Company Overview –
Fizzics is a universal beer dispenser that delivers a fresh-from-the-tap experience from any can, bottle, or growler.
|Name: Fizzics||Minimum Raise: $100K|
|CEO: Philip Petracca||Maximum Raise: $1M|
|Company Founded: 2014||Structure of Raise: Series Seed Preferred Stock|
|Location: Wall, NJ||Valuation: $18M pre-money valuation|
|Crowdfunding Portal: Microventures||Minimum Investment: $200|
|Crowdfunding Link: https://app.microventures.com/crowdfunding/fizzics|
|Positives||Risks and Reservations|
|Great early traction with retailers and consumers, as well as with crowdfunding sites.||Cashflow management is paramount. Manufacturing requires significant upfront investment followed by long payment terms of retailers. The more successful the company is the greater and greater upfront cash required.|
|Shark Tank investors all highly impressed with the taste difference. Though the company is not able to comment on the results of the Shark Tank program, based on the QVC results, it would appear that they are moving forward with Cuban and Greiner||There is only one board member – the founder and CEO. It would be beneficial for the “shareholders” (a.k.a founders) of the company to have elected multiple board members. In its current state, the CEO and sole board member is free to operate the company at his sole discretion. It is often preferred that big issues are discussed, debated, and wrestled with, even if with a close tight-knit group.|
|Significant market and product line expansion opportunities.||The amount of cash available for operations ranges from roughly 1 month at the low end of a successful raise to 1 year at the top level. In any event, the company will continue to require additional funding as it grows and the investors will face additional dilution|
|The company has not planned nor identified any potential paths for an exit event, which may defer a return on investment indefinitely. This issue is compounded by the absence of a board directors beyond the founder, CEO.|
90% of beer is consumed from cans or bottles and the experience, flavor, and taste is not as good as it is fresh from the tap.
Fizzics created a beer system that delivers a fresh from the tap experience. Fizzics controls pressure flow and utilizes sound to create a rich, creamy foam (head) that enhances the appearance, aroma, flavor, and a smooth bodied mouth-feel. The system is compatible with standard-size cans and bottles and is powered by AA batteries.
Fizzics plans to release two new products in 2017, the Waytap Savor+ and the Waytap Host.
Fizzics generates most of their revenue by selling its products wholesale to retail partners. The Original Beer System has margins of 69% and the Waytap has margins of 61%. They also make money by selling their product direct to consumers through their website. The Waytap retails for $149.99 with gross margins of 75% and the Original Beer System retails for $200 with gross margins of 78%.
- Appeared on Season 8 of Shark Tank
- Available at Best Buy, Brookstone, Target, Amazon, QVC, Total Wine & More, Best Buy Canada
- One of Brookstone’s best-selling holiday items in 2015
- Received 86,000 purchase orders in 2016 compared to 16,450 in 2015
- Had 14,000 purchase orders in January 2017
*Source: Company provided on crowdfunding campaign website
Senior Management Team
|Philip Petracca||David MacDonald||Tom Steckbeck|
|Position:||CEO & Co-Founder||CTO & Co-Founder||CCO|
The team has solid experience in launching and marketing products as evidenced by their early traction in crowdfunding sites, in retailers, and on Shark Tank. The company should build out its board of directors to provide additional comfort for investors/shareholders.
Industry: Alcoholic Beverage
TAM (Total Addressable Market): $22.3 (craft beer market in 2015)
*Source: Portal Page
Driving Trends: Craft beer sales rose 13% in 2015
The consumer appliance industry is highly competitive and with several competitors in this space, the company can anticipate margin erosion over time. If they are able to innovate and create a product suitable for commercial operations (bars, restaurants, etc.) that delivers the same excellence in product enhancement, they may find a market with fewer competitors and sustainable profitability.
The size and quality of the bubbles in the head of the beer provides a taste and experience that has rave reviews.
|Funds Raised||$3.145M||$160 on Indiegogo||N/A||N/A||N/A|
|Retail Price||$399||$29.99||$391 (Amazon)||$149.99||$160 (Amazon)|
Revenue to date: ~$7.3M
Revenue Last Fiscal Year: $5.6M+ (2016)
Previous Funds Raised:
- $260,000+, Indiegogo, May 2015
- $1M+, Kickstarter, September 2016
Use of Funds
The majority of the funds raised will be used for development of new products and marketing. They will also use the funds for general working capital, repayment of obligations, equipment purchases, and repayment of debt.
Investors ultimately want to know this. If they invest, how much will they get back and when. The company has stated that it has not considered any plans for an eventual exit and that shows a disconnect from the needs/wants of its shareholders. Should there be a change of disposition, there would likely be a number of potential acquirers from the very deep pocketed beer industry.
Expert Opinion Summary
This company has gotten off to an excellent start. If the company were to build out its board of directors it would provide more comfort that the team could weather the inevitable challenges new ventures face, as well as communicate a wisdom in understanding corporately leadership. Further, the leadership should communicate how it plans to provide return for investors, through M&A, IPO and/or Dividends. Additionally, because of the nature of the consumer appliance business, cash flow will need to be actively and successfully managed.
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