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.
|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|
|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.|
The stock photo industry uses mass archives of irrelevant, outdated, pre-shot photos.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.
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.
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.
Snapwire retains 30% of each custom photography transaction and 50% of each photo transaction purchased through the Snapwire marketplace.
- 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
Creative Director & Product Development
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.
Industry: Commercial Photography
Market Size: $10B
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.
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)
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.
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