- Two enterprise clients signed: Dallas Housing Authority and TreeHouse Foods
- Over $266,000 in sales revenue in 2017-2018 (unaudited)
- $390,000 in new signings in 2019
- Founders have strong experience, including software roles at IBM and Motorola
- Current SAP Innovation Awards finalist
- Total Amount Raised: US $30,000
- Total Round Size: US $1,000,000
- Seed :
- Minimum Investment: US $1,000 per investor
- : Crowd Note
- US $6,000,000 :
- Side by Side Offering
BoodsKapper began with the goal of using AI and machine learning to improve the public housing system.
The federal Housing Choice Voucher Program plays a critical role in helping to address housing needs for extremely low-income households. Its most important advantage is that vouchers give recipients the freedom to choose the kinds of housing and the locations that best meet their needs. As a consequence, many voucher recipients live in healthy neighborhoods that offer social, educational, and economic opportunities for themselves and their children.
1) Public Housing Authorities are resource constrained. Families wait for months for the inspection process to be completed before they can move into a home. This adds to the problem of homelessness in America.
2) Landlords in turn wait for months, losing rent in the process. This aggravates the problem by reducing the availability of affordable housing in many markets.
3) Currently, many housing authorities don’t provide call center based support at scale. People often need to drive to the Housing Authorities to meet with their caseworkers. This is needless pain.
- We use advanced work optimization techniques to improve inspector efficiencies. For example, our client, the Dallas Housing Authority reported a 30% increase in productivity, 20% in cost savings, and improved engagement with landlords and clients.
- Our bot provides customer service for both the tenants and the landlords and we believe it leapfrogs generations of technology.
- Managers get real-time visibility into operations.
BoodsKapper makes a "virtual office assistant” that can do three things really well:
- Assign the right work order to the right technician
- Interact with the customer
- Provide conversational reporting
Assign the right work order to the right technician: This function is required in any office with employees who carry out work orders. There is a lot of classical software options such as Field Edge, Service Titan, Yardi, and SAP that solve this problem. Our difference is that we take a machine learning approach to the solution. As an example, our software is able to significantly improve inspector productivity in Public Housing Authorities (e.g. the Dallas Housing Authority reported inspector productivity increased by 30%). The inspectors drive less, get stuck in traffic less, and since the software coordinates appointments, no shows are reduced from about 20% to less than 1%.
Interact with the Customer: The work of the technician often involves coordination with a counterparty. For example, in case of a housing choice voucher inspection, there are two parties the software has to coordinate with – the landlord who intends to rent or is renting the apartment and the client who is using the voucher to live in an apartment. This is the bot side of our software. We are able to have near human-level interactions with the landlords and clients. Unlike an app with a limited number of icons that a user can interact with, the application is open-ended. We constantly learn what the clients and tenants require and train the natural language processing software to add these features. Since there are no UI changes to be made, these improvements to the production software happen almost every day.
Provide Conversational reporting: All reporting for the management is also done conversationally. Users are able to ask the application anything they want to know and get the answers immediately. For example, a Housing Choice Voucher Vice President may want to know how many inspectors are on the road at any time and can ask this question on a Siri-like interface and get the answer.
The above three skills of the virtual employee are required across a wide variety of industries. For example, our software is currently being used by a food distributor, where the primary use case is to interact with the external warehouse managers/customers and provide conversational reporting.
We charge the customers for the use of the software. Our platform provides opportunities for us to charge the customer for peripheral services; for example, landlords get the opportunity to lease to new voucher recipients who are seeking customer services from us. However, we are currently not exploring such opportunities. Pricing is based on the number of users/number of vouchers.
Bejoy worked at IBM as an Associate Partner in their Global Business Services in the Supply Chain service area. This is where he learned about Watson, specifically, and what AI can do in the world of business. After working in this area for several years, Bejoy left IBM to found BoodsKapper. KW Leong and Bejoy worked together on a project in 2010 and Bejoy and KW have been friends ever since. So when Bejoy decided to pursue his entrepreneurial dreams he convinced KW, who by then had moved back to Malaysia, to relocate back to the USA and join him as a co-founder. KW joined BoodsKapper in June of 2017 and the coding started. KW then relocated to the USA in March of 2018 when we contracted with our first enterprise customer. The product was launched in August of 2018.
Why public housing?: We are currently focused on public housing because this is a sector where our technology can have a more significant, positive impact on our clients. In many other sectors, an AI-based bot would be seen as largely a cost-saving compromise. In the public housing space, the alternative is no customer service at all.
BoodsKapper is a “virtual office assistant” who can assign the right work order to the right technician, interact with the customer and provide conversational reporting.
In the current segment where we are making traction (Public Housing Authorities), our product makes an impact on people’s lives. Our software squarely addresses the needs, such as, lack of quality control on inspections, lack of human resources (optimizing work order allocation with 30% productivity gains), and lack of management visibility. We cut down the processing time dramatically, making it possible for families to move off the street into a decent house and for landlords to earn rent instead of waiting for approvals.
SaaS business with monthly paying customers.
In the current segment of Housing Authorities, we are able to get a down payment from the customer that is a mix of one year of SaaS fees and setup fees. This down payment more than offsets CAC. We don’t expect this to continue with other segments. Nonetheless, we still expect our unit fundamentals to be better than average.
See the product insights that form our competitive advantage:
- Experienced office managers have a sense of the skills of their technicians, how much time each work order is likely to take, and an awareness of extraneous factors; such as, customer preferences and traffic. They make trade-offs and adjust the rules.
- Our first insight is that the machine can learn these skills and get much better than the human. Real time allocation of resources by the machine can improve customer satisfaction and profitability.
- Our second insight is in identifying Public Housing as a sector with acute pain where we can get customers even when we don’t have enough data to develop an ML model and the product is half baked (solving the chicken and egg problem).
- Our third insight is to take a “zero software” approach. Business executives should be able to even take policy decisions and verbally communicate to the virtual assistant with no need for IT involvement.
- Our fourth insight is to offer a network on our platform. There are several PHAs that want to share inspectors, settle the payments on our platform.
Currently our application is being used by over 18,000 users from over 3000 businesses (tenants and property managers), in large part due to our relationship with the Dallas Housing Authority. Our platform is a network where the paying customer for us are the Public Housing Authorities. Our software provides customer service to the property managers who rent to these Housing Authorities and the tenants who live in these apartments.
Two co-founders and two employees (One Machine Learning Engineer and a Full stack developer). The Machine learning Engineer is based out of Vietnam and the Full stack Developer is based out of India. We will be relocating the Machine Learning Engineer to Dallas as soon as the funding is secured. The two founders and the machine learning engineer are the founding team.
A Side by Side offering refers to a deal that is raising capital under two offering types. If you plan on investing less than US $20,000.00, you will automatically invest under the Regulation CF offering type. If you invest more than US $20,000.00, you must be an accredited investor and invest under the Regulation D offering type.
US $0 (under Reg CF only)
Investors who invest $50,000 or less will have their securities held in trust with a Custodian that will serve as a single shareholder of record. These investors will be subject to the Custodian’s Account Agreement, including the electronic delivery of all required information.
All non-Major Purchasers will be subject to an Investment Proxy Agreement (“IPA”). The IPA will authorize an investment Manager to act as representative for each non-Major Purchaser and take certain actions for their benefit and on their behalf. Please see a copy of the IPA included with Company's offering materials for additional details.
The graph below illustrates theor the of BoodsKapper's prior rounds by year.
BoodsKapper, Inc. (“the Company”) was a limited liability company organized on November 20, 2015 and was incorporated on July 9, 2018 under the laws of the State of Delaware, and is headquartered in Dallas, Texas. BoodsKapper creates software that acts as a virtual office assistant that is capable of assigning the right work order to the right electrician, interacting with customers, and providing conversational reporting.
Liquidity and Capital Resources
The proceeds from the Offering are essential to our operations. We plan to use the proceeds as set forth above under "Use of Proceeds", which is an indispensable element of our business strategy. The Offering proceeds will have a beneficial effect on our liquidity, as we have approximately $41,172.66 in cash on hand as of March 31, 2019, which will be augmented by the Offering proceeds and used to execute our business strategy.
The Company currently does not have any additional outside sources of capital other than the proceeds from the Combined Offerings.
Capital Expenditures and Other Obligations
The Company does not intend to make any material capital expenditures in the future.
Trends and Uncertainties
After reviewing the above discussion of the steps the Company intends to take, potential Purchasers should consider whether achievement of each step within the estimated time frame is realistic in their judgment. Potential Purchasers should also assess the consequences to the Company of any delays in taking these steps and whether the Company will need additional financing to accomplish them.
The financial statements are an important part of this Form C and should be reviewed in their entirety. The financial statements of the Company are attached hereto as Exhibit B.
Public Housing is a market ready for disruption. The level of technology adoption is very low. As an example, the tenants and landlord usually drive to their local housing authority office to get any customer service. We believe we are helping our clients leapfrog generations of technology adoption.
As to the size of the market, the following are our estimates for Annual Recurring Revenues for the total addressable market in the USA:
- Public Housing - $100M
- Repair categories; such as, HVAC, Plumber, etc. - $100M
- Routine maintenance categories; such as, pool services, pesticide handlers, etc. - $50B
- Medical device distribution agencies - $200B
The Company’s cash position is relatively weak. The Company currently has $41,172.66 in cash balances as of March 31, 2019. This equates to three months of runway. The Company believes that it is able to continue extracting cash from sales to extend its runway. The Company could be harmed if it is unable to meet its cash demands, and the Company may not be able to continue operations if they are not able to raise additional funds.
The Company depends on a limited number of customers for a substantial majority of its revenue. If the Company fails to retain or expand its customer relationships or if its customers cancel or reduce their purchase commitments, its revenue could decline significantly. Currently, revenue is concentrated in 2 main customers which are responsible for approximately all of the current revenue. As a result of this customer concentration, the Company’s revenue could fluctuate materially and could be materially and disproportionately impacted by purchasing decisions of its significant customer. In the future, any significant customer may alter their purchasing patterns at any time with limited notice, or may decide not to continue to purchase the Company’s solutions at all, which could cause its revenue to decline materially and materially harm its financial condition and results of operations. If the Company is not able to diversify its customer base, it will continue to be susceptible to risks associated with customer concentration. If the Company were to lose these clients, it could be harmed and may not be able to continue operations if they are not able to add additional clients to fill the loss. Additionally, while the Company has added several thousand users on the platform as a result of its relationship with their two paying customers, the Company has not shown that they can monetize the participation of these property managers on their platform.
The Company does not currently hold any intellectual property and they may not be able to obtain such intellectual property. As a cloud software building, the Company decided not to disclose their trade secrets and does not currently hold any patents. Therefore, their ability to obtain protection for their intellectual property (whether through patent, trademark, copyright, or other IP right) is uncertain due to a number of factors, including that the Company may not have been the first to make the inventions. The Company has not conducted any formal analysis of the “prior art” in their technology, and the existence of any such prior art would bring the novelty of their technologies into question and could cause the pending patent applications to be rejected. Further, changes in U.S. and foreign intellectual property law may also impact their ability to successfully prosecute their IP applications. For example, the United States Congress and other foreign legislative bodies may amend their respective IP laws in a manner that makes obtaining IP more difficult or costly. Courts may also render decisions that alter the application of IP laws and detrimentally affect their ability to obtain such protection. Even if the Company is able to successfully register IP, this intellectual property may not provide meaningful protection or commercial advantage. Such IP may not be broad enough to prevent others from developing technologies that are similar or that achieve similar results to theirs. It is also possible that the intellectual property rights of others will bar the Company from licensing their technology and bar them or their customer licensees from exploiting any patents that issue from our pending applications. Finally, in addition to those who may claim priority, any patents that issue from our applications may also be challenged by their competitors on the basis that they are otherwise invalid or unenforceable.
The Company relies heavily on their technology and intellectual property, but they may be unable to adequately or cost-effectively protect or enforce their intellectual property rights, thereby weakening their competitive position and increasing operating costs. To protect their rights in our services and technology, they rely on a combination of copyright and trademark laws, patents, trade secrets, confidentiality agreements with employees and third parties, and protective contractual provisions. They also rely on laws pertaining to trademarks and domain names to protect the value of their corporate brands and reputation. Despite their efforts to protect their proprietary rights, unauthorized parties may copy aspects of their services or technology, obtain and use information, marks, or technology that they regard as proprietary, or otherwise violate or infringe their intellectual property rights. In addition, it is possible that others could independently develop substantially equivalent intellectual property. If they do not effectively protect their intellectual property, or if others independently develop substantially equivalent intellectual property, their competitive position could be weakened.
Effectively policing the unauthorized use of their services and technology is time-consuming and costly, and the steps taken by them may not prevent misappropriation of their technology or other proprietary assets. The efforts they have taken to protect our proprietary rights may not be sufficient or effective, and unauthorized parties may copy aspects of their services, use similar marks or domain names, or obtain and use information, marks, or technology that they regard as proprietary. They may have to litigate to enforce their intellectual property rights, to protect their trade secrets, or to determine the validity and scope of others’ proprietary rights, which are sometimes not clear or may change. Litigation can be time consuming and expensive, and the outcome can be difficult to predict.
The Company’s sales cycle is long and may be unpredictable, which can result in variability of its financial performance. Additionally, long sales cycles may require the Company to incur high sales and marketing expenses with no assurance that a sale will result, which could adversely affect its profitability. The Company’s results of operations may fluctuate, in part, because of the resource-intensive nature of its sales efforts and the length and variability of the sales cycle. A sales cycle is the period between initial contact with a prospective customer and any sale of its product. The sales process involves educating customers about the Company’s product, participating in extended product evaluations and configuring the product to customer-specific needs. The length of the sales cycle, from initial contact with a customer to the execution of a purchase order, is generally 6 to 24 months. During the sales cycle, the Company may expend significant time and money on sales and marketing activities or make other expenditures, all of which lower its operating margins, particularly if no sale occurs or if the sale is delayed as a result of extended qualification processes or delays. It is difficult to predict when, or even if, it will make a sale to a potential customer or if the Company can increase sales to existing customers. As a result, the Company may not recognize revenue from sales efforts for extended periods of time, or at all. The loss or delay of one or more large transactions in a quarter could impact its results of operations for that quarter and any future quarters for which revenue from that transaction is lost or delayed.
Failure to obtain new clients or renew client contracts on favorable terms could adversely affect results of operations. The Company may face pricing pressure in obtaining and retaining their clients. Their clients may be able to seek price reductions from them when they renew a contract, when a contract is extended, or when the client’s business has significant volume changes. Their clients may also reduce services if they decide to move services in-house. On some occasions, this pricing pressure results in lower revenue from a client than the Company had anticipated based on their previous agreement with that client. This reduction in revenue could result in an adverse effect on their business and results of operations.
Further, failure to renew client contract son favorable terms could have na adverse effect on their business. The Company's contracts with clients generally run for several years and include liquidated damage provisions that provide for early termination fees. Terms are generally renegotiated prior to the end of a contract’s term. If they are not successful in achieving a high rate of contract renewals on favorable terms, their business and results of operations could be adversely affected.
The Company is subject to rapid technological change and dependence on new product development. The Company’s industry is characterized by rapid and significant technological developments, frequent new product introductions and enhancements, continually evolving business expectations and swift changes. To compete effectively in such markets, they must continually improve and enhance its products and services and develop new technologies and services that incorporate technological advances, satisfy increasing customer expectations and compete effectively on the basis of performance and price. Their success will also depend substantially upon our ability to anticipate, and to adapt our products and services to our collaborative partner’s preferences. There can be no assurance that technological developments will not render some of our products and services obsolete, or that they will be able to respond with improved or new products, services, and technology that satisfy evolving customers’ expectations. Failure to acquire, develop or introduce new products, services, and enhancements in a timely manner could have an adverse effect on our business and results of operations. Also, to the extent one or more of their competitors introduces products and services that better address a customer’s needs, our business would be adversely affected.
The Company's business could be negatively impacted by cyber security threats, attacks and other disruptions. Like others in their industry, the Company continues to face advanced and persistent attacks on their information infrastructure where they manage and store various proprietary information and sensitive/confidential data relating to their operations. These attacks may include sophisticated malware (viruses, worms, and other malicious software programs) and phishing emails that attack their products or otherwise exploit any security vulnerabilities. These intrusions sometimes may be zero-day malware that are difficult to identify because they are not included in the signature set of commercially available antivirus scanning programs. Experienced computer programmers and hackers may be able to penetrate their network security and misappropriate or compromise their confidential information or that of their customers or other third-parties, create system disruptions, or cause shutdowns. Additionally, sophisticated software and applications that they produce or procure from third-parties may contain defects in design or manufacture, including "bugs" and other problems that could unexpectedly interfere with the operation of the information infrastructure. A disruption, infiltration or failure of their information infrastructure systems or any of their data centers as a result of software or hardware malfunctions, computer viruses, cyber attacks, employee theft or misuse, power disruptions, natural disasters or accidents could cause breaches of data security, loss of critical data and performance delays, which in turn could adversely affect their business.
Through the Company’s operations, they collect and store certain personal information that their customers provide to purchase products or services, enroll in promotional programs, register on their website, or otherwise communicate and interact with us. They may share information about such persons with vendors that assist with certain aspects of their business. Security could be compromised and confidential customer or business information misappropriated. Loss of customer or business information could disrupt their operations, damage their reputation, and expose them to claims from customers, financial institutions, payment card associations and other persons, any of which could have an adverse effect on their business, financial condition and results of operations. In addition, compliance with tougher privacy and information security laws and standards may result in significant expense due to increased investment in technology and the development of new operational processes.
The Company’s principal shareholders own voting control of the Company. Their current officers, directors, founders, and principal shareholders currently own a total of 5,000,000 shares of Common Stock or 100% of the total issued and outstanding capital stock of the Company. Their principal shareholders will own a majority of their Common Stock following the Offering. These shareholders are able to exercise significant control over all matters requiring shareholder approval, including the election of directors and approval of significant corporate transactions. This concentration of ownership may have the effect of delaying or preventing a change in control and might adversely affect the market price of their common stock. This concentration of ownership may not be in the best interests of all their shareholders.
The Company has generated substantial net losses and negative operating cash flows since its inception as part of the development of its business. The Company has generated substantial net losses and negative cash flows from operating activities since it commenced operations. It has incurred losses of approximately $18,758 from its inception through December 31, 2017. For the year ended December 31, 2018, it incurred a net loss of $47,370. Before achieving profitability it will generate continued losses. Its costs may also increase due to such factors as higher than anticipated financing and other costs; non-performance by third-party suppliers, licensees, partners or subcontractors; and increases in the costs of labor or materials. If any of these or similar factors occur, its net losses and accumulated deficit could increase significantly and the value of its stock could decline.
The development and commercialization of the Company’s products and services are highly competitive. It faces competition with respect to any products and services that it may seek to develop or commercialize in the future. Its competitors include major companies worldwide. The AI Technology market is an emerging industry where new competitors are entering the market frequently. Many of the Company’s competitors have significantly greater financial, technical and human resources and may have superior expertise in research and development and marketing approved services and thus may be better equipped than the Company to develop and commercialize services. These competitors also compete with the Company in recruiting and retaining qualified personnel and acquiring technologies. Smaller or early stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. Accordingly, the Company’s competitors may commercialize products more rapidly or effectively than the Company is able to, which would adversely affect its competitive position, the likelihood that its services will achieve initial market acceptance and its ability to generate meaningful additional revenues from its products and services.
The Company must correctly predict, identify, and interpret changes in consumer preferences and demand, offer new products to meet those changes, and respond to competitive innovation. Consumer preferences for their products change continually. The Company’s success depends on their ability to predict, identify, and interpret the tastes and habits of consumers and to offer products that appeal to consumer preferences. If the Company does not offer products that appeal to consumers, their sales and market share will decrease. The Company must distinguish between short-term fads, mid-term trends, and long-term changes in consumer preferences. If the Company does not accurately predict which shifts in consumer preferences will be long-term, or if they fail to introduce new and improved products to satisfy those preferences, their sales could decline. In addition, because of their varied customer base, they must offer an array of products that satisfy the broad spectrum of consumer preferences. If the Company fails to expand their product offerings successfully across product categories, or if they do not rapidly develop products in faster growing and more profitable categories, demand for their products could decrease, which could materially and adversely affect their product sales, financial condition, and results of operations.
In addition, achieving growth depends on the Company's successful development, introduction, and marketing of innovative new products and line extensions. Successful innovation depends on their ability to correctly anticipate customer and consumer acceptance, to obtain, protect and maintain necessary intellectual property rights, and to avoid infringing the intellectual property rights of others and failure to do so could compromise their competitive position and adversely impact their business
The Company may be unable to maintain, promote, and grow its brand through marketing and communications strategies. It may prove difficult for the Company to dramatically increase the number of customers that it serves or to establish itself as a well-known brand in the competitive AI Technology space. Additionally, the product may be in a market where customers will not have brand loyalty.
The Company has outstanding liabilities. The Company owes (i) $22,045 in accounts payable, (ii) approximately $4,155.29 in accrued expenses, (iii) $9,833 to Crestline in sale of future receivables, and (iv) $440,495 to Bejoynath Narayanapillai in shareholder advances, with open due dates. These shareholder advances are non-interest bearing, have no repayment terms and are payable on demand. The Company has stated that the amounts will only be paid back as operations cash flows allow.
Maintaining, extending and expanding our reputation and brand image are essential to the Company’s business success. The Company seeks to maintain, extend, and expand their brand image through marketing investments, including advertising and consumer promotions, and product innovation. Increasing attention on marketing could adversely affect their brand image. It could also lead to stricter regulations and greater scrutiny of marketing practices. Existing or increased legal or regulatory restrictions on their advertising, consumer promotions and marketing, or their response to those restrictions, could limit their efforts to maintain, extend and expand their brands. Moreover, adverse publicity about regulatory or legal action against us could damage our reputation and brand image, undermine their customers’ confidence and reduce long-term demand for their products, even if the regulatory or legal action is unfounded or not material to their operations.
In addition, the Company’s success in maintaining, extending, and expanding their brand image depends on their ability to adapt to a rapidly changing media environment. The Company increasingly relies on social media and online dissemination of advertising campaigns. The growing use of social and digital media increases the speed and extent that information or misinformation and opinions can be shared. Negative posts or comments about the Company, its brands or its products on social or digital media, whether or not valid, could seriously damage their brands and reputation. If the Company does not establish, maintain, extend and expand their brand image, then their product sales, financial condition and results of operations could be adversely affected.
The Company plans to implement new lines of business or offer new products and services within existing lines of business. There are substantial risks and uncertainties associated with these efforts, particularly in instances where the markets are not fully developed. In developing and marketing new lines of business and/or new products and services, the Company may invest significant time and resources. Initial timetables for the introduction and development of new lines of business and/or new products or services may not be achieved and price and profitability targets may not prove feasible. The Company may not be successful in introducing new products and services in response to industry trends or developments in technology, or those new products may not achieve market acceptance. As a result, the Company could lose business, be forced to price products and services on less advantageous terms to retain or attract clients, or be subject to cost increases. As a result, the Company’s business, financial condition or results of operations may be adversely affected.
Industry consolidation may result in increased competition, which could result in a loss of customers or a reduction in revenue. Some of our competitors have made or may make acquisitions or may enter into partnerships or other strategic relationships to offer more comprehensive services than they individually had offered or achieve greater economies of scale.
The CTO is currently paid a high salary and the CEO plans to increase his salary post offering. The Company’s CTO is currently and the Company’s CEO will be paid a salary that is high relative to the stage of the Company’s business, and personnel costs represent a significant portion of the Company’s operating expenses. High executive compensation results in a higher overall salary burn, which in turn shortens the runway for achieving desired traction and company milestones. High executive compensation can leave a negative impression with new or potential investors who may believe that conservatively compensated founder-CEOs are more focused on driving towards the long-term success of the business. It may therefore negatively impact the ability of the Company to raise funds.
We have not prepared any audited financial statements. Therefore, you have no audited financial information regarding the Company’s capitalization or assets or liabilities on which to make your investment decision. If you feel the information provided is insufficient, you should not invest in the Company.
The Company has not filed a Form D for its previous offerings. The SEC rules require a Form D to be filed by companies within 15 days after the first sale of securities in the offering relying on Regulation D. Failing to register with the SEC or get an exemption may lead to fines, the right of investors to get their investments back, and even criminal charges. There is a risk that a late penalty could apply.
The company is subject to many U.S. federal and state laws and regulations, including those related to privacy, rights of publicity, and law enforcement. These laws and regulations are constantly evolving and may be interpreted, applied, created, or amended, in a manner that could harm our business. The technology and use of the technology in our product may not be legislated, and it is uncertain whether different states will legislate around this technology, and, if they do, how they will do so. Violating existing or future regulatory orders or consent decrees could subject us to substantial monetary fines and other penalties that could negatively affect our financial condition and results of operations.
Start-up investing is risky. Investing in startups is very risky, highly speculative, and should not be made by anyone who cannot afford to lose their entire investment. Unlike an investment in a mature business where there is a track record of revenue and income, the success of a startup or early-stage venture often relies on the development of a new product or service that may or may not find a market. Before investing, you should carefully consider the specific risks and disclosures related to both this offering type and the company which can be found in this company profile and the documents in the data room below.
Your shares are not easily transferable. You should not plan on being able to readily transfer and/or resell your security. Currently there is no market or liquidity for these shares and the company does not have any plans to list these shares on an exchange or other secondary market. At some point the company may choose to do so, but until then you should plan to hold your investment for a significant period of time before a “liquidation event” occurs. A “liquidation event” is when the company either lists their shares on an exchange, is acquired, or goes bankrupt.
The Company may not pay dividends for the foreseeable future. Unless otherwise specified in the offering documents and subject to state law, you are not entitled to receive any dividends on your interest in the Company. Accordingly, any potential investor who anticipates the need for current dividends or income from an investment should not purchase any of the securities offered on the Site.
Valuation and capitalization. Unlike listed companies that are valued publicly through market-driven stock prices, the valuation of private companies, especially startups, is difficult to assess and you may risk overpaying for your investment. In addition, there may be additional classes of equity with rights that are superior to the class of equity being sold.
You may only receive limited disclosure. While the company must disclose certain information, since the company is at an early-stage they may only be able to provide limited information about its business plan and operations because it does not have fully developed operations or a long history. The company may also only obligated to file information periodically regarding its business, including financial statements. A publicly listed company, in contrast, is required to file annual and quarterly reports and promptly disclose certain events through continuing disclosure that you can use to evaluate the status of your investment.
Investment in personnel. An early-stage investment is also an investment in the entrepreneur or management of the company. Being able to execute on the business plan is often an important factor in whether the business is viable and successful. You should be aware that a portion of your investment may fund the compensation of the company's employees, including its management. You should carefully review any disclosure regarding the company's use of proceeds.
Possibility of fraud. In light of the relative ease with which early-stage companies can raise funds, it may be the case that certain opportunities turn out to be money-losing fraudulent schemes. As with other investments, there is no guarantee that investments will be immune from fraud.
Lack of professional guidance. Many successful companies partially attribute their early success to the guidance of professional early-stage investors (e.g., angel investors and venture capital firms). These investors often negotiate for seats on the company's board of directors and play an important role through their resources, contacts and experience in assisting early-stage companies in executing on their business plans. An early-stage company may not have the benefit of such professional investors.
Representatives of SI Securities, LLC are affiliated with SI Advisors, LLC (“SI Advisors”). SI Advisors is an exempt investment advisor that acts as the General Partner of SI Selections Fund I, L.P. (“SI Selections Fund”). SI Selections Fund is an early stage venture capital fund owned by third-party investors. From time to time, SI Selections Fund may invest in offerings made available on the SeedInvest platform, including this offering. Investments made by SI Selections Fund may be counted towards the total funds raised necessary to reach the minimum funding target as disclosed in the applicable offering materials.
Frequently Asked Questions
A Side by Side offering refers to a deal that is raising capital under two offering types. This Side by Side offering is raising under Regulation CF and Rule 506(c) of Regulation D.
The Form C is a document the company must file with the Securities and Exchange Commission (“SEC”) which includes basic information about the company and its offering and is a condition to making a Reg CF offering available to investors. It is important to note that the SEC does not review the Form C, and therefore is not recommending and/or approving any of the securities being offered.
Before making any investment decision, it is highly recommended that prospective investors review the Form C filed with the SEC (included in the company's profile) before making any investment decision.
Rule 506(c) under Regulation D is a type of offering with no limits on how much a company may raise. The company may generally solicit their offering, but the company must verify each investor’s status as an accredited investor prior to closing and accepting funds. To learn more about Rule 506(c) under Regulation D and other offering types check out our blog and academy.
Title III of the JOBS Act outlines Reg CF, a type of offering allowing private companies to raise up to $1 million from all Americans. Prior capital raising options limited private companies to raising money only from accredited investors, historically the wealthiest ~2% of Americans. Like a Kickstarter campaign, Reg CF allows companies to raise funds online from their early adopters and the crowd. However, instead of providing investors a reward such as a t-shirt or a card, investors receive securities, typically equity, in the startups they back. To learn more about Reg CF and other offering types check out our blog and academy.
When you complete your investment on SeedInvest, your money will be transferred to an escrow account where an independent escrow agent will watch over your investment until it is accepted by BoodsKapper. Once BoodsKapper accepts your investment, and certain regulatory procedures are completed, your money will be transferred from the escrow account to BoodsKapper in exchange for your securities. At that point, you will be a proud owner in BoodsKapper.
To make an investment, you will need the following information readily available:
- Personal information such as your current address and phone number
- Employment and employer information
- Net worth and income information
- Social Security Number or passport
- ABA bank routing number and checking account number (typically found on a personal check or bank statement)
If you are investing under Rule 506(c) of Regulation D, your status as an Accredited Investor will also need to be verified and you will be asked to provide documentation supporting your income, net worth, revenue, or net assets or a letter from a qualified advisor such as a Registered Investment Advisor, Registered Broker Dealer, Lawyer, or CPA.
An investor is limited in the amount that he or she may invest in a Reg CF offering during any 12-month period:
- If either the annual income or the net worth of the investor is less than $100,000, the investor is limited to the greater of $2,000 or 5% of the lesser of his or her annual income or net worth.
- If the annual income and net worth of the investor are both greater than $100,000, the investor is limited to 10% of the lesser of his or her annual income or net worth, to a maximum of $100,000.
Separately, BoodsKapper has set a minimum investment amount of US $1,000.
Accredited investors investing $20,000 or over do not have investment limits.
You are a partial owner of the company, you do own securities after all! But more importantly, companies which have raised money via Regulation CF must file information with the SEC and post it on their websites on an annual basis. Receiving regular company updates is important to keep shareholders educated and informed about the progress of the company and their investment. This annual report includes information similar to a company’s initial Reg CF filing and key information that a company will want to share with its investors to foster a dynamic and healthy relationship.
In certain circumstances a company may terminate its ongoing reporting requirement if:
- The company becomes a fully-reporting registrant with the SEC
- The company has filed at least one annual report, but has no more than 300 shareholders of record
- The company has filed at least three annual reports, and has no more than $10 million in assets
- The company or another party purchases or repurchases all the securities sold in reliance on Section 4(a)(6)
- The company ceases to do business
However, regardless of whether a company has terminated its ongoing reporting requirement per SEC rules, SeedInvest works with all companies on its platform to ensure that investors are provided quarterly updates. These quarterly reports will include information such as: (i) quarterly net sales, (ii) quarterly change in cash and cash on hand, (iii) material updates on the business, (iv) fundraising updates (any plans for next round, current round status, etc.), and (v) any notable press and news.
Currently there is no market or liquidity for these securities. Right now BoodsKapper does not plan to list these securities on a national exchange or another secondary market. At some point BoodsKapper may choose to do so, but until then you should plan to hold your investment for a significant period of time before a “liquidation event” occurs. A “liquidation event” is when BoodsKapper either lists their securities on an exchange, is acquired, or goes bankrupt.
You can return to SeedInvest at any time to view your portfolio of investments and obtain a summary statement. If invested under Regulation CF you may also receive periodic updates from the company about their business, in addition to monthly account statements.
This is BoodsKapper's fundraising profile page, where you can find information that may be helpful for you to make an investment decision in their company. The information on this page includes the company overview, team bios, and the risks and disclosures related to this investment opportunity. If the company runs a side by side offering that includes an offering under Regulation CF, you may also find a copy of the BoodsKapper's Form C. The Form C includes important details about BoodsKapper's fundraise that you should review before investing.
For offerings made under Regulation CF, you may cancel your investment at any time up to 48 hours before a closing occurs or an earlier date set by the company. You will be sent a reminder notification approximately five days before the closing or set date giving you an opportunity to cancel your investment if you had not already done so. Once a closing occurs, and if you have not canceled your investment, you will receive an email notifying you that your securities have been issued. If you have already funded your investment, your funds will be promptly refunded to you upon cancellation. To cancel your investment, you may go to your portfolio page
If you invest under any other offering type, you may cancel your investment at any time, for any reason until a closing occurs. You will receive an email when the closing occurs and your securities have been issued. If you have already funded your investment and your funds are in escrow, your funds will be promptly refunded to you upon cancellation. To cancel your investment, please go to your portfolio page.