Due Diligence For

CROWDFUNDING

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.

Related Posts

  • MotorosoMotoroso Company Overview- Motoroso is a new destination for automotive and motorcycle […]
  • ComicBlitzComicBlitz Company Overview - ComicBlitz is focused on streaming digital comic books. It provides […]
  • Vera Roasting CompanyVera Roasting Company Company Overview - Vera Roasting Company has created a craft coffee, CoffVee, infused […]
  • Pedal AnywherePedal Anywhere Company Overview - Pedal Anywhere is a bike rental company in Seattle and Friday […]
Greg Beaufait
Follow Me

Greg Beaufait

Partner at Dundee VC
Greg Beaufait is a partner at Dundee VC, an early-stage venture fund focused on leading seed investments in Midwest software and e-commerce companies. Dundee VC has $40M under management across 3 funds, with it's latest, $23M fund announced in 2016. Dundee typically invests $250,000-$750,000 in rounds of $500,000-$2,000,000.
Greg Beaufait
Follow Me

Latest posts by Greg Beaufait (see all)

Leave a Reply