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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.  

Tradeshow

By | Due Diligence, Featured | No Comments

Company Overview – 

Tradeshow allows fans to attend and exhibit conventions and expos from wherever they are located. Currently only fans who can afford to travel and attend in person get to enjoy the experience.
*Source: Wefunder

Company

Investment

Name: Tradeshow

Minimum Raise: $100K

CEO: Solomon Engel

Maximum Raise: $1M

Company Founded: 2016

Structure of Raise: Convertible Note

Location: Fort Lauderdale, FL

Valuation: $12M Valuation Cap, 4% interest

Crowdfunding Portal: Wefunder

Minimum Investment: $100

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

 

 

Website: https://tradeshow.net/

 

 

Review Overview

Positives

Risks and Reservations

Appear to have solid partners with industry experience like Stan Lee, as well as 60+ shows booked for 2017

Investment is not solely in Tradeshow, but also in Boxes, the parent company, and core brand, and the timing, conversation, and price per share paid on the convertible note is uncertain

Tradeshow has the potential to create an entirely new industry – virtual conferences, trade shows, and conventions

Boxes’ prior year revenues are very small, and the company’s cash reserves ($115,000) at year-end were minuscule compared to the net loss for the year ($615,000). This company could run out of money, quickly.

Well-positioned to capitalize on current and future trends – including conference live-streaming, social engagement before, during, and between events, and the potential for virtual reality is clear

The business model and technology are both unproven – will vendors be willing to pay to have a booth, how many customers can you drive to the show, who pays for what?, how do you ensure there are no technical glitches?

AmazeCon, supposedly set for January of 2017, still has no social activity or web presence, raising questions about the 60+ shows to be produced in 2017

Problem

Currently, conventions such as Comic-Con have been reserved for fans who can afford to travel and attend in person.

Solution

Current:

Tradeshow created a virtual convention and trade show platform, allowing fans to experience the events through internet connected devices. Right now, they are focusing on certain key areas and popular genres for shows such as toys, comics, video games, and sports collectibles.

Long Term:

Eventually, they will have shows for anything from fashion, to antiques, to cars, you-name-it.

Business Model

Tradeshow has a multi-faceted business model. While most in-person trade shows and conferences which charge for sponsorship, ticket sales, and booths, Tradeshow adds in item sales, where they take a 10% commission, 1-on-1 video chat opportunities, and signings where they also take a commission. The business model, however, is totally unproven and is reliant upon Tradeshow’s ability to sign up shows, bring on vendors, and drive audience participation and transactions.

Traction

  • Signed contracts to put on over 64 shows in 2017
  • Patented the concept and technology for the virtual trade show
    *Source: Company provided on crowdfunding campaign website

Senior Management Team

 

Solomon Engel

Aaron Anderson

Position:

CEO

Art Director

Ownership Percent:

68.48%

N/A

Linkedin:

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

https://www.linkedin.com/in/aaronanderson36/

 Summary:

The founders of the business, Solomon Engel and Aaron Anderson, have started prior ventures, including ResumeSponge and Advise.Me. It is not clear the outcome of either venture. Both Solomon and Aaron are experienced at running startups, though appear to be new to the trade show and conference industry, which could present a challenge. The rest of the team is very developer-heavy, a critical piece to ensure the infrastructure can support hundreds of thousands of concurrent conference participants.

Market Analysis

Industry: Events Services

TAM (Total Addressable Market): $369B
*Source: Wefunder

Industry Opinion:

The conference industry, where travel to-and-from and logistics are some of the biggest cost drivers and factors limiting attendance, is going to be changed over the next decade by a variety of technologies, including virtual reality, live streaming, and the idea of “Virtual conferences.” Further, the success of online-to-live events seen in fields like eSports is a testament that this idea can be valuable and engaging if done right.

Company Financials

Revenue to date: $398 most recent fiscal year end (2015)

Previous Funds Raised: $1,434,300

Use of Funds

  • Product Development
  • Marketing
  • Putting shows together
  • Operating expenses

Exit Opportunities

Potential exits in this space include large event operators like Reed Exhibitions or Informa, entertainment companies like Marvel or DC, or tech mammoths like Google and Amazon, who both bid to buy Twitch, a gaming live-streaming community.

Recent Acquisitions in the Field

Date

Company Acquired Acquired By

Amount

Aug. 11, 2016

ON Event Services Viad Corp

Unknown

March 2015

Staging Directions Inc ON Event Services

Unknown

Expert Summary Review

While the idea is compelling, there are concerns about the structure of the offering and how well it positions the company for success. A $12M valuation cap seems high for the $400 in revenue generated to date by the company, and it’s current cash position. Despite raising capital previously, the company only had $115K in cash on hand at the end of 2015 and was able to raise another $196,000 in 2016. The cost of spinning up a new platform, marketing it, selling and putting on conferences may not be covered by this crowdfunding campaign. It is not clear, with this capital, what milestones the company will achieve. While the early traction in a compelling market segment is impressive, a question that remains is the certainty that the 60+ events referenced will be completed in 2017.

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.

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.