Due Diligence For

CROWDFUNDING

ITFT (Innovative Technology for Transportation)

By February 7, 2017Due Diligence

Company Overview –

ITFT, The Safe Driving System is a patented system designed to prevent drivers from speeding and driving recklessly.
*Souce: Start Engine

Company Investment
Name: ITFT Minimum Raise: $50K
CEO: Matthew Godley Maximum Raise: $1M
Company Founded: 2013 Structure of Raise: Common Stock
Location: North Carolina Valuation: $8.635 pre-money valuation
Crowdfunding Portal: Start Engine Minimum Investment: $200
Crowdfunding Link: https://www.startengine.com/startup/itft  
Website: http://itftsolutions.com/  

Review Overview

Positives Risks and Reservations
Use of data connected devices in cars is becoming more commonplace and parents, insurance companies and fleet services are seeking ways to improve safety, reduce injuries and deaths and lower costs. ITFT has no customers or sales and will require a great deal more money to finish its product development and sales and marketing efforts.  It may not have enough money to be able to become profitable.
The patented technology appears to offer some advantages and features that its competitors lack. There are many competitors, most of who are far larger than ITFT, have far greater financial and technological resources, as well as customers and revenue.
The advisory team has significant experience in startups, technology, and financial matters. ITFT needs to continue its technology development, as well as protecting its intellectual property.  If a competitor violated ITFT’s intellectual property or claimed that ITFT violated their intellectual property, ITFT likely would not have the resources to protect itself.
ITFT could be subject to significant regulatory or legal risks from people using their device, especially if the device provides incorrect information and leads to recalls or lawsuits.
Management has no experience with startups and little business experience in general.  The CEO is also the only voting shareholder and board member.
Valuation is very high.  If they raise $1,000,000, the crowdfunding investors will only own 10.8% of the Company, meaning that management is valuing the company at almost $10,000,000 post offering, which is extremely high for a company with no customers and no sales.

Problem

In 2015, approximately 38,300 people lost their lives in car accidents while an additional 4.4 million people were injured and needed medical assistance. The Department of Transportation calculated that 94% of all accidents are a result of human error such as speeding, reckless driving, and distracted driving.

Solution

Current:
ITFT created a technology that limits access to distracting mobile apps, can program and allow remote control of selected vehicle functions, and communicates events and activity to the app user.

Long Term:
They plan to add more features to their product that are part of the patent. These features include a panic button that can alert police/emergency personnel and can begin recording video and audio of an incident. They also want to include a breathalyzer module.

Business Model

ITFT will charge users a fee of $25/month.

Traction

  • S. full utility patent granted
  • Completed PRD and SRS specifications needed to start product development
    *Source: Company provided on crowdfunding campaign website

Senior Management Team

  Matthew Godley Walt Maclay Cindy Godley
Position: CEO & Founder Interim CTO Secretary
Ownership Percent: 100% N/A N/A
Linkedin: https://www.linkedin.com/in/matthew-godley-99820183 https://www.linkedin.com/in/waltmaclay N/A

Advisors:

  • Amel Hill – Contract Patent Engineer with 25 years of experience in automotive technology applications
  • Tom Steding – Served as CEO for 9 startups
  • John Hondros – Senior VP managing director at SunTrust Private Wealth Management

Summary:
While the CEO, Matthew Godley does not have any previous experience in the industry or in startups, the CTO and advisors do have relevant experience.  The company will have to quickly hire experienced employees to realize their commercialization plans.

Market Analysis

Industry: Mobile App

TAM (Total Addressable Market): Their initial target market is focused on parents of teenagers. In 2014 there were approximately 37.5M families in the U.S. with at least one child under 18. There are approximately 15M teenage drivers in the U.S.
*Souce: Portal Page

Driving Trends: 24% growth from 2015 to 2016

Industry Opinion:
The total size of the market in dollars is unclear, as this market is still developing.  However, there are a number of potential market segments, including teenagers, fleets, and car services like Uber and Lyft that are experiencing significant growth.  The auto industry is increasing adding technology, including safety and data, to cars and this trend is likely to continue.

Competition

Differentiator:
ITFT has a patented technology that allows it to monitor and control certain aspects of a car’s performance and driver’s mobile device as it relates to safety.  Many of the unique product features are covered by the patent and could prove to be real competitive advantages.

Main Competitors

 

Automatic Zubie Hum by Verizon

Audiovox Car Connection 2.0

Funds Raised $24M 25.87M N/A N/A
Website https://www.automatic.com/ http://zubie.com/ https://www.hum.com http://www.carconnection20.com/

Company Financials

Revenue to date: $0

Revenue Last Fiscal Year: $0

Previous Funds Raised: $0

Use of Funds

If minimum amount is raised:

  • Development of prototype

If maximum amount is raised:

  • Development of prototype
  • Development of mobile app
  • Government consulting
  • Marketing
  • Pay salaries
  • Repayment of indebtedness
  • Travel & meetings
  • Working capital

Exit Opportunities

Many of competitors are significantly larger than IFTF and may want to acquire IFTF to buy its patent and product features.

Recent Acquisitions in the Field

Date Company Acquired Acquired By Amount
March 28, 2016 Interactive Driving Systems eDriving LLC Unknown
March 10, 2016 OpenCar INRIX Unknown

Expert Opinion Summary

While the CEO is young and inexperienced, the technology he has developed seems to offer promise in an expanding market.  He has surrounded himself with an experienced advisory group but will need to hire employees and add to his board and management team to take the company to the next level to commercialize and/or sell it.

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. 

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Todd Taylor

Todd Taylor

Senior Business Attorney at JUX Law Firm
Todd helps entrepreneurs with challenging legal issues facing their businesses. For almost 20 years, Todd has provided practice legal advice on business formation, angel and venture financing, contracts and buying and selling businesses. Todd enjoys working with technology companies, including those in cleantech, energy, food and agtech, IoT and manufacturing. Todd also represents investors in early stage companies and has been involved as a co-founder in a number of start up companies.
Todd Taylor

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