- Key investors include Social Leverage (VC) and Tech Coast Angels
- Over 500,000 users across all Sports Gambling Tech products including LineStar for Daily Fantasy Sports, TrackWiz for Horse Racing, and BetFully for Sports Gambling (coming soon)
- Achieved $75K in MRR with recurring subscription revenues across all products
- Current banner product, LineStar App, has 6,500+ reviews for an average rating of 4.6 stars across iOS and Android
- With patented technology and agreements in place with operators, FSC believes it is well-positioned to take advantage of the legalization of sports-betting across the U.S.
- Total Amount Raised: US $917,478
- Total Investors: 681
- Total Round Size: US $3,500,000
- Seed 3 :
- Minimum Investment: US $1,000 per investor
- : Tiered Preferred Equity
- US $19,000,000 :
- Side by Side Offering
- Purchase Price: US $1.2405 Final
Sports fans love sports-betting and although it's not legal in most of the U.S. and placing bets is difficult for most players, an estimated $150B is wagered illegally each year. However, this has been changing since the U.S. Supreme Court legalized sports gambling in 2018 and now the legal industry is expected to grow from $1.5B to $81B by 2030.
New Jersey, New York, Michigan, and over 40% of all U.S. states are live or about to legalize sports gambling. We are primed to take advantage of this policy shift. The legalization of sports gambling only happens once and we believe we have a winning plan.
At Fantasy Sports Co. (FSC), we are huge sports fans and created LineStar, a comprehensive Daily Fantasy Sports product that covers more sports, has a wider array of data & tools and is priced more affordably than our competitors. We also created TrackWiz to give horse racing fans digital access to race stats, odds, and expert picks.
Our goal is to help you win at sports betting! We have a base of 500K sports fans, over 800K downloads, a 4.5-star rating on our apps from 7K+ reviews, and cover more sports than other players in the market. We generated ~$750K of revenue in 2020 from subscription & pay-to-play products.
Now, FSC is about to release our next key idea in the online sports betting world, a rewards program that lets you get up to 10% back on all your bets, win or lose! It's called BetFully and it's already growing support from our fans. BetFully is designed in a similar way as successful affiliate programs like Honey, eBates, ibotta, & RetailMeNot; but we focus on sports betting and online casinos. Just register with BetFully for free and use any participating operator to place your bets. BetFully automatically tracks your rewards and rebates. BetFully generates revenue from operators and then the rewards are shared with users, so we all win!
A Side by Side offering refers to a deal that is raising capital under two offering types. Investments made through the SeedInvest platform are offered via Regulation CF and subject to investment limitations further described in the Form C and/or subscription documents. Investments made outside of the SeedInvest platform are offered via Regulation D and requires one to be a verified accredited investor in order to be eligible to invest.
US $877,476 (under Reg CF only)
US $1.1165 no later than May 14, 2021 (10.0% discount)
US $1.2405 Final
Investors who invest less than $69,379 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 investors who reserve shares and later convert those shares will receive an exclusive LineStar 2021 Fitted Hat and exclusive LineStar Mug.
Invest $2,000 to $4,999:
Annual Subscription to TrackWiz (valued at $19.99/month)
Early Bird Bonus: If you complete your investment by Friday, April 23rd at 11:59pm ET, you’ll receive beta access to BetFully.
Invest $5,000 to $19,999:
In addition to an annual subscription to TrackWiz, you’ll receive an annual subscription to LineStar (valued at $19.99/month).
Early Bird Bonus: If you complete your investment by Friday, April 23rd at 11:59pm ET, you’ll receive beta access to BetFully.
Invest $20,000 to $49,999:
In addition to annual subscriptions to TrackWiz and LineStar, you’ll receive beta access to BetFully.
Early Bird Bonus: If you invest $20,000 or more and complete your investment by Friday, April 23 at 11:59pm ET, you’ll receive a 30-min Zoom call w/ CEO Erik Groset to strategize setting up FSC for success.
Invest $50,000 to $99,999:
You’ll receive all benefits of the $20,000 tier (annual subscriptions to TrackWiz and LineStar, and beta access to BetFully) plus the opportunity to nominate someone to be a fully legitimate paid part-time FSC Intern. We’ll properly train them in the arts for a career in the sports or sports gambling industry and thoroughly challenge them to advance their life goals.
Early Bird Bonus: If you invest $50,000 or more and complete your investment by Friday, April 23rd at 11:59pm ET, you’ll have the opportunity to meet w/ Dr. David Chao for a 30-min Zoom session on any sports Injury or betting questions you might have.
You’ll receive all benefits of the $50,000 tier plus become eligible for a limited FSC Advisory Investor Group, which will meet quarterly to discuss company progress, business strategy, and market trends. Additionally, you’ll have the opportunity to meet w/ Dr. David Chao for a 30-min Zoom session on any sports injury or betting questions you might have.
Please note: All Zoom sessions awarded need to be redeemed within one year of the campaign closing date. All interns nominated to work for FSC must be legally able to work in the United States.
It is advised that you consult a tax professional to fully understand any potential tax implications of receiving investor perks before making an investment.
Please note that due to share price calculations, some final investment amounts may be rounded down to the nearest whole share - these will still qualify for the designated perk tier. Additionally, investors must complete the online process and receive an initial email confirmation by the deadline stated above in order to be eligible for perks.
The graph below illustrates theor the of Fantasy Sports Co.'s prior rounds by year.
The world of sports betting and online casinos has been growing at a healthy pace in recent years, but with the recent federal legalization of sports-betting and states moving to legalize at the local level, the market is estimated to grow rapidly -- especially as the $150B that is currently bet illegally on sports flips into legal formats and continues to grow.
Estimates predict legal U.S. sports wagering will increase to $81B by 2030. Fantasy Sports Co. (FSC) is uniquely positioned to take full advantage of this market shift with the coming launch of BetFully, our consumer sports wagering rewards program. We believe the rush of new consumers in this market will demand the same type of rewards and recognition as the e-commerce world. That's why we think BetFully is positioned to be another market leader by creating a rewards system that follows you and gives you up to 10% back on all your sports betting and online casino play.
BetFully generates revenue from affiliate fees and sponsored promotional campaigns to our community of sports fans. FSC shares a portion of this revenue with BetFully users to reward their play activity or other sponsored actions. BetFully strives to partner with all major gaming platforms so consumers may earn rewards from any participating operator, thus creating a seamless and comprehensive rewards system.
FSC products are already designed for the masses, with affordable subscription fees that are 25% to 50% those of our competitors. We can package products like these with BetFully to offer information to help you win and earn rewards across various gaming operators. We believe we offer the most comprehensive solution in the market.
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 market space. Additionally, the product may be in a market where customers will not have brand loyalty.
Failure to obtain new customers or clients or renew customer or client subscriptions or contracts on favorable terms could adversely affect results of operations. The Company may face pricing pressure in obtaining and retaining their customers. Their customers may be able to seek price reductions from them when they renew a contract or subscription, when a contract or subscription is extended, or when the client’s business or customer's use has significant volume changes. Their clients may also reduce services if they decide to move services in-house. On some occasions, 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 contracts on favorable terms could adversely affect the Company's 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 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 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's business could be negatively impacted by cybersecurity threats, attacks, and other disruptions. Like others in its industry, the Company may face advanced and persistent attacks on its information infrastructure where it manages and stores various proprietary information and sensitive/confidential data relating to its operations. These attacks may include sophisticated malware (viruses, worms, and other malicious software programs) and phishing emails that attack its 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 the Company's network security and misappropriate or compromise its confidential information or that of its customers or other third-parties, create system disruptions, or cause shutdowns. Additionally, sophisticated software and applications that the Company produces 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 the Company's information infrastructure systems or any of its 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 the business.
Evolving government regulations may require increased costs or adversely affect the Company’s results of operations. In a regulatory climate that is uncertain, the Company’s operations may be subject to direct and indirect adoption, expansion, or reinterpretation of various laws and regulations. Compliance with these future laws and regulations may require the Company to change its practices at an undeterminable and possibly significant initial monetary and annual expense. These additional monetary expenditures may increase future overhead, which could have a material adverse effect on its results of operations. Additionally, the introduction of new services may require the Company to comply with additional, yet undetermined, laws and regulations. Compliance may require obtaining appropriate state medical board licenses or certificates, increasing security measures and expending additional resources to monitor developments in applicable rules and ensure compliance. The failure to adequately comply with these future laws and regulations may delay or possibly prevent some of the products or services from being offered to Clients and Members, which could have a material adverse effect on the business, financial condition and results of operations.
The Company conducts business in a heavily regulated industry. If the Company fails to comply with these laws and government regulations, it could incur penalties or be required to make significant changes to its operations or experience adverse publicity, which could have a material adverse effect on its business, financial condition, and results of operations. The industry is heavily regulated and closely scrutinized by federal, state, and local governments. Comprehensive statutes and regulations govern the manner in which the Company provides and bills for services and collects reimbursement from governmental programs and private payers, contractual relationships with Providers, vendors and Clients, marketing activities, and other aspects of its operations. Because of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available, it is possible that some of the Company’s business activities could be subject to challenge under one or more of such laws. Achieving and sustaining compliance with these laws may prove costly. Failure to comply with these laws and other laws can result in civil and criminal penalties such as fines, damages, overpayment recoupment, loss of enrollment status, and exclusion from certain programs. The risk of the Company being found in violation of these laws and regulations is increased by the fact that many of them have not been fully interpreted by the regulatory authorities or the courts, and their provisions are sometimes open to a variety of interpretations. The Company’s failure to accurately anticipate the application of these laws and regulations to the business or any other failure to comply with regulatory requirements could create liability and negatively affect the business. Any action against the Company for violation of these laws or regulations, even if they successfully defend against it, could cause them to incur significant legal expenses, divert management's attention from the operation of the business, and result in adverse publicity.
The Company projects aggressive growth. If these assumptions are wrong and the projections regarding market penetration are too aggressive, then the financial forecast may overstate the Company's overall viability. In addition, the forward-looking statements are only predictions. The Company has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that it believes may affect its business, financial condition and results of operations. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.
The Company’s expenses will significantly increase as they seek to execute their current business model. Although the Company estimates that it has enough runway for 3-4 months, they will be ramping up cash burn to promote revenue growth, further develop R&D, and fund other Company operations after the raise. Doing so could require significant effort and expense or may not be feasible.
The Company’s cash position is relatively low. The Company currently has approximately $154,000 in cash balances as of February 28, 2021. This equates to 3-4 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 in the event that it is unable to meet its cash demands, and in this event, the Company may not be able to continue operations if they are not able to raise additional funds.
The Company's existing investors have not waived their pre-emptive rights and currently plan on exercising those rights. The pre-emptive right entitles those investors to participate in this securities issuance on a pro-rata basis. If those investors choose to exercise their pre-emptive right, it could dilute shareholders in this round. This dilution could reduce the economic value of the investment, the relative ownership resulting from the investment, or both.
The Company’s Charter requires consent from only 30% of outstanding Preferred Stock for certain material company actions. As described in the Charter, the Company requires the approval of the holders of at least 30% percent of then-outstanding shares of Preferred Stock, voting together as a single class, to pay or declare any dividend, purchase or redeem shares of capital stock, increase authorization for additional equity incentive options, or incur a certain amount of indebtedness, as described in the Charter. This provision allows for a minority of shareholders of Preferred Stock to approve certain material corporate actions; and may result in action that does not impact the majority of Preferred Stock investors in a fair way. Please see the Charter in the Series Seed 3 Preferred Stock Investment Agreement in the Data Room for more detail on the preferred stock.
The Company has not filed a Form D for one of its prior offering of securities in 2015. 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 outbreak of the novel coronavirus, COVID-19, has adversely impacted global commercial activity and contributed to significant declines and volatility in financial markets. The coronavirus pandemic and government responses are creating disruption in global supply chains and adversely impacting many industries. The outbreak could have a continued material adverse impact on economic and market conditions and trigger a period of global economic slowdown. The rapid development and fluidity of this situation precludes any prediction as to the ultimate material adverse impact of the novel coronavirus. Nevertheless, the novel coronavirus presents material uncertainty and risk with respect to the Funds, their performance, and their financial results.
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 theseshares 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 \u2014 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.
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 $5 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 Fantasy Sports Co.. Once Fantasy Sports Co. accepts your investment, and certain regulatory procedures are completed, your money will be transferred from the escrow account to Fantasy Sports Co. in exchange for your securities. At that point, you will be a proud owner in Fantasy Sports 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
- Your accredited investor status
- Social Security Number or passport
- ABA bank routing number and checking account number (typically found on a personal check or bank statement) or debit card information, unless paying via a Wire transfer.
Non-accredited investors are limited in the amount that he or she may invest in a Reg CF offering during any rolling 12-month period:
- If either the annual income or the net worth of the investor is less than $107,000, the investor is limited to the greater of $2,200 or 5% of the greater of his or her annual income or net worth.
- If the annual income and net worth of the investor are both greater than $107,000, the investor is limited to 10% of the greater of his or her annual income or net worth, to a maximum of $107,000.
Separately, Fantasy Sports Co. has set a minimum investment amount of US $1,000.
Accredited investors do not have any 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 Fantasy Sports Co. does not plan to list these securities on a national exchange or another secondary market. At some point Fantasy Sports 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 Fantasy Sports 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 Fantasy Sports 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 Fantasy Sports Co.'s Form C. The Form C includes important details about Fantasy Sports 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 prior to the offering end date or an earlier date set by the company. You will be sent a notification at least five business days prior to a closing that is set to occur earlier than the original stated end date giving you an opportunity to cancel your investment if you have 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 account's portfolio page by clicking your profile icon in the top right corner.
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 account's portfolio page by clicking your profile icon in the top right corner.