- Net revenue at New York City location was $1,868,226 in 2017, grew 71% from 2008; Operating margin grew 17.36% in 2016 to 22.16% in 2017
- Newly opened Denver location hit target revenue of $313K in May, the first month of operation
- Shipped 120K Death & Co books to date, generating a total of $379K in royalties ($230k was paid out as an advance)
- Proprietors LLC, the company’s consulting arm, billed $539K in revenue in 2017 with three employees and opportunity to scale; Notable clients include Hilton, Pacific Theaters, Bacardi USA, Pernod Ricard, Back Bar Brands, Wyoming Whiskey, NeueHouse, and StellaRosa (Lettuce Entertain You)
- Death & Co has achieved consistent praise in the space, featured in Forbes, Food & Wine, Travel & Leisure, The New York Times, and more; the company won the American Cocktail Bar and World's Best Cocktail Menu by the Tales of the Cocktail Spirited Awards, among others
- Total Amount Raised: US $2,115,575
- Total Round Size: US $3,000,000
- Series A :
- Minimum Investment: US $1,000 per investor
- : Preferred Equity
- US $13,000,000 :
- Side by Side Offering
We are offering investment in the Death & Co landscape, comprising of two existing bar properties, one in New York City and one in Denver, with a third on the way in Los Angeles, all future bars, both ownership and management, all uses of the brand, as well as Death & Co’s consulting and management company, Proprietors LLC. The Death & Co offering, with its recognized best in class brand, is structured to generate ever-growing distributions year over year with an eventual sale, ensuring a high multiple exit.
In 12 years of business, Death & Co’s success as a strong business and a versatile brand has made it one of the most significant names in bar culture.
Awards and accolades:
- America’s 20 Best Cocktail Bars, 2008 GQ
- America’s 25 Best Cocktail bars, 2010 GQ
- World’s Best Cocktail Menu, 2010 Tales of the Cocktail Spirited Awards
- Best American Cocktail Bar, 2010 Tales of the Cocktail Spirited Awards
- One of the Best Bars in the Country, 2010, 2011, 2012 Best of Barfinder.com
- Worlds 100 Best Bars, 2011, 2012, 2016 and 2017, Drinks International
- Best Bars in America, 2017 Esquire
- Best Bars in New York City, 2018 Conde Nast Traveler
Death & Co New York
Steady growth of the business year over year, generating $1.8 million in revenue in 2017 at a 22% operating margin.
The Death & Co Book
On October 7th, 2014 Death & Co: Modern Classic Cocktails was released, currently setting pace as one of the best-selling cocktail books of all time, making the Death & Co brand a household name.
- The Death & Co Book was nominated for an IACP Global Design Award, a James Beard Award, and a Tales of the Cocktail Spirited Award for Best New Cocktail Book
Death & Co Denver
In May of 2018, Death & Co Denver opened in The Ramble Hotel, marking the company’s first foray into full-service food, beverage and hotel integration. Death & Co Denver is comprised of various concepts and it is on track to outperform early projections of $4.5 million in revenue and 15% net profit in its first full year of business.
Death & Co Los Angeles
The company has a below-market lease for Death & Co Los Angeles in the booming Arts District, adjacent to the Downtown neighborhood. The three thousand-square-foot space will be a return to certain aspects of the New York City flagship; it will be an independent property not affiliated with a hotel, minimal food service, and a similar look and feel to the flagship Death & Co, but with greater revenue potential from two bar rooms and a larger capacity.
Death & Co Bars
The Death & Co brand aims to become synonymous with creative, perfectly crafted cocktails and impeccable hospitality. Our bars are environments of refuge, establishments defined by refined service and excellent product – built for the express purpose of allowing guests to take a moment and connect with one another. This is at the core of the bar’s aesthetic and offerings, and it is a focus that will maintain for the life of the brand.
12 years ago, Death & Co New York City set out to do what we believe no other bar had done before, empowering a bar team with creative authorship in every element of programming. In doing so, the bar leaped to the forefront of the industry with inventive, genre-defining drinks and bar service innovations. Staff standing behind their own product allowed and still continues to allow for a deeper sense of pride in execution and passion, and has created a tight-knit culture of invested employees. Death & Co’s focus on creativity and reinvention has never waned, allowing the bars to continue to attract world-class talent.
“It would have been easy to sit back and continue the status quo,” says current Beverage Director, Tyson Buhler. “The thing I love most about this bar is that my co-workers and owners never saw that as an option. We wanted to continue to push ourselves and show our guests and peers the level of dedication and care that this staff carries out each day.”
Death & Co Business Model
- Death & Co Ownership Properties: Leased spaces in major markets. Built out, opened and operated by D&C.
- Death & Co Management Deals*: Requiring no up-front capital and typically living in a larger project, such as a hotel. D&C receives an up-front fee for pre-opening services, followed by a percentage of gross revenue and a percentage of net income.
- Death & Co + The Ramble: D&C has aligned with the ownership of The Ramble Hotel** to grow both brands in tandem, working with developers to build and deliver hotels with food and beverage spaces to our specifications. Our two companies would negotiate for equity in the real estate aspect of each development, as well as manage the entire operations of the hotel and the food and beverage. Revenue will be captured through management fees and distributions of profits.
- Death & Co Licensing Deals: Licensing deals for brand usage across various verticals. The company is currently in negotiation for a Death & Co-branded bottled cocktail, as one example.
- Death & Co Retail Sales: D&C-branded merchandise has an established track record of success with new product release and effective PR and marketing. The company has yet to truly tap into this revenue center; with growth, D&C will focus on capitalizing on opportunities for retail sales, including our already-popular custom Tiki mugs (and developing more), clothing, glassware, etc.
- ProprietorsLLC Consulting: ProprietorsLLC is a low-overhead consulting and services company specializing in the cocktail space. Clients, such as Hilton, Arclight Cinemas, Lettuce Entertain You and MGM, have hired Proprietors to design their bar spaces, cocktail programs, and to train their staffs. Proprietors is regarded globally as a premier services company in the space, with a ten year track record of success.
- ProprietorsLLC Management: ProprietorsLLC creates new food and beverage concepts for clients from the ground-up and manages ongoing operations. Revenu is generated through up-front fees, as well as an ongoing percentage of gross and percentage of net. These concepts have unique identities outside of the Death & Co brand, allowing the company creative and operational flexibility with strong financial returns.
*D&C does not have a signed management deal agreement.
**D&C has signed a non-binding term sheet with The Ramble Hotel. This statement does not represent guarantees of future results, levels of activity, performance, or achievements.
The Death & Co customer base resides primarily in dense urban markets with thriving food and beverage scenes. They travel extensively, have a mid- to high-level of disposable income, and seek out new experiences regularly. The company’s core clientele has historically ranged between early twenties and mid-forties, but due to the brand’s penetration of mass culture, D&C’s demographics have often skewed into the sixties and seventies. Instagram analytics inform that the bulk of followers of the Death & Co handle are currently from New York, London, Los Angeles, Chicago, and Toronto. Approximately 60% of followers are male, however in-store customer demographics skew differently with approximately 55% female guests.
Death & Co has an edge on potential competition in attracting market’s most talented hospitality talent, as well as brand resonance far beyond the physical locations of the bar. This is illustrated by annual media impression statistics, significant social media following, continuing strong book sales, and a strong reputation within the hospitality industry. Death & Co has worked hard to become a best-in-class employer, attracting a diverse and talented staff by offering healthcare to all full-time employees over 30 hours per week, monthly wellness offsets, and giving 1% of gross sales to local non-profits in the surrounding areas of each location (chosen by the staff of each venue). Death & Co’s reputation as an employer continues to allow the company to attract outstanding staff for each of its ownership and management deals, a cornerstone of the company’s success and a focus of its growth. ProprietorsLLC has focused on refining training and management practices, opening between five and ten properties a year for clients over the past ten years. This skill set and cumulative learning is an asset to Death & Co as an additional edge over competitors in the industry.
For as far back as I can remember, I have always been surrounded by entrepreneurs who were also all fantastic hosts. Early memories of setting up dinner parties, serving family and friends drinks, and the warm laughter that filled a lively room have undeniably informed my career path. I was encouraged to work in food and beverage as soon as I was of legal age to do so, starting first as a soda jerk at an old-fashioned soda fountain. From that first job, shaking the hospitality bug was never in the cards – it would, in fact, shape and define every professional choice I’ve made throughout my life.
After college, I spent a year in Las Vegas working for the Nine Group, rotating through as many positions as possible – to learn, to explore, and to see the many shapes that hospitality takes within a company that operated all the bars and restaurants at the then exceptionally popular Palms Casino. On off days, that year was also filled with drafting and redrafting business plans, working with the successful entrepreneurs within my family to refine pro-formas, and visiting every cocktail bar in New York and Los Angeles. I filled notebooks cover to cover with details from each, absorbing as much as possible from the best operations of the time. I built out a plan that would become Death & Co New York.
A few short months after moving to New York, I met Ravi DeRossi, the proprietor of a soul-filled wine bar just down from my apartment. We spent nights chatting about our shared vision for a new type of cocktail bar. Ravi already tackled a New York opening and brought a level of operational acumen. Aligning on each aspect of the new concept, we sought out a location that ticked all the boxes and found one just a block South of Ravi’s bar on East 6th Street.
We opened Death & Co less than a year after I arrived in New York City, just two years out of college. We were feverishly working to understand our new business when we took notice of Alex Day, a regular at the time who was running a great cocktail program on the Lower East Side. Alex would first come to work at Death & Co as a bartender, then become a partner in ProprietorsLLC, and eventually a partner in the larger Death & Co landscape. Alex brought his fluency as a former bartender to the ownership group that rounded out our collective skillset.
A comprehensive training program ranges from two to three weeks depending on the scale and complexity of the individual property. Staff retention is focused around a progressive culture of open communication, giving back to the local communities, ongoing education, upward mobility and cross training, and open book management. For Denver, we had 500 applicants for 70 positions.
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 $992,590 (under Reg CF only)
Series A Preferred Unit holders will receive at liquidation, provided enough assets remain, an amount equal to the sum of (a) their aggregate capital contribution, plus (b) an amount equal to a return of 8% annually non-compounding on such aggregate capital contribution. This sum may be reduced ahead of liquidation by the amount of cumulative distributions to Series A Preferred Units, provided that such reductions do not reduce the amount on which the 8% annually non-compounding return is calculated.
See data room "Gin & Luck Liquidation Scenario Model" for illustrative example.
Following distribution of the Liquidation Preference and Deferred Interest Amount to Preferred Unit Holders, provided enough assets remain, Common Unit holders receive back 100% of their unreturned aggregate capital contribution. Lastly, any remaining assets will be distributed to Unit Holders on a pro-rata basis.
See data room "Gin & Luck Liquidation Scenario Model" for illustrative example.
All non-Major Purchasers will be subject to an Investment Proxy Agreement "IPA". The IPA will authorize SeedInvest 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 the Company's offering materials for additional details.
In order to conduct a close, Gin & Luck must complete and execute a reorganization of itself and its affiliated entities, such that all operations, business, and assets of the company and its affiliated will fall under Gin & Luck LLC.
Early Bird Specials:
*Invest by 11:59pm ET on Monday, August 6th to receive the next tier of perks (one tier up from your investment amount). Applicable for $5,000 investments and above.
*First 50 investors to invest $1,000 or more will receive a custom Death & Co team t-shirt (as you're now part of the Death & Co family).
- Tier 1. Investors of $2,500 or more will receive a signed copy of the Death & Co book + the Death & Co Custom T.
- Tier 2. Investors of $5,000 or more will receive Tier 1 perks, plus priority reservations at all Death & Co properties.
- Tier 3: Investors of $20,000 or more will receive Tier 2 perks, plus 10% off at all Death & Co properties for life
- BRONZE. Investors of $50,000 or more will receive Tier 3 perks, plus a one-on-one cocktail tutorial with celebrated bartender Tyson Buhler, Death & Co.'s national beverage director.
- SILVER. Investors of $75,000 or more will receive BRONZE perks, plus an invitation to participate in regular scheduled quarterly call with Gin & Luck + Death & Co senior management.
- GOLD. Investors of $100,000 or more will receive SILVER perks, plus a private cocktail class for up to 20 guests at a location of their choosing
- PLATINUM. Investors of $200,000 or more will receive GOLD perks, plus a catered cocktail party for up to 50 guests at a location of their choosing, and your name submitted in a lottery to name a cocktail
- DIAMOND. Investors of $500,000 or more will receive PLATINUM perks, plus a definite cocktail in your name, and private invitations to any future launch parties (travel included)
It is advised that you consult a tax professional to fully understand any potential tax implications of receiving investor perks before making an investment.
Financial statements can be found in the Data Room. These financial statements include 1) the financials for Gin & Luck LLC, which have been reviewed by a CPA, 2) the financials for Death & Co Denver LLC, which have NOT been reviewed by a CPA, 3) the financials for Little Hands Play Café Inc., which have NOT been reviewed by a CPA, and 4) the financials for Proprietors, LLC, which have NOT been reviewed by a CPA.
Gin & Luck LLC
Gin & Luck LLC (“the Company”) is a limited liability company organized on June 9, 2017 under the laws of the State of Delaware, and headquartered in Los Angeles, California. The Company was formed to acquire and act as a holding company for entities associated with the Death & Co brand. The Company has not yet begun principal operations.
Death & Co East Village LLC
Little Hands Play Café, Inc. (dba Death & Co.) is an S corporation incorporated on April 30, 1996 under the laws of the State of New York, and headquartered in New York, New York. The entity operates a critically acclaimed and award‐winning bar in New York’s East Village, that specializes in the formulation of original new era cocktails.
Prior to the Closing, Little Hands Play Café, Inc. will enter into a contribution agreement with Death & Co East Village LLC, in which Little Hands Play Café, Inc. will agree to transfer all assets to Death & Co East Village LLC, in exchange for 100% membership interest in Death & Co East Village LLC. Subsequent to the transaction described in the previous sentence, Little Hands Play Café Inc. will contribute all of its ownership in Death & Co East Village LLC to the Company in exchange for a certain amount of Common Units in the Company. Thereafter, Little Hands Play Café will solely function as a passive Member of Gin & Luck LLC.
During the two years ended December 31, 2017 and 2016, the entity earned revenues of $1,868,226 for the year ending 2017 and $1,677,144 for the year ending 2016. The entity has sustained net profit of $128,500 and $60,019 during the years ended December 31, 2017 and 2016, respectively.
During 2018, the entity executed a financing agreement for proceeds of $151,900. The agreement carries interest of 6% per annum and expires March 2019.
Death & Co Denver LLC
Death & Co Denver LLC is a limited liability company organized June 17, 2016 under the laws of the State of New York, and headquartered in Denver, Colorado. The entity operates a Denver‐based bar modeled after the award-winning and acclaimed New York-based cocktail bar, Death & Co.
As of December 31, 2017, the entity has incurred losses from inception of $76,275. In May 2018, the bar operated by the Company opened and began service to the public. The entity generated $313,040.84 in revenue in that month.
During 2018, the entity entered into a short‐term financing agreement for proceeds of $100,000. The agreement carries interest at 8.5% per annum and matures April 2019. Interest only payments begin June 2018, and principal payments begin September 2018.
The property is located at 1280 25th St in the heart of Denver’s River North District. Death & Co Denver LLC has a ten-year exclusive license on all F&B spaces throughout The Ramble Hotel at $22 per sq ft for 5,151 sq ft. The entity also services The Garden and Vaux Hall, the events space, but pays no monthly rent on either. Death & Co Denver also pays percentage rent of 5% of gross sales and 18% of events in Vaux Hall.
Proprietors, LLC is a limited liability company organized January 5, 2012 under the laws of the State of California, and headquartered in Los Angeles, California. The entity provides consulting services focused on building world‐class beverage programs as well as marketing and branding for the beverage industry, in addition to management services provided to bars in the states of California, New York, and Wyoming.
During the two years ended December 31, 2017 and 2016, the entity earned revenues of $539,954 for the year ending 2017 and $367,423 for the year ending 2016. The entity has sustained net income of $58,632 and net loss of $(66,060) during the years ended December 31, 2017 and 2016, respectively.
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. Death & Co Denver LLC has approximately $115,687 in cash on hand as of June 29, 2018; Little Hands Play Café, Inc has approximately 21,347 as of June 29, 2018. The cash on hand 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
Other than to build out a “Death & Co” location to be operated by Death & Co Los Angeles, LLC, the Company does not intend to make any material capital expenditures in the near future.
Alcohol sales, from restaurants, bars, and nightclubs, is a growing business. Sales in the drinking place sector in the US have steadily grown since the mid-1990’s reaching 25.74 billion in 2017. Spirits sales continue to grow quickly fueled by the seeming omnipresence of cocktail culture. Spirit sales were up 2.6% in 2016, in line with the five-year average and more than double wine sales 2016 growth.
Consumers continue to opt for craft, premium and experiential when deciding where to spend their dining and drinking dollars. The culinary revolution of the 70’s and 80’s brought a great awareness about providence of product and created an educated consumer, so too did the cocktail revolution of the early 2000’s. The Death & Co target market is made up of this new educated genre of drinkers and diners, who follow national and local food blogs, base travel decisions around where to eat and where to drink, and who follow their favorite bars and restaurants on social media.
Risks Related to the Company’s Business and Industry
The reviewing CPA has included a “going concern” note in Gin & Luck’s independent accountant’s review report. The Company has not yet begun principal operations which, among other factors, raises substantial doubt about the Company's ability to continue as a going concern for the twelve-month period from the report date. The ability of the Company to continue as a going concern is dependent upon management's plans to acquire the various targeted entities and generate positive operational cash flows. The accompanying financial statements do not include any adjustments that might be required should the Company be unable to continue as a going concern.
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.
Cyclical and seasonal fluctuations in the economy may have an effect on our business. Both cyclical and seasonal fluctuations may affect our business. Seasonal trends may cause fluctuations in our quarterly results, including fluctuations in revenues.
We are subject to governmental regulations. Federal, state and local laws and regulations govern the distribution of spirits, including permitting, licensing, trade practices, advertising and marketing, distributor relationships and various other matters. Our bars are subject to alcohol beverage control regulations that require us to apply to a bar authority for a license that must be renewed annually and may be revoked or suspended for cause at any time. These alcohol beverage control regulations relate to numerous aspects of daily operations of our bars, including minimum age of patrons and employees, hours of operation, advertising, trade practices, inventory control and handling, storage and dispensing of alcohol beverages. Noncompliance with such laws and regulations may cause the Alcohol and Tobacco Tax and Trade Bureau or any particular state or jurisdiction to revoke its license or permit, restricting our ability to conduct business, assess additional taxes, interest and penalties or result in the imposition of significant fines.
We face substantial competition and our inability to compete effectively could adversely affect our sales and results of operations. We compete in the highly competitive hospitality industry. Our business faces competition with respect to any products and services that we may seek to develop or commercialize in the future. Our competitors include major hospitality companies and bars locally and worldwide. Many of its 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 to develop and commercialize services. These competitors also compete with the Company in recruiting and retaining qualified personnel. Smaller or early stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. Accordingly, competitors may grow 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 products and services.
Business Concentration. Because our main business operations are concentrated a few geographic areas, we are susceptible to economic and other trends and developments, including adverse economic conditions, in these areas. Our financial performance is mainly dependent on our Death & Co bar located in New York. As a result, adverse economic conditions in New York could have a material adverse effect on our overall results of operations. In addition, local strikes, terrorist attacks, increases in energy prices, inclement weather or natural or man-made disasters could have a negative effect on our business.
The Company’s business model is capital intensive. The amount of capital the Company is attempting to raise in this Offering is not enough to sustain the Company’s current business plan. In order to achieve the Company’s near and long-term goals, the Company will need to procure funds in addition to the amount raised in the Offering. There is no guarantee the Company will be able to raise such funds on acceptable terms or at all. If the Company are not able to raise sufficient capital in the future, it will not be able to execute its business plan, its continued operations will be in jeopardy and it may be forced to cease operations and sell or otherwise transfer all or substantially all of its remaining assets, which could cause a Purchaser to lose all or a portion of his or her investment.
We 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 eating and drinking establishments change continually. Our success depends on our ability to predict, identify, and interpret the tastes and habits of consumers and to offer products that appeal to consumer preferences. If we do not offer products that appeal to consumers, our sales and market share will decrease. We must distinguish between short-term fads, mid-term trends, and long-term changes in consumer preferences. If we do not accurately predict which shifts in consumer preferences will be long-term, or if we fail to introduce new and improved products to satisfy those preferences, our sales could decline. In addition, because of our varied customer base, we must offer an array of products that satisfy the broad spectrum of consumer preferences. If we fail to expand our product offerings successfully across product categories, or if we do not rapidly develop products in faster growing and more profitable categories, demand for our products could decrease, which could materially and adversely affect our product sales, financial condition, and results of operations.
Quality management plays an essential role in determining and meeting customer requirements and improving the Company’s products and services. Our future success depends on our ability to maintain and continuously improve our quality management program. An inability to address a quality or safety issue in an effective and timely manner may also cause negative publicity, a loss of customer confidence in us or our current or future products, which may result in the loss of sales and difficulty in successfully launching new products. In addition, a successful claim brought against us in excess of available insurance or not covered by indemnification agreements, or any claim that results in significant adverse publicity against us, could have an adverse effect on our business and our reputation.
The Company has not yet formed a Board. Although the Company is not legally required to have a board to conduct operations, boards play a critical role in effective risk oversight. A board helps ensure that management’s actions are consistent with corporate strategy, reflective of the culture of the business, and in line with the organization’s risk tolerance. There is no guarantee that a Board will be put in place.
The Company’s success depends on the experience and skill of the founders and key team members. In particular, the Company is dependent on David Kaplan, Alex Day, and Ravi Derossi. The Company has not yet signed any employment contracts with its founders and team members, and there can be no assurance that they will continue to be employed by the Company for a particular period of time. The loss of our founders or any key members of the team could harm the Company’s business, financial condition, cash flow and results of operations.
The Company has conducted transactions with related persons. See page 21 of the Form C for additional details.
Risks Related to the Securities
The Series A Preferred Units will not be freely tradable until one year from the initial purchase date. Although the Series A Preferred Units may be tradable under federal securities law, state securities regulations may apply and each Purchaser should consult with his or her attorney. You should be aware of the long-term nature of this investment. There is not now and likely will not be a public market for the Series A Preferred Units. Because the Series A Preferred Units have not been registered under the 1933 Act or under the securities laws of any state or non-United States jurisdiction, the Series A Preferred Units have transfer restrictions and cannot be resold in the United States except pursuant to Rule 501 of Regulation CF. It is not currently contemplated that registration under the 1933 Act or other securities laws will be effected. Limitations on the transfer of the Series A Preferred Units may also adversely affect the price that you might be able to obtain for the Series A Preferred Units in a private sale. Purchasers should be aware of the long-term nature of their investment in the Company. Each Purchaser in this Offering will be required to represent that it is purchasing the Securities for its own account, for investment purposes and not with a view to resale or distribution thereof.
A majority of the Company is owned by a small number of owners. Prior to the Offering the Company’s current owners of 20% or more beneficially own up to 60% of the Company. Subject to any fiduciary duties owed to our other owners or investors under Delaware law, these owners may be able to exercise significant influence over matters requiring owner approval, including the election of managers or managers and approval of significant Company transactions, and will have significant control over the Company’s management and policies. Some of these persons may have interests that are different from yours. For example, these owners may support proposals and actions with which you may disagree. The concentration of ownership could delay or prevent a change in control of the Company or otherwise discourage a potential acquirer from attempting to obtain control of the Company, which in turn could reduce the price potential investors are willing to pay for the Company. In addition, these owners could use their voting influence to maintain the Company’s existing management, delay or prevent changes in control of the Company, or support or reject other management and board proposals that are subject to owner approval.
Your ownership of the shares of preferred Units may be subject to dilution. Non-Major Purchasers (as defined below) of preferred Units do not have preemptive rights. If the Company conducts subsequent offerings of preferred Units or Securities convertible into preferred Units, issues shares pursuant to a compensation or distribution reinvestment plan or otherwise issues additional shares, investors who purchase shares in this Offering who do not participate in those other Units issuances will experience dilution in their percentage ownership of the Company’s outstanding shares. Furthermore, Purchasers may experience a dilution in the value of their shares depending on the terms and pricing of any future share issuances (including the shares being sold in this Offering) and the value of the Company’s assets at the time of issuance.
You will be bound by an investor proxy agreement, which limits your voting rights. All Non-Major Purchasers of Series A Preferred Units will be bound by an investor proxy agreement. This agreement will limit your voting rights and at a later time may require you to convert your future preferred shares into common shares without your consent. Non-Major Purchasers will be bound by this agreement, unless Non-Major Purchasers holding a majority of the principal amount outstanding of the Series A Preferred Units held by Non-Major Purchasers vote to terminate the agreement.
The Securities will be equity interests in the Company and will not constitute indebtedness. The Securities will rank junior to all existing and future indebtedness and other non-equity claims on the Company with respect to assets available to satisfy claims on the Company, including in a liquidation of the Company. Additionally, unlike indebtedness, for which principal and interest would customarily be payable on specified due dates, there will be no specified payments of dividends with respect to the Securities and dividends are payable only if, when and as authorized and declared by the Company and depend on, among other matters, the Company’s historical and projected results of operations, liquidity, cash flows, capital levels, financial condition, debt service requirements and other cash needs, financing covenants, applicable state law, federal and state regulatory prohibitions and other restrictions and any other factors the Company’s board of managers deems relevant at the time. In addition, the terms of the Securities will not limit the amount of debt or other obligations the Company may incur in the future. Accordingly, the Company may incur substantial amounts of additional debt and other obligations that will rank senior to the Securities.
There can be no assurance that we will ever provide liquidity to Purchasers through either a sale of the Company or a registration of the Securities. There can be no assurance that any form of merger, combination, or sale of the Company will take place, or that any merger, combination, or sale would provide liquidity for Purchasers. Furthermore, we may be unable to register the Securities for resale by Purchasers for legal, commercial, regulatory, market-related or other reasons. In the event that we are unable to effect a registration, Purchasers could be unable to sell their Securities unless an exemption from registration is available.
The Company does not anticipate paying any cash dividends for the foreseeable future. The Company currently intends to retain future earnings, if any, for the foreseeable future, to repay indebtedness and to support its business. The Company does not intend in the foreseeable future to pay any dividends to holders of its shares of preferred units.
Any valuation at this stage is difficult to assess. 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.
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 Death & Co. Once Death & Co accepts your investment, and certain regulatory procedures are completed, your money will be transferred from the escrow account to Death & Co in exchange for your securities. At that point, you will be a proud owner in Death & Co.
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, Death & Co 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 Death & Co does not plan to list these securities on a national exchange or another secondary market. At some point Death & Co 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 Death & Co 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 Death & Co'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 Death & Co's Form C. The Form C includes important details about Death & Co'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.