Outstanding SAFE issued for $10,000 with a valuation cap of $2.5M and 20% discount that has yet to be converted and will cause further dilution upon conversion.
Aidohas received multiple press acknowledgements Ingen Dynamics has yet to file for provisional patents but claims they are in the process of filing.
Ingen Dynamics received payment from the indegogo campaign and has yet to fill the orders. As 2016 financials were not disclosed with this offering it is unknown if the capital has been spent leaving a liability for unfilled orders.

Problem

Currently, home robots are expensive and aren’t able to do all the tasks consumers want them to do.

Solution

Current:
InGen Dynamics will build a useful, affordable and advanced home robot, Aido. Aido can do everything from keeping your home secure to recognizing each family member and adjusting to their preferences.

Business Model

InGen Dynamics charges $1,499 for an Aido robot.

Traction

  • $800,000+ in pre-orders
  • Recipient of multiple awards including T3 Gamechanger of 2016
  • $900,000+ raised on Indiegogo & ranked #2 of the most successful home robot campaigns of all time
  • Invited by Walt Disney to be showcased at their global innovation campus
  • Recognized by major industry associations including IEEE, Boston Consulting Group, and Robo-Business
  • Three functional prototypes complete and a functional SDK released to early developers
  • Featured in major global research reports on Security and Home Robotics
    *Source: Company provided on crowdfunding campaign website

Senior Management Team

  Arshad Hisham Anurag Pal
Position: CEO & Founder CFO
Ownership Percent: 98.5% N/A
Linkedin: https://www.linkedin.com/in/arshadhisham https://www.linkedin.com/in/anurag-pal-067aa

Summary:
Arshad is a frequent presenter on the topic of robotics and has previously held senior roles at IBM, the Government of Australia, and Toyota. CFO Anurag Pal is currently the CEO of Escalon as well as CEO of Accelcia Business Services according to his LinkedIn profile. Along with the two core members, Ingen also lists 3 other engineers as team members on their portal page.

Market Analysis

Industry: Consumer & Business Robots

TAM (Total Addressable Market): $1.5B by 2019
*Souce: Portal Page

Driving Trends: Service robotics market growth from $5.6B in 2014 to $22.5B in 2021 at an 18.8% CAGR

Industry Opinion:
Along with the boom of the IoT industry, the technology advancements in robotics are just starting to scratch the surface of the potential. With the recent success of the Amazon Echo and Google Home Assistant, consumers have expressed a desire to adopt home automation. If done correctly and Aido performs as well as promised, they could have a success. One thing to consider would be if the consumers are actually wanting a physical robot in their home vs. a bookshelf sized speaker that can accomplish many of the same features that are currently avaialble from Amazon or Google.

Competition

Differentiator:
Aido offers additional features at a substantially lower price point than its competitors.

Main Competitor

  Jibo Buddy Pepper Amazon Echo
Funds Raised $70.4M $658,102 (Indiegogo) $236M N/A
Website https://www.jibo.com http://www.bluefrogrobotics.com/en/home/ https://www.meetpepper.com https://www.amazon.com/dp/B00X4WHP5E

Company Financials

Revenue to date: $0

Revenue Last Fiscal Year: $0

Previous Funds Raised: $900,000+ from Indiegogo

Use of Funds

  • Commercialize Aido
  • Fulfill crowdfunding product orders
  • Continue ecosystem engagement
  • Hire & grow the Aido team

Exit Opportunities

As the home robotics industries is just starting to evolve, numerous companies could be interested in acquiring the Aido technology if successful. A major key for Ingen Dynamics will hinder on the ability to patent their technology. As Ingen is still in the process of filing for provisional patents the only current company value is the promotion they have been able to generate for the brand Aido along with the development team.

Recent Acquisitions in the Field

Date Company Acquired Acquired By Amount
June 25, 2015 Universal Robots Teradyne $285M
Dec. 4, 2013 Redwood Robotics Google Unknown
Dec. 2, 2013 Schaft Google $20M

Expert Opinion Summary

Accomplishing $900k in preorders on indegogo is certainly an impressive feat. Ingen Dynamics has included many deal terms that are common in VC rounds but often lack in Crowdfunding rounds like voting rights, liquidation preferences and an established employee options pool.

My main concern is that Aido is still very much a concept and the company does not have a working prototype. The company claims to be shipping current preorders by late 2017 but that has already been pushed back from earlier promised dates to their indegogo backers. With Ingen only publishing financials from 2015 it is unknown if the capital raised from the indegogo campaign has already been spent on R&D. If this capital has already been spent, it could create a large liability for the company. The liability concern is validated by a handful of unhappy indegogo backers that have voiced growing impatience due to the shipping date being pushed back. Although the concept video is certainly impressive, there are multiple concerns that should be considered prior to investing in Ingen Dynamics.

AngelList: N/A
Crunchbase: N/A

Disclaimer

Crowdfund Research and its authors do not offer investment advice, nor do we endorse or recommend investments in any company or the suitability of an investment for any particular investor. Crowdfund Research is not registered as a broker-dealer or financial or investment advisor and does not provide any services requiring such registration. The information in this report or on our website regarding any company is based on publicly available information or directly from the subject company.  Crowdfund Research makes no representation or warrant as to the adequacy, accuracy or completeness of such information. Any opinions or forecasts expressed herein are our own, are not intended as investment advice and are subject to change without notice. This report has been prepared solely for informative purposes and is not a solicitation of an offer to buy or an offer to sell any security.
This report or the posting of information on our website regarding any company, including any links to information on our website, should not be construed as an endorsement or recommendation of that company for any purpose whatsoever.  This report does not take into account the investment objectives, financial situation or needs of any particular investor, and each investor should consider whether any investment opportunity is appropriate given their investment objectives and current financial circumstances. Any person considering any investment in any equity crowdfunding investment whatsoever is encouraged to consult with their own investment or financial advisor, tax advisor and/or attorney beforehand.
All investments entail risk. The companies on our site are generally small or early stage companies and are subject to risks inherent in investing in any small or early stage company as well as other risks specific to their business and operations. In addition, securities of these companies may be highly illiquid, requiring that they be held for an indefinite period of time or have a limited market for resale. Therefore, no one should invest in any of these companies unless they have no need for liquidity of their investment and can sustain a total loss of their investment.  You should only invest an amount of money that you can afford to lose without changing your lifestyle.
You should thoroughly review the complete offering materials for any investment opportunity, particularly all risk factors, prior to investing in any offering and become familiar with the investor requirements, investment limits and your ability to resell the investment. 

Flipword

By | Due Diligence | No Comments

Company Overview –

FlipWord created a chrome extension that teaches language by integrating learning into everyday activities.
*Souce: Republic

Company

Investment

Name: FlipWord Minimum Raise: $50K
CEO: Thomas Reese Maximum Raise: $500K
Company Founded: July 2015 Structure of Raise: Crowd Safe, 20% Discount
Location: Palo Alto, CA Valuation: $5M Valuation Cap
Crowdfunding Portal: Republic Minimum Investment: $20
Crowdfunding Link: https://republic.co/flipword  
Website: https://flipword.co/  

Review Overview

Positives Risks and Reservations
6,000 beta users with 50% retention rate on free accounts Currently the product is only available as a Chrome extension, Mobile app is targeted for release in 3 months.
$5B online language learning market Pre-revenue startup
Founders previous experience includes Facebook and Amazon Proposed business model where the paying customers are incentivized to cancel their subscription due to lack of activity. This could lead to a very high churn rate when monetized.

Solves a common problem

FlipWord is utilizing gamification which is a hot trend in the education market.
FlipWord is based in Palo Alto

Problem

Language educators and app developers have been scrambling to increase the effectiveness of their lessons by making learning more fun. Knowledge fades and review habits don’t stick.

Solution

Current:
FlipWord integrates effortless language learning into web browsing. They have created a chrome extension (and soon mobile app) that intelligently and automatically replaces a few words with the language you want to learn on every English web page, as you casually browse.

Long Term:
Their next steps are to improve the learning system, connect learners, release a mobile app, and market experiments.

Business Model

FlipWord plans to charge users only for the days they don’t use FlipWord. Users that use FlipWord daily receive a completely free experience. Each user subscription will renew on a monthly basis. By doing this they build a committed, consistent, and engaged user base.

Traction

  • 6,000+ signed-up users for beta with over 50% user retention
  • Top prize at the University of Illinois Urbana Champaign (UIUC) Cozad New Venture Competition
    *Source: Company provided on crowdfunding campaign website

Senior Management Team

  Thomas Reese Yinghua Yang
Position: CEO, CTO COO, CDO
Ownership Percent: 70% 30%
Linkedin: https://www.linkedin.com/in/reeset https://www.linkedin.com/in/yangyinghua

Summary:

Both candidates are technical founders which is always a great benefit not having to rely on outside developers. Yinghua Yang adds additional credibility to the project with her background as a Masters Student pursuing her degree in Teaching English as a Second Language. Although it’s great to have technical founders, it would be more reassuring to have a core founder with business or CEO experience.

Market Analysis

Industry: Language Industry

TAM (Total Addressable Market): $5B
*Souce: Portal Page, Pitch Deck

Industry Opinion:
The online language learning industry does have some well-established competition, none have implemented technology or artificial intelligence to the extent that FlipWord has. The market is quite large enough to accommodate competition. Companies looking to make education more efficient are always highly encouraged and often benefit from grants that are available to help support research and development.

Competition

Differentiator:
The FlipWord system intelligently selects the best words to replace in your browsing to improve comprehension and language retention. The competition uses random word selection which has proven to have less retention in language learning.

Main Competitor

  Duolingo Rosetta Stone Memrise
Funds Raised $83.3M N/A $6.28M
Website https://www.duolingo.com/ http://www.rosettastone.com/ https://www.memrise.com/

Company Financials

Revenue to date: $72

Revenue Last Fiscal Year: $72 (2016)

Previous Funds Raised: $0

Use of Funds

  • Intermediary Fees
  • Estimated Attorney Fees
  • Estimated Accountant/Auditor Fees
  • Campaign Marketing Expenses
  • Marketing
  • Research & Development
  • Equipment
  • Future Wages
  • General Working Capital

Exit Opportunities

The industry powerhouse Rosetta Stone has previously acquired new technology that aids in the language learning process. FlipWord could become an attractive acquisition target if they are able to generate enough users to show data added efficiency.

Recent Acquisitions in the Field

Date Company Acquired Acquired By Amount
Dec. 11, 2013 Tell Me More Rosetta Stone $28M
July 25, 2013 Lexia Learning Systems Rosetta Stone $22.5M
April 2, 2013 Livemocha Rosetta Stone $8.5M
April 25, 2012 GoGo Lingo Rosetta Stone Unknown

Expert Opinion Summary

FlipWord has created a solution to a problem with a significant addressable market. While they do have 6,000 beta users, they have yet to monetize the platform and it’s unknown how many can be converted to paying customers. FlipWord is still very much in the proof of concept stage and true adoption levels hinder on the success of their upcoming mobile app. I think that success of FlipWord is highly dependent on their ability to execute the success of their future mobile app. I think it would also be highly beneficial for FlipWord to test and determine what percentage of free users they are able to convert to paid.

AngelList: N/A
Crunchbase: https://www.crunchbase.com/product/flipword#/entity

Disclaimer

Crowdfund Research and its authors do not offer investment advice, nor do we endorse or recommend investments in any company or the suitability of an investment for any particular investor. Crowdfund Research is not registered as a broker-dealer or financial or investment advisor and does not provide any services requiring such registration. The information in this report or on our website regarding any company is based on publicly available information or directly from the subject company.  Crowdfund Research makes no representation or warrant as to the adequacy, accuracy or completeness of such information. Any opinions or forecasts expressed herein are our own, are not intended as investment advice and are subject to change without notice. This report has been prepared solely for informative purposes and is not a solicitation of an offer to buy or an offer to sell any security.
This report or the posting of information on our website regarding any company, including any links to information on our website, should not be construed as an endorsement or recommendation of that company for any purpose whatsoever.  This report does not take into account the investment objectives, financial situation or needs of any particular investor, and each investor should consider whether any investment opportunity is appropriate given their investment objectives and current financial circumstances. Any person considering any investment in any equity crowdfunding investment whatsoever is encouraged to consult with their own investment or financial advisor, tax advisor and/or attorney beforehand.
All investments entail risk. The companies on our site are generally small or early stage companies and are subject to risks inherent in investing in any small or early stage company as well as other risks specific to their business and operations. In addition, securities of these companies may be highly illiquid, requiring that they be held for an indefinite period of time or have a limited market for resale. Therefore, no one should invest in any of these companies unless they have no need for liquidity of their investment and can sustain a total loss of their investment.  You should only invest an amount of money that you can afford to lose without changing your lifestyle.
You should thoroughly review the complete offering materials for any investment opportunity, particularly all risk factors, prior to investing in any offering and become familiar with the investor requirements, investment limits and your ability to resell the investment. 

Swannies

By | Due Diligence | No Comments

Company Overview –

Swannies is a modern lifestyle brand for casual golfers.
*Souce: Crunchbase

Company Investment
Name: Swannies Minimum Raise: $100K
CEO: Matt Stang Maximum Raise: $400K
Company Founded: October 15, 2014 Structure of Raise: Crowd Note
Location: Minneapolis, MN Valuation: $2.5M Valuation Cap, 20% Discount
Crowdfunding Portal: SeedInvest Minimum Investment: $500
Crowdfunding Link: https://www.seedinvest.com/swannies/seed  

Website: https://swannies.co/

 

Review Overview

Positives Risks and Reservations
Large target demographic Competing against large apparel manufacturers including public companies.
Affordable products Although Swannies is showing a gross profit in 2016 the members of management are not currently receiving paid compensation.
Growing Revenues Founders lack startup experience
Attractive margins of 45-65% Products are not proprietary
Crowd note that includes a 20% conversion discount and 5% interest rate Relatively low prior revenue at $70,125 for Jan 1, 2016 through November 1, 2016
Business model that relies on tying up a significant amount of capital in inventory

Problem

Golfers, especially millennials are put off by the high prices tag, outdated designs, and limited use of existing golf apparel.

Solution

Current:
Swannies has created a lifestyle apparel brand that provides a fresh alternative. They use modern designs that can be worn anytime and have affordable prices that appeal to millennials.

Long Term:
They want to increase pro shop traction in 2017 which they hope will build a customer base for retail and online expansion in 2018

Business Model

Swannies sells golfing apparel direct to consumer online, as well as wholesale to 3rd party retail locations with a current emphasis on golf course pro shops. Swannies has retail gross margins around 65% and wholesale gross margins around 45%. Their products retail prices range from $20-$59.

Traction

  • Sold to 15 golf courses in 2015
  • Approximately 69 orders for 2016
  • Expect 200 orders in 2017*Source: Company provided on crowdfunding campaign website

Senior Management Team

  Matt Stang Adam Iversen Sam Swanson
Position: Co-Founder/CEO Co-Founder/COO Co-Founder
Ownership Percent: 38.4% 19.1% 15.5%
Linkedin: https://www.linkedin.com/in/matt-stang-b9157125 https://www.linkedin.com/in/adamiversen N/A

Advisors:

Tom Johnson – Handshake Retail Sales Solutions

Rick Nordvold – Ex-CFO, Golf Galaxy

Toby Nord – Director, Ventures Enterprise at University of Minnesota

Summary:
The founders certainly have a passion for their industry and the game of golf. Although the management team certainly has enthusiasm, they have limited very limited prior startup or professional experience. The team has put together a strong backing of advisors including the former CFO of Golf Galaxy and the director of the Ventures Enterprise program at the University of MN.

Market Analysis

Industry: Golf Apparel Industry

TAM (Total Addressable Market): $1.7B by 2019 (U.S.)
*Souce: SeedInvest

Driving Trends: 4.3% CAGR

Industry Opinion:
The apparel industry is extremely competitive and Swannies is going up against well-established and large corporations. With targeting the golf apparel industry Swannies will also have to contend with the seasonality factor. Going into the market with the value proposition of being “Cool” and low cost will be a challenge to maintain. The golf apparel industry is quite substantial and there certainly is room to carve out a niche market but the marketing spend needed to reach consumers and stay relevant will not come cheap.

Competition

Differentiator:
Swannies differentiates their products by being significantly lower priced than the competition as well as being more appealing to the Millennial consumer.

Main Competitors:

  Travis Matthew Under Armour Nike FootJoy Adidas
Market Cap N/A $11.74B $88.17B N/A $32.79B
Website https://www.travismathew.com/ https://www.underarmour.com/en-us/ http://www.nike.com/us/en_us/ http://www.footjoy.com/ http://adidasgolf.com/

Company Financials

Revenue to date: $80,535 (through 11/1/16)

Revenue Last Fiscal Year: $10,409 (2015)

Previous Funds Raised: $27,500, pre-seed, January 2015

Use of Funds

If minimum amount is raised:

  • 55% golf course sales & inventory expenses
  • 25% salaries & compensation
  • 20% offering expenses

If maximum amount is raised

  • 44% golf course sales & inventory expenses
  • 24% salaries & compensation
  • 12% SKU expansion & other inventory
  • 10% brand awareness growth
  • 10% offering expenses

Exit Opportunities

Given enough sales and consumer adoption Swannies could be considered an interesting acquisition for one of the major golf equipment brands looking for ways to reach a younger demographic. OGIO’s recent acquisition gives us a great comparison tool to assess a value for Swannies. OGIO reported EBITDA estimates of $9M for 2016. With being acquired for $75.5M their valuation was 8.4 times EBITDA. Swannies disclosed a projected EBITDA of $20,980 for 2016. From this, we could calculate a current valuation for Swannies around $176,000, which is dramatically different than the $2.5M valuation cap with this offering.

Recent Acquisitions in the Field

Date Company Acquired Acquired By Amount
Jan, 11, 2017 OGIO International Callaway Golf $75.5M
November 2008 Ashworth Inc. TaylorMade-Adidas Golf $20.7M

Expert Opinion Summary

Lifestyle apparel companies are numerous and in general is an overcrowded industry. Establishing a brand and relying on that brand to sell product is a very challenging business model. Golf apparel lines traditionally rely heavily on professional sponsorships to market their brand which can be extremely costly.

Swannies has been granting stock to employees in lieu of compensation in the past and doesn’t currently have any employee compensation budgeted in their projections. This raises concern as eventually the founders and employees will expect to draw a living wage.

When comparing the valuation of Swannies to the recent acquisition of OGIO, the investor is purchasing a lot of blue sky with this offering. Given the stage of the company, debt financing might be more appropriate than the amount of equity they would need to give up for a fair valuation.

AngelList: https://angel.co/swannies
Crunchbase: https://www.crunchbase.com/organization/swannies#/entity

Disclaimer

Crowdfund Research and its authors do not offer investment advice, nor do we endorse or recommend investments in any company or the suitability of an investment for any particular investor. Crowdfund Research is not registered as a broker-dealer or financial or investment advisor and does not provide any services requiring such registration. The information in this report or on our website regarding any company is based on publicly available information or directly from the subject company.  Crowdfund Research makes no representation or warrant as to the adequacy, accuracy or completeness of such information. Any opinions or forecasts expressed herein are our own, are not intended as investment advice and are subject to change without notice. This report has been prepared solely for informative purposes and is not a solicitation of an offer to buy or an offer to sell any security.
This report or the posting of information on our website regarding any company, including any links to information on our website, should not be construed as an endorsement or recommendation of that company for any purpose whatsoever.  This report does not take into account the investment objectives, financial situation or needs of any particular investor, and each investor should consider whether any investment opportunity is appropriate given their investment objectives and current financial circumstances. Any person considering any investment in any equity crowdfunding investment whatsoever is encouraged to consult with their own investment or financial advisor, tax advisor and/or attorney beforehand.
All investments entail risk. The companies on our site are generally small or early stage companies and are subject to risks inherent in investing in any small or early stage company as well as other risks specific to their business and operations. In addition, securities of these companies may be highly illiquid, requiring that they be held for an indefinite period of time or have a limited market for resale. Therefore, no one should invest in any of these companies unless they have no need for liquidity of their investment and can sustain a total loss of their investment.  You should only invest an amount of money that you can afford to lose without changing your lifestyle.
You should thoroughly review the complete offering materials for any investment opportunity, particularly all risk factors, prior to investing in any offering and become familiar with the investor requirements, investment limits and your ability to resell the investment. 

Voyage Media

By | Due Diligence | No Comments

Company Overview –

Voyage is the first creator-owned entertainment studio: a community of writers and producers who create, share, and earn from the art of film and television storytelling. The platform is one part incubator, one part marketplace. They connect ambitious writers with A-list producers to craft market-ready projects.
*Souce: Wefunder

Company

Investment

Name: Voyage Media

Minimum Raise: $100K

CEO: Nat Mundel

Maximum Raise: $1M

Company Founded: 2002

Structure of Raise: Common Stock

Location: Los Angeles, CA

Valuation: $14M pre-money valuation

Crowdfunding Portal: Wefunder

Minimum Investment: $250

Crowdfunding Link: https://wefunder.com/voyage.media

 

Website: https://voyagemedia.com/

 

Review Overview

Positives

Risks and Reservations

40 projects sold

Class B non-voting stock

Steadily growing revenue with $1.3M revenue in 2016

CEO Nat Mundel currently has 100% ownership, other employees have no equity interest in the company

50,000 community members

Net revenue declined from $1,065,156 in 2014 to $998,238 in 2015

4 projects completed, with one of them winning an Emmy

61% of 2015 operating expenses were compensation and benefits

Problem

Hollywood has traditionally been a club for the elite and well-connected. To become successful, it’s all about who you know, not necessarily what you can achieve. Many emerging writers don’t have access to producers or market information.

Solution

Current:

Voyage Media provides emerging writers with a credible way to access producers. They give them access to learn from them, get mentored, and develop market-worthy projects together. Once a project is market ready, Voyage will help get it financed and made.

Long Term:

Their five-year plan is to produce 34 movies, 12 TV shows, create 123,000 direct and indirect jobs and have $2.3B wages paid. In year one they plan to invest $400K in 2 to 3 movies. In year two they expect the size of the movies to increase, and their investment to increase through year 5.

Business Model

Voyage has three revenue streams. Their first revenue stream comes searching and filtering to find great talent and great projects. Their revenue per user is seven times the user acquisition cost. The second stream of revenue comes from their training program and coaching/education products. Voyage also makes money when a project gets made through three phases; in the form of options and intellectual property sale, through producer/executive fees, and if the project is profitable they make a percentage.

Traction

  • 4 film & TV projects produced, one of which won an Emmy.
  • 40 projects sold
  • Community of 50,000+ writers, filmmakers, and 40+ Hollywood producers
  • 30 writers received ongoing paid writing assignments
  • 45+ authors have become bestselling authors
  • Sustained growth and 7-figure revenue
    *Source: Company provided on crowdfunding campaign website

Senior Management Team

 

Nat Mundel

Elizabeth Upton

Erik Beltz

Position:

CEO Operations Manager

Marketing Director

Ownership Percent:

100% 0%

0%

Linkedin:

https://www.linkedin.com/in/nat-mundel-0133315 https://www.linkedin.com/in/elizabethupton

https://www.linkedin.com/in/erikbeltz

Summary:

Founder Nat Mundel has prior founder experience with two other companies. Nat has done a great job building Voyage Media from the ground up to revenues of $1.3M for 2016. Currently, Nat is the sole owner which does bring up some concerns. Having key employees with equity interest provides additional motivation for the company to succeed. Giving employees equity can help keep a startups salary expenses lower as well.

Market Analysis

Industry: Entertainment Industry

TAM (Total Addressable Market): $286B worldwide
*Souce: Portal Page

Driving Trends: Expected to grow 8.8% from 2015-2020

Industry Opinion:

I think the traditional entertainment model is certainly needing disruption and Voyage Media’s solution of crowdsourcing the process could be a viable solution. The film industry can be extremely high-risk, though, as we have all heard about the big box office successes as well as failures. The traditional media giant producers have the advantage of diversifying this risk throughout numerous projects. Voyage Media has an abundance of writers wanting to work but the outputs have been limited to only 4 projects completed since 2012.

Not addressed in the campaign page was how Voyage Media is affected by the major guilds that writers are usually forced to join and pay dues. Gaining traction by increasing the number of projects successfully completed will be a challenge to truly validate Voyage Media in the industry as a key player.

Competition

Differentiator:

Voyage Media focuses on the full project cycle of writing, production, and financing while their competitors focus on facilitating the freelance writing relationship between writers and producers.

Main Competitor

Company Name: Zerply

Funds Raised: $700K

Company Website: https://zerply.com/

Company Financials

Revenue to date: ~$5M

Revenue Last Fiscal Year: $998,238

Previous Funds Raised: N/A

Use of Funds

If maximum amount is raised:

  • Film & TV Production Investments: 40%
  • Marketing & PR: 10%
  • Technology: 10%
  • Staffing Additions: 30%
  • Pay Off Debt: 2.97%
  • Working Capital: 4.63%
  • Offering Fees & Expenses: 2.4%

If minimum amount is raised:

  • Marketing & PR: 30%
  • Technology: 20%
  • Minor Staffing Additions: 26%
  • Offering Fees & Expenses: 24%

Exit Opportunities

Given enough traction Voyage Media could be seen as a potential acquisition target for any of the top movie production companies such as Time Warner, Sony, Disney, NBC Universal to name a few. As many of these companies are public, they will always be looking for ways to innovate and reduce their production expenses for their shareholders.

Voyage also has the opportunity for significant returns if any of their projects becomes wildly successful due to receiving royalties on successful projects.

Expert Opinion Summary

I think that Voyage media has chosen an interesting model in their attempt to disrupt the film industry. The pre-money valuation if $14M is difficult to assess with the lack of similar stage companies in this industry. Although the valuation may seem high when compared to other crowdfunding offerings, the industry is large enough to potentially support an exit substantial enough to justify the valuation. With having generated significant revenue previously, they are certainly proving traction.

With being such a small fish in a big pond, the possibility that Voyage Media could be crushed by the major production companies will certainly be a risk to consider. My main concerns with this offering consist of the structuring of the company and offering. CEO Nat Mundel currently holds 100% of the equity and has not established an options pool for employees and key team members. Option pools of around 15% are very standard requirements in VC backed companies. Potential tax implications for investors should also be taken into consideration with how Voyage Media has currently elected to be taxed. With shares in this offering being class B non-voting shares, Nat will retain 100% voting control of the company and the best interests of outside investors will not be represented in future company decisions.

AngelList: N/A
Crunchbase: https://www.crunchbase.com/organization/voyage-media#/entity

Disclaimer

Crowdfund Research and its authors do not offer investment advice, nor do we endorse or recommend investments in any company or the suitability of an investment for any particular investor. Crowdfund Research is not registered as a broker-dealer or financial or investment advisor and does not provide any services requiring such registration. The information in this report or on our website regarding any company is based on publicly available information or directly from the subject company.  Crowdfund Research makes no representation or warrant as to the adequacy, accuracy or completeness of such information. Any opinions or forecasts expressed herein are our own, are not intended as investment advice and are subject to change without notice. This report has been prepared solely for informative purposes and is not a solicitation of an offer to buy or an offer to sell any security.
This report or the posting of information on our website regarding any company, including any links to information on our website, should not be construed as an endorsement or recommendation of that company for any purpose whatsoever.  This report does not take into account the investment objectives, financial situation or needs of any particular investor, and each investor should consider whether any investment opportunity is appropriate given their investment objectives and current financial circumstances. Any person considering any investment in any equity crowdfunding investment whatsoever is encouraged to consult with their own investment or financial advisor, tax advisor and/or attorney beforehand.
All investments entail risk. The companies on our site are generally small or early stage companies and are subject to risks inherent in investing in any small or early stage company as well as other risks specific to their business and operations. In addition, securities of these companies may be highly illiquid, requiring that they be held for an indefinite period of time or have a limited market for resale. Therefore, no one should invest in any of these companies unless they have no need for liquidity of their investment and can sustain a total loss of their investment.  You should only invest an amount of money that you can afford to lose without changing your lifestyle.
You should thoroughly review the complete offering materials for any investment opportunity, particularly all risk factors, prior to investing in any offering and become familiar with the investor requirements, investment limits and your ability to resell the investment.

Motoroso

By | Due Diligence, Featured | No Comments

Company Overview-

Motoroso is a new destination for automotive and motorcycle inspiration. Users can do a quick visual search, explore builds, and click right in the image to expose products, videos, articles and how-to’s. Their interactive platform makes it easy to get inspired, and soon they will build a product marketplace where users can purchase products from sellers they trust, and find the best installation shop to help with the project.
*Souce: Wefunder

Company

Investment

Name: Motoroso Minimum Raise: $50K
CEO: Alex Littlewood Maximum Raise: $1M
Company Founded: 2013 Structure of Raise: Future Equity (SAFE)
Location: Santa Clara, CA Valuation: $5M Valuation Cap, 20% discount
Crowdfunding Portal: Wefunder Minimum Investment: $300
Crowdfunding Link: https://wefunder.com/motoroso  
Website: https://www.motoroso.com/  

Review Overview

Positives

Risks and Reservations

Techstars alumni Solo founder
Active target market in automotive enthusiasts No proprietary technology
Partnership with Ford Limited barriers to entry in the space
20% MOM (month over month) traffic growth’ Business and monetization model hasn’t been established

Problem

The 40 million Americans who love cars & motorcycles currently spend hours scouring through old-school forums, hunting for the parts they want—across 10,000+ websites.

Solution 

Current:
Motoroso created a website with an interactive image interface for planning and sharing custom builds.

Long Term:
To grow “Motoroso for Professionals” to help service providers and shops do what they do better. They will also launch a marketplace that will enable customers to explore, buy and review products.

Business Model

Motoroso has three business models. The first is a subscription platform for service providers to attract new customers. The second model is product marketplace where consumers can go from finding an idea to being able to purchase it. Motoroso will take a commission on the sales purchased through their platform. The third model is an advertising platform that pushes relevant content to the right users.

Traction

  • Official Partner of the Detroit Auto Show
  • Partnered with Ford at SEMA ’15 & ‘16
  • Over 350 Official Brand Profiles
  • Over 60,000 Images uploaded and tagged
    *Source: Company provided on crowdfunding campaign website

Senior Management Team

 

Alex Littlewood

Position: CEO
Ownership Percent: 80%
Linkedin: https://www.linkedin.com/in/alex-littlewood-9b73172

Summary:
CEO Alex Littlewood brings a decade of startup experience with specialties in Social Media and marketing. Alex is a self-proclaimed car guy and having a project you’re truly passionate about is always a plus. As a Techstars alumni, he has a solid support structure to lean on. Alex is currently the only founder and sole team member. Being a solo founder always raises some concerns especially with a tech company. Development in these situations is often reliant out outside contractors without an equity interest.

Market Analysis

Industry: Automotive, focused exclusively on enthusiasts

Market Size: $80B

Industry Opinion:
Motoroso is entering an interesting market as car enthusiasts are very passionate and active but carry the non tech-savvy stigma. Currently, social engagement in this industry is very spread out across multiple channels and it will be a difficult road to consolidate a user base. The industry definitely appears to have a need for this type of solution but future traction will rely heavily on gaining large scale industry partnerships which they have already started.

Competition

Main Competitors:

 

Chariotz

Wheelwell, Inc.

Funds Raised N/A $2M
Website http://www.chariotz.com/ https://wheelwell.com/

Financials

Revenue most recent fiscal year: $17,270 (2015)

Previous Funds Raised:

  • $50,000 – convertible note, May 2014
  • $20,000 – Techstars accelerator, June 2015
  • $100,000 – convertible note, June 2015
  • $50,000 – convertible note, June 2016

Use of Funds

  • Expand functionality of ‘for professionals’ platform feature
  • Build a sales and marketing team
  • Build out product database and market place functionality

Exit Opportunities

As the sector hasn’t truly seen a qualified solution from others in this space, comparing Motoroso to previous exits and acquisitions is difficult. I believe there are a lot of major companies that would significantly benefit from the success of a company like Motoroso. Motoroso can potentially influence plenty of customers into making purchases of aftermarket auto parts. I could see this as an interesting acquisition candidate for a company like O’Reilly Auto Parts as a way to drive future revenue growth.

Recent Acquisitions in the Field

Date

Company Acquired Acquired By Amount
July 31, 2015 Polyvore Yahoo $230M
Sept. 5, 2012 Source Interlink Car Domain $50M
April 9, 2012 Instagram Facebook $1.01B

Expert Opinion Summary

Motoroso has put together an intriguing offering at a $5M valuation cap with a 20% discount. Given the traction and limited revenue, I would be more confident if the valuation cap was $4M with the 20% discount, but the current offering is certainly worth consideration. With Alex being a solo founder that certainly raises concerns without having additional team members that have an equity interest. Alex proved himself to Techstars, which rarely accepts solo founders, but I would like to see a plan for growing the team. Scaling a project is challenging with the support of a team and doing it alone can easily become overwhelming. The fact that Motoroso was able to secure a partnership with Ford instills confidence that good things are still to come for this startup.

AngelList: https://angel.co/motoroso
Crunchbase: https://www.crunchbase.com/organization/motoroso#/entity

Disclaimer

Crowdfund Research and its authors do not offer investment advice, nor do we endorse or recommend investments in any company or the suitability of an investment for any particular investor. Crowdfund Research is not registered as a broker-dealer or financial or investment advisor and does not provide any services requiring such registration. The information in this report or on our website regarding any company is based on publicly available information or directly from the subject company.  Crowdfund Research makes no representation or warrant as to the adequacy, accuracy or completeness of such information. Any opinions or forecasts expressed herein are our own, are not intended as investment advice and are subject to change without notice. This report has been prepared solely for informative purposes and is not a solicitation of an offer to buy or an offer to sell any security.
This report or the posting of information on our website regarding any company, including any links to information on our website, should not be construed as an endorsement or recommendation of that company for any purpose whatsoever.  This report does not take into account the investment objectives, financial situation or needs of any particular investor, and each investor should consider whether any investment opportunity is appropriate given their investment objectives and current financial circumstances. Any person considering any investment in any equity crowdfunding investment whatsoever is encouraged to consult with their own investment or financial advisor, tax advisor and/or attorney beforehand.
All investments entail risk. The companies on our site are generally small or early stage companies and are subject to risks inherent in investing in any small or early stage company as well as other risks specific to their business and operations. In addition, securities of these companies may be highly illiquid, requiring that they be held for an indefinite period of time or have a limited market for resale. Therefore, no one should invest in any of these companies unless they have no need for liquidity of their investment and can sustain a total loss of their investment.  You should only invest an amount of money that you can afford to lose without changing your lifestyle.
You should thoroughly review the complete offering materials for any investment opportunity, particularly all risk factors, prior to investing in any offering and become familiar with the investor requirements, investment limits and your ability to resell the investment.

Golfboard

By | Due Diligence | No Comments

Company Overview –

Powered by an environmentally friendly lithium-ion battery, the GolfBoard is an easy-to-ride fully electric vehicle that adds a whole new level of fun and excitement. Golfers of all ages can now “Surf the Earth” from shot-to-shot in a way that feels like snowboarding or surfing. They call it “GolfBoarding.”
*Souce: Crunchbase

Company

Investment

Name: Golfboard

Minimum Raise: $50K

CEO: John Wildman

Maximum Raise: $1M

Company Founded: 2012

Structure of Raise: Common Stock

Location: Bend Oregon

Valuation: $8M Pre-Money Valuation

Crowdfunding Portal: Start Engine

Minimum Investment: $125

Crowdfunding Link: https://www.startengine.com/startup/golfboard

 

Website: http://www.golfboard.com/

 

Review Overview

Positives

Risks and Reservations

PGA best new product award

Management has limited equity ownership

Experienced management team

Significant amount of company debt

$4.7M in revenue for 2016

10% of gross margin endorsement royalty

Large market at $7B

40% of offering proceeds to pay previous debt including deferred management salaries

Competition offers very similar product at a lower price

Offering is for Class B common stock

Problem

Golf courses are seeking ways to speed up the game and make it more attractive to a wider range of players

Solution

Current: Golfboard created a motorized single rider vehicle design to mirror the experience of riding a surfboard or snowboard, these boards reduce playing time for golfers.

Long Term: Golfboard plans to release two new motorized boards, BeachBoard and ResortBoard, to allow them to expand beyond the golf course.

Business Model

Currently, GolfBoards are sold for $6,500, rented for $350 per month, or leased for about $156 per month by golf courses nationwide. The primary source of revenue comes from the sale of the boards. GolfBoard recently released two new products, the ResortBoard and BeachBoard. They are also implementing an e-commerce initiative so they are able to sell their product to individuals.

Traction

  • Already used on 250+ top courses worldwide
  • Nearly 2,000 boards shipped worldwide
    *Source: Company provided on crowdfunding campaign website

Senior Management Team

 

John Wildman

Jeff Dowell

Position:

CEO

President & COO

Ownership Percent:

8%

5.5%

Linkedin:

https://www.linkedin.com/in/john-wildman-24466229

https://www.linkedin.com/in/jeff-dowell-7a5329

Advisors:

Luan Phem – Head of Marketing for Conde Nast Golf Digest

Summary:

Wildman and Dowell bring years of business experience to Golfboard. Besides the full-time members of management Golfboard has contracted multiple external executives to serve as directors of the company. Golfboard spent $1.2M on salaries and benefits in 2016. With many of the directors holding full-time positions with other companies the compensation expense raises concern.

Market Analysis

Industry: Golf Industry

TAM (Total Addressable Market): $7B
*Source: Start Engine

Driving Trends: Flat industry growth

Industry Opinion:

The golf industry has struggled to increase participation over the years. According to an article in Forbes, golf participation saw stagnant growth from 2012-2014. The industry is working hard to increase participation and has singled out the issue of pace of play as a major deterrent. Golfboard states they can reduce playing time by up 40% compared to traditional golf carts.

With 24 million golfers in the U.S, there is certainly a large target demographic for Golfboard. Along with competition from standard golf carts, there is also competition from Golf Skate Caddy who makes a very similar product that is lower priced.

Competition:

Differentiator:

Golfboard differentiates itself with a higher quality product along with additional performance features.

Main Competitor

Company Name: Golf Skate Caddy

Funds Raised: Unknown

Company Website: http://www.golfskatecaddyusa.com/

Financials

Revenue to date: $8.88M

Revenue Last Fiscal Year: $4.7M

Previous Funds Raised: $3.5M in Convertible Notes
*Source: Start Engine

Use of Funds

  • Product to Market
  • Business Development
  • International Expansion

Exit Opportunities

As the golf industry is looking to innovate and draw in a younger demographic the traditional golf cart manufacturers will be looking to maintain an edge and differentiate themselves. I think GolfBoard would be an interesting acquisition target to any of the major three manufacturers Club Car, E-Z-Go or Yamaha.

Recent Acquisitions in the Field

Date Company Acquired Acquired By

Amount

Apr 15,2015

Segway Ninebot

Unknown

March 12, 2015

Ninja Caddie Golf Holdings Corporation

Unknown

Expert Opinion Summary

I think the product is exceptional and is certainly priced in a fair range if being compared to a traditional electric golf cart which retails in the $8,000-$9,000 range. Golfboard is targeting the traditional sales model used by golf carts which involves leasing the vehicle to the golf courses typically done over a 3-4 year period.

Despite having a great product, the structure and operation of the business raises concerns. The first concern with this offering is that a large percentage is being used to pay for previously incurred debt and deferred management salaries. As a potential investor, you would hope that the new capital being put in would be used to grow and expand the business from the current state. With a majority interest of the company not being helped by the core management team, the motivation to quickly grow the companies value could be questioned.

Although it’s not uncommon to have a royalty on a product, 10% of gross margin being paid to sponsor Laird Hamilton does seem high and will make an impact on the future growth of the company.

AngelList: N/A
Crunchbase: https://www.crunchbase.com/organization/golfboard#/entity

Disclaimer

Crowdfund Research and its authors do not offer investment advice, nor do we endorse or recommend investments in any company or the suitability of an investment for any particular investor. Crowdfund Research is not registered as a broker-dealer or financial or investment advisor and does not provide any services requiring such registration. The information in this report or on our website regarding any company is based on publicly available information or directly from the subject company.  Crowdfund Research makes no representation or warrant as to the adequacy, accuracy or completeness of such information. Any opinions or forecasts expressed herein are our own, are not intended as investment advice and are subject to change without notice. This report has been prepared solely for informative purposes and is not a solicitation of an offer to buy or an offer to sell any security.
This report or the posting of information on our website regarding any company, including any links to information on our website, should not be construed as an endorsement or recommendation of that company for any purpose whatsoever.  This report does not take into account the investment objectives, financial situation or needs of any particular investor, and each investor should consider whether any investment opportunity is appropriate given their investment objectives and current financial circumstances. Any person considering any investment in any equity crowdfunding investment whatsoever is encouraged to consult with their own investment or financial advisor, tax advisor and/or attorney beforehand.
All investments entail risk. The companies on our site are generally small or early stage companies and are subject to risks inherent in investing in any small or early stage company as well as other risks specific to their business and operations. In addition, securities of these companies may be highly illiquid, requiring that they be held for an indefinite period of time or have a limited market for resale. Therefore, no one should invest in any of these companies unless they have no need for liquidity of their investment and can sustain a total loss of their investment.  You should only invest an amount of money that you can afford to lose without changing your lifestyle.
You should thoroughly review the complete offering materials for any investment opportunity, particularly all risk factors, prior to investing in any offering and become familiar with the investor requirements, investment limits and your ability to resell the investment.

Evelo

By | Due Diligence | No Comments

Company Overview-

EVELO Electric Bicycle Company develops and distributes long-range, stylish electric bicycles for recreation and commuting. Their electric bikes remove the barriers that keep people from cycling, such as hills, distance, age or fitness levels. The mission is to get more people cycling more often by making bicycles accessible and simple to use.
*Souce: Crunchbase

Company

Investment
Name: Evelo Minimum Raise: $100K

CEO: Boris Mordkovich

Maximum Raise: $1M
Crowdfunding Portal: Wefunder

Structure of Raise: Preferred Stock

Crowdfunding Link: https://wefunder.com/evelo

Valuation: $7.5M pre-money valuation

 Website: http://www.evelo.com/

Minimum Investment: $1000

Review Overview

Positives Risks and Reservations
Preferred stock offering Management looking to expand into additional business models via rental subscription service and repair service
$6M revenue since inception, $1M in Q2 2016 Direct to consumer only model, not pursing wholesale model
Investors include Barbara Corcoran and Brad Feld Product that has a seasonal and regional effect based on warm weather climates.
65% Average yearly growth Electric bikes cost significantly more than a standard bicycle

Business Model

Evelo has two primary product lines, the Evelo Bikes and the Omni Wheel. The bike line consists of 4 styles of bikes with varying costs based on the size of the electric motor and battery capacity. The Omni Wheel in an electric wheel that can convert any standard bicycle into an electric bike. The bike line ranges from $2,099 to $3,499, and the Omni Wheel ranges from $999 to $1,249. Evelo maintains a 50% margin across all of their product lines. Evelo also sells various accessories such as bike locks, tool kits and water bottles.

Traction

  • 3,000+ customers
    *Source: Company provided on crowdfunding campaign website

Senior Management Team

CEO Boris Mordkovich and CTO Yevgeniy Mordkovich both have a track record as successful founders. The pair has previously co-founded and sold two other companies. Neither has previously worked in the bicycle industry, but Boris is an avid cyclist and rode an Evelo bike 4,00 miles from NYC to San Francisco during the development phase.

Use of Funds

  • More products to market
  • International Expansion
  • Customer Acquisition
  • Recurring Revenue

Market Analysis

Industry: E-Bike Industry

Market Size: $15B in 2015

Industry Opinion:
The electric bike industry is growing rapidly with widespread adoption in Europe along with growing popularity in the U.S. Electric bikes offer a great alternative form of transportation for those commuting to work or that live in metropolitan areas. I think this industry has a huge growth potential as the cost of manufacturing is starting to come down to affordable price points. My one hesitation is the Midwestern in me that sees less practical use outside of urban areas and being weather dependent, but the same could be said for snowmobiles.

Competitive Analysis

  Pedego Stromer Faraday
Headquarters Irvine, CA Oberwangen San Francisco, CA
Founded 2009 2009 March 1, 2012
Stage Unknown Unknown Seed
Total funding ($M) Unknown Unknown $2.05M
The business Pedego is a manufacturer of electric bikes with built-in electric hub motor to provide additional assistance. Stromer is a tech company that allows its users to custom design their e-bikes online. Faraday Bicycles is a company that designs and builds electric bicycles.

Financials

Revenue to Date: $1M in Q2 2016, $6M in revenue since inception

Previous Funds Raised: $740K
*Source: Crunchbase

Exit Opportunities

There are multiple small electric bike companies in the U.S with each having a bit different ideals on the ideal electric bike and price points. As the industry becomes established I foresee a handful of these companies consolidating to increase manufacturing and distribution capabilities. The other potential exit opportunity is none of the major bicycle manufacturers have released electric bikes as of yet. Being acquired by the likes of Huffy or Mongoose could provide an easy way for them into the market as often happens in the tech world.

Recent Acquisitions in the Field

Date Company Acquired Acquired By Amount
Nov. 20, 2014 ProdecoTech PayMeOn Unknown
Dec. 2011 Currie Technologies Accell Group Unknown

Expert Summary Review

It is always refreshing to see a crowdfunding campaign offering preferred stock, which is highly valuable to startup investors. Unlike SAFE’s where you don’t truly know what you’re paying for, the preferred stock offering with clear terms and contract clauses provides a little more certainty. Evelo has previously raised $740k in seed funding in December of 2015 which demonstrates the company has certainly achieved milestones for previous investors.

I would say the $7.5M valuation is certainly in the range of being industry and traction appropriate. Unlike traditional venture capital investing, crowdfunding relies more on the founder’s ability to succeed without providing some of the aid and benefits that come with certain venture capitalists. Knowing that Evelo is backed by the reputable support systems of Barba Corcoran Venture Partners and Foundry Group’s Brad Feld gives a bit more of peace of mind knowing that someone is also looking out for the interests of investors.

AngelList: https://angel.co/evelo
Crunchbase: https://www.crunchbase.com/organization/evelo-electric-bikes

Disclaimer

Crowdfund Research and its authors do not offer investment advice, nor do we endorse or recommend investments in any company or the suitability of an investment for any particular investor. Crowdfund Research is not registered as a broker-dealer or financial or investment advisor and does not provide any services requiring such registration. The information in this report or on our website regarding any company is based on publicly available information or directly from the subject company.  Crowdfund Research makes no representation or warrant as to the adequacy, accuracy or completeness of such information. Any opinions or forecasts expressed herein are our own, are not intended as investment advice and are subject to change without notice. This report has been prepared solely for informative purposes and is not a solicitation of an offer to buy or an offer to sell any security.
This report or the posting of information on our website regarding any company, including any links to information on our website, should not be construed as an endorsement or recommendation of that company for any purpose whatsoever.  This report does not take into account the investment objectives, financial situation or needs of any particular investor, and each investor should consider whether any investment opportunity is appropriate given their investment objectives and current financial circumstances. Any person considering any investment in any equity crowdfunding investment whatsoever is encouraged to consult with their own investment or financial advisor, tax advisor and/or attorney beforehand.
All investments entail risk. The companies on our site are generally small or early stage companies and are subject to risks inherent in investing in any small or early stage company as well as other risks specific to their business and operations. In addition, securities of these companies may be highly illiquid, requiring that they be held for an indefinite period of time or have a limited market for resale. Therefore, no one should invest in any of these companies unless they have no need for liquidity of their investment and can sustain a total loss of their investment.  You should only invest an amount of money that you can afford to lose without changing your lifestyle.
You should thoroughly review the complete offering materials for any investment opportunity, particularly all risk factors, prior to investing in any offering and become familiar with the investor requirements, investment limits and your ability to resell the investment.

Snapwire

By | Due Diligence | No Comments

Company Overview-

Snapwire is a platform where talented mobile photographers shoot custom images for people around the world. Simply post an image request, and top mobile photographers respond by competing creatively to submit their best photos. Buyers get unique images that match their vision, and the winning photographers get paid.
*Souce: Crunchbase

Company

Investment

Name: Snapwire

Minimum Raise: $25K
CEO: Chad Newell

Maximum Raise: $750K

Company Founded: August 2, 2016

Structure of Raise: Common Stock

Location: Santa Barbra, CA

Valuation: $4.914M pre-money valuation

Crowdfunding Portal: Wefunder Minimum Investment: $100
Crowdfunding Link: https://wefunder.com/snapwire  

Website: https://www.snapwi.re/

 

Review Overview

Positives Risks and Reservations
Significant traction with over 300k photographers and 1800 paying clients CEO remains a member of previous company Media Bakery
Valuation at $4.914M pre-money Potential CEO conflict of interest with Media Bakery licensing software from Snapwire in exchange for services rendered
Founder has previous startup experience 25,500,000 shares of common stock authorized in addition to 12,400,000 of preferred stock authorized in the cap table
Disruptive business model Non-standard dilution strategy implemented with this offering by calculating pre-money valuation based on book value. Shares being sold under this offering were previously authorized on the cap table. This strategy reduces the dilution that would normally be realized by previous investors.

Problem

The stock photo industry uses mass archives of irrelevant, outdated, pre-shot photos. Right now, searching for the perfect authentic, modern photo is like finding a needle in a haystack: it’s inefficient and sometimes impossible.

Solution

Current:
Snapwire created a site where customers post creative requests and proven photographers respond with their best shots. Buyers get unique images that match their vision, and the winning photographers get paid.

Long Term:
Snapwire wants to give more tools to their photographers so they can upload photos to the platform in volume. The more high quality images on the platform, the more frequent successful searches they will have.

Business Model

Snapwire retains 30% of each custom photography transaction and 50% of each photo transaction purchased through the Snapwire marketplace.

Traction

  • 1800 clients worldwide such as LinkedIn, Scholastic, Google, and Hertz
  • 305,423 users as of October 2016
    *Source: Company provided on crowdfunding campaign website

Senior Management Team

 

Chad Newell

Ryan Dewane

Position:

CEO

Creative Director & Product Development

Ownership Percent:

40.5%

N/A

Linkedin:

https://www.linkedin.com/in/chadrnewell

https://www.linkedin.com/in/ryandewane

Summary:
CEO Chad Newell has the necessary leadership experience in startups through his previous company Media Bakery. Chad remaining a member of Media Bakery while acting as CEO of Snapwire could lead to some potential conflict of interest given the two business have overlapping interests. With Snapwire and Media bakery sharing offices and resources, there is a lack of clear separation of the two entities.

Market Analysis

Industry: Commercial Photography

Market Size: $10B

Industry Opinion:
The online commercial photography industry is growing but filled with large and well-funded competitors such as Adobe and Getty Images. With plenty of competitors and lack of barriers to entry the commissioned fee structure could see constant downward pressure.

Competition

Main Competitors:

500px Twenty20

IM Creator

Funds Raised

$22.33M $9.7M

N/A

Website

https://500px.com/ https://www.twenty20.com/

http://imcreator.com/free

Financials

Revenue to date: $125,022 in 2015

Previous Funding: Undisclosed amount in 2 rounds

Use of Funds

  • 25% for new hires
  • 20% for product development
  • 5% for marketing
  • 5% for international expansion
  • 10% for including existing employee compensation
  • 20% unallocated (reserved)

Exit Opportunities

Snapwire could be a valuable acquisition to companies such as Adobe or Getty Images or a handful of the other competitors if the model Snapwire has chosen gains significant traction. Although there have been similar acquisitions by the large industry players there hasn’t been many in recent years.

Recent Acquisitions in the Field

Date Company Acquired Acquired By Amount
May 2011 Photolibrary Getty Images $20M
Sept. 23, 2009 BigStock Shutterstock Unknown
Feb. 1, 2006 Istock photo Getty Images $50M

Expert Opinion Summary

Snapwire has taken a disruptive approach on the stock photo model that allows the end customers a more customized solution. This model could potentially increase the spend per customer than is currently being achieved by the industry.

While the business model and implementation has proven some success, it will be an uphill battle against large competitors. The company already being in year 5 and having issued multiple convertible note rounds raises concerns of how fast they can increase growth. I would be concerned given their history, that they will be available to provide a substantial ROI in a reasonable timeframe.

I do believe the model Snapwire has chosen to pursue in regards to online photography sales can win in the long run. My reservations lie in the traction achieved given their years in business along with the complicated dilution structure they have outlined in the offering.

AngelList: https://angel.co/snapwire
Crunchbase: https://www.crunchbase.com/organization/snapwire

Disclaimer

Crowdfund Research and its authors do not offer investment advice, nor do we endorse or recommend investments in any company or the suitability of an investment for any particular investor. Crowdfund Research is not registered as a broker-dealer or financial or investment advisor and does not provide any services requiring such registration. The information in this report or on our website regarding any company is based on publicly available information or directly from the subject company.  Crowdfund Research makes no representation or warrant as to the adequacy, accuracy or completeness of such information. Any opinions or forecasts expressed herein are our own, are not intended as investment advice and are subject to change without notice. This report has been prepared solely for informative purposes and is not a solicitation of an offer to buy or an offer to sell any security.
This report or the posting of information on our website regarding any company, including any links to information on our website, should not be construed as an endorsement or recommendation of that company for any purpose whatsoever.  This report does not take into account the investment objectives, financial situation or needs of any particular investor, and each investor should consider whether any investment opportunity is appropriate given their investment objectives and current financial circumstances. Any person considering any investment in any equity crowdfunding investment whatsoever is encouraged to consult with their own investment or financial advisor, tax advisor and/or attorney beforehand.
All investments entail risk. The companies on our site are generally small or early stage companies and are subject to risks inherent in investing in any small or early stage company as well as other risks specific to their business and operations. In addition, securities of these companies may be highly illiquid, requiring that they be held for an indefinite period of time or have a limited market for resale. Therefore, no one should invest in any of these companies unless they have no need for liquidity of their investment and can sustain a total loss of their investment.  You should only invest an amount of money that you can afford to lose without changing your lifestyle.
You should thoroughly review the complete offering materials for any investment opportunity, particularly all risk factors, prior to investing in any offering and become familiar with the investor requirements, investment limits and your ability to resell the investment.