accessibilityaccreditedactiveactivityaimalarmalign-bottomalign-center-horizontalalign-center-verticalalign-leftalign-rightalign-topanchorangelannoyedapplearchivearrow-downarrow-leftarrow-rightarrow-uparticleat-signawardbalanceballoonbandaidbarcodebellbicyclebinocularsblindboatbook-closedbookbookmarkbookmarkedbooksbottlebriefcasebrushbugbullhornbuscabinetcakecalendarcameracarcashcertificatechalkchart-barschart-linechart-piechatcheckmarkchevron-downchevron-leftchevron-rightchevron-upcircle-arrow-downcircle-arrow-leftcircle-arrow-rightcircle-arrow-upcircle-backwardcircle-checkmarkcircle-chevron-downcircle-chevron-leftcircle-chevron-rightcircle-chevron-upcircle-crosscircle-ejectcircle-exclamationcircle-facebookcircle-firstcircle-forwardcircle-googlepluscircle-gustcircle-lastcircle-linkedincircle-minuscircle-nextcircle-pausecircle-play-thincircle-playcircle-pluscircle-previouscircle-questioncircle-stopcircle-twittercircleclipboard-checkclipboardclockcloud-databasecloud-downloadcloud-fogcloud-gearcloud-lightningcloud-lockcloud-raincloud-snowcloud-synccloud-uploadcloudcocktail-glasscodecombinecomment-fillcommentcommentscompassconfusedconnectconstruction-coneconstructioncontactscoolcopycredit-cardcropcrosscrowncubedatabasedeletedesigndesktopdiamonddicedinnerdisconnectdocumentdownloaddrawerdreamdropletdumbbellearthediteggellipsisenter-downenter-leftenter-rightenter-upenterenvelopeevilexcludeexit-downexit-leftexit-rightexit-upexitexpandeye-droppereyefacebookfactoryfeatherfile-audiofile-codefile-imagefile-videofile-zipfilefilm-playfindfirefirst-aidflagflip-horizontalflip-verticalfloppy-diskfolderfootprintframefunnelgamepadgasgeargiftglassglassesgoogleplusgraduationgrin-evilgringroupgungusthamburgerhammerhappy-grinhappyheadsetheart-fillhearthistoryhomeiconsinboxintersectipadiphonekeykeyboardkeyholeknifelablamplaptopleafleave-downleave-leftleave-rightleave-uplibrarylifebuoylighterlightning-boltlinklinkedinlistlocationlocklotusmadmagicmagnetmalletmanmapmedalmeet-downmeet-leftmeet-rightmeet-upmic-mutemicminusmoonmousemovemusic-notemusicmustachemutenavigationneutralnewsoptionsoutletpaint-rollerpaintbrushpairpaper-planepaperclippaperspastepatchpawpenpencilphonephotopicturepinpine-treeplaneplayplaylistplug-cordpluspodiumpowerpresentationprinterprofilepulsepuzzlequestionquote-closequote-openradiorank1rank2rank3receptionrecycleredorefreshregisterreply-allreplyroad-signrocketrulersadscissorsscreensearchshareshieldshipshirtshockedshrinkshufflesignalsitemapskullsmartphonesmilespeed-fastspeed-mediumspeed-slowspell-checksquaresubtractsunsyncsyringetabtablettagtagstargetteacupterminalthumbs-downthumbs-uptickettilestimertoilet-papertonguetoolstrailertraintransmissiontrashtreetrophytrucktvtwitterumbrellaundounlinkunlockuploaduserusersvolume-highvolume-lowvolume-mediumvolumewarningwheelchairwifiwinkwomanwonderingwrenchzoom-inzoom-out

KPOP Foods

A vibrant food brand promoting Korean flavors through its food products.

Share:

KPOP Foods is offering securities under both Regulation D and Regulation CF through SI Securities, LLC ("SI Securities"). SI Securities is an affiliate of SeedInvest Technology, LLC, a registered broker-dealer, and member FINRA/SIPC. SI Securities will receive cash compensation equal to 7.50% of the value of the securities sold and equity compensation equal to 5.00% of the number of securities sold. Investments made under both Regulation D and Regulation CF involve a high degree of risk and those investors who cannot afford to lose their entire investment should not invest. Furthermore, the contents of the Highlights, Term Sheet sections have been prepared by SI Securities and shall be deemed broker-dealer communications subject to FINRA Rule 2210 (the “Excluded Sections”). With the exception of the Excluded Sections noted above, this profile contains offering materials prepared solely by KPOP Foods without the assistance of SI Securities, and not subject to FINRA Rule 2210 (the “Issuer Profile”). The Issuer Profile may contain forward-looking statements and information relating to, among other things, the company, its business plan and strategy, and its industry. Investors should review the risks and disclosures in the offering's draft. The contents of this profile are meant to be a summary of the information found in the company’s Form C. Before making an investment decision, investors should review the company’s Form C for a complete description of its business and offering information, a copy of which may be found both here and below.


Company Highlights

  • Over $80k in revenue since launching last year in September
  • Raised $37,627 from 1,219 backers on Kickstarter and then raised $150,000 from investors, which includes a co-founder of Sir Kensington’s
  • Product featured in FabFitFun’s limited-edition, co-branded box with Pinterest called the Pinterest 100.
  • All products are Amazon’s Choice with average reviews of 4.5 stars from 110+ reviews and 4.5 stars from 10+ reviews for KPOP Sauce and KPOP Sea Snacks, respectively.
  • A member of UCLA Anderson Venture Accelerator’s first cohort of 11 teams, of which 6 received funding (over $1 million cumulatively) and 1 successfully exited.

Fundraise Highlights

  • Total Amount Raised: US $217,100
  • Total Round Size: US $500,000
  • Raise Description:  Seed
  • Minimum Investment:  US $1,000 per investor
  • Security Type:  Crowd Note
  • Valuation Cap:  US $3,000,000
  • Offering Type:   Side by Side Offering

KPOP Foods is a spirited food brand inviting people to discover and enjoy Korean flavors through its food products. Our mission is to bring people together and uplift spirits by spreading Korean food and flavors in America.


The Problem

Korean food continues to surge in popularity across America, thanks to celebrity chefs embracing and endorsing Korean flavors and the public gaining access to Korean barbecue and rice bowls. In 2016, Korean restaurants represented a $5.0 billion market in the United States. Compared to the more established Chinese and Mexican food markets, Korean food is 7x smaller, demonstrating a significant opportunity for growth.

The question remains, why hasn’t Korean food in the United States achieved its full potential? We see the problem as two-fold:

  1. Inaccessibility – Korean food products tend to only be found in Korean grocery stores located in Korean neighborhoods, sometimes known as Koreatowns. Traveling to these stores is cumbersome, and for people new to Korean food, walking through a grocery store with labels written in a foreign language can be a daunting experience.
  2. Lack of Education and Marketing – While chefs and restauranteurs have done a noteworthy job of showcasing Korean flavors through fusion or Asian-inspired cuisines, they stop short of educating the mainstream consumer. Current Korean food brands are content with marketing to Korean and Korean American consumers, oftentimes not even translating their packaging to English. If the packaging is translated to English, there is little consideration in educating the consumer on how to use and incorporate their products.

The Solution

Here at KPOP Foods, we’re focused on fixing a tangible problem and seizing the opportunity by building a Korean food brand that people can resonate with and embrace. By capturing the special flavors of Korean food in user-friendly products, we can access mainstream distribution channels and capitalize on social media and content creation, allowing us to position ourselves at the forefront of the growth of Korean food with the goal of becoming the Korean food brand for America.

Why Korean Food

Korean cuisine is filled with spicy, savory, and mouth-watering flavors. The rise of Korean BBQ has created a gateway for people to experience these flavors and enjoy the holistic experience of Korean dining – the sizzling meat on the tabletop grill, the color and abundance of banchan, or side dishes, and bustling of activity. Chefs and restauranteurs fell in love with the culture and chefs, such as Roy Choi and David Chang, have introduced Korean-inspired concepts that have brought Korean flavors to the forefront of cuisine in America. The popular social media platform, Pinterest, identified Korean condiments as a top food trend for 2018 and award-winning journalist and food critic, Jonathon Gold, identified Korean flavors as a top 10 food trend in Los Angeles for 2018. However, despite this notoriety and traction, Korean food brands continue to ignore the opportunity to interact with mainstream America, presenting the opportunity for KPOP Foods.

This opportunity also come with a deeper connection between Korean cuisine and KPOP Foods’ mission. A fundamental aspect of Korean cuisine is the sharing of food amongst family members, friends, and new guests at the table. The nature of eating from shared plates and bowls promotes a special sense of inclusiveness and a connection with those you share your meal with. This spirit ties directly to our mission of bringing people together and uplifting spirits through food, a key part of the inspiration that led to our focus in Korean food and the start of KPOP Foods.

Product & Service

The Business

KPOP Foods debuted last year in April through a successful Kickstarter campaign that reached the stated goal of $10,000 within the first 8 hours. The Kickstarter campaign closed having raised $37,627 from 1,219 backers for our first product, KPOP Sauce. In October, we listed KPOP Sauce onto Amazon. This early traction provided opportunities for us to partner with Korean restaurants, subscription boxes, food influencers, and celebrity chefs.

In April of this year, we introduced KPOP Sea Snacks, a premium roasted and all-natural seaweed snack. While still fairly new, we’ve already seen significant traction with KPOP Sea Snacks through positive customer reviews and significant partnership, the most notable with FabFitFun and Pinterest.

Since September, we’ve generated over $80,000 in revenue to-date, growing our monthly revenue through April, on average, 59%, while maintaining a gross profit margin of 29%. Furthermore, based on our website sales, an average customer has spent $40.92, with an average order value of $13.65.

Our focus has been to grow our online revenue stream, providing time to build our brand and community. We’ve since amassed a list of over 5,000 emails, built an Instagram following of nearly 10,000 followers, and created video content that drew in over 200,000 views.

We’re now gaining interest in traditional distribution channels and have started working with specialty stores and have entered over 90 different locations. With opportunities to expand distribution and plans to develop new products, KPOP Foods is ready enter the next stage of growth.

Our Philosophy and Approach

At KPOP Foods, we concentrate on creating an inclusive and welcoming atmosphere for people to experience Korean food and flavors. Like many ethnic cuisines, Korean food can be overwhelming with long, hard to pronounce names, and the use of advanced cooking techniques. We like to make things simple, focusing on developing easy-to-use and approachable products for our customers and newcomers to Korean food. As we grow and expand, we will continue to introduce innovative and flavorful Korean food products for everyone to enjoy.

We’re focused on developing delicious, easy-to-use, and approachable products for our customers, as well as newcomers to Korean food. We believe in empowering people with the opportunity to enjoy Korean food and flavors on their own terms. As we grow and expand, we will continue to introduce innovative and flavorful Korean food products for everyone to enjoy.

The Products - KPOP Sauce & KPOP Sea Snacks

Our first product was KPOP Sauce, a Korean chili sauce based on a family recipe using Korean chili paste, otherwise known as gochujang. We debuted KPOP Sauce on Kickstarter last year in April and successfully met our stated goal of $10,000 in under the first 8 hours of our campaign. We began selling KPOP Sauce on our website in September and then in October, entered Amazon and became the #1 new selling chili sauce for three consecutive months. KPOP Sauce continues to be a highly rated product with an average product rating of 4.5 stars from over 110 Amazon reviews, and has been featured by award-winning pit-masters, Ballistic BBQ and Slap Yo Daddy BBQ, included in several subscription boxes, and covered by several media outlets.

Our newest product is KPOP Sea Snacks, a premium roasted and all-natural seaweed snack. Using high quality seaweed from Korea, the seaweed is then roasted and flavored here in the United States to guarantee freshness and crispness, two qualities that we believe separate KPOP Sea Snacks from the competition. We launched KPOP Sea Snacks on April 16, 2018 and while still very new, its already an Amazon’s Choice product with an average product score of 5.0 stars from 12 reviews. KPOP Sea Snacks has also gained traction through partnerships, the most notable being FabFitFun, a women’s quarterly subscription box, and the launch of their specially co-branded box with Pinterest called the Pinterest 100.

Our Partnerships

Our brand and products have opened the doors to opportunities to partner with other amazing companies and brands. With KPOP Sauce, we partnered with Sorabol Korean BBQ and Asian Noodles for a KPOP Sauce Holiday 2-Pack, and in 2018, we partnered with several subscription boxes, including Bespoke Post, a modern men’s box, and BBQ Box, a monthly box filled with the best BBQ products.

While launching KPOP Sea Snacks earlier this year, we’ve already entered into two significant partnerships with subscription boxes, providing total distribution of 32,500 units of KPOP Sea Snacks and over 15 million impressions across email, social media, and other online channels. Our partnership with FabFitFun was recently announced as KPOP Sea Snacks is included in their specially co-branded box with Pinterest. Called the Pinterest 100, the limited-edition box includes nine products from Pinterest’s top 100 trends for 2018 with KPOP Sea Snacks selected as the only food product included.

What our Customers are Saying

KPOP Sauce Reviews

"Amazing Flavor - This sauce has incredible flavor, especially if you're a big fan of Korean food. I've been searching for something to quickly add flavor to my foods and this is definitely it!" - Anonymous, Amazon Verified Purchase

"First off, I am not sure I have ever eaten Korean food as such, so I didn't get this with any real expectations as to what it should be like, or how I could use this. We do eat some other Asian-inspired foods…We ended up adding this to a lot of our regular mostly American food. It is great on a burger, great pretty much anywhere you would use ketchup...definitely more flavorful and healthier too." - Debra B, Amazon Customer & Vine Voice Contributor

KPOP Sea Snacks Reviews

"A perfect, healthy snack to have while you're away from home. Not too salty or greasy and I love rolling it up with some rice to give it some balance. Will buy again and again." - Anonymous, Amazon Verified Purchase

"These addicting, light and salty snacks are perfect for a mid-morning/late-afternoon treat. I prefer them over other brands I have bought in the past. Better flavor and texture. They seem extremely fresh and made with high-quality ingredients." - Chelsea S, Verified Website Buyer

The above individuals were not compensated in exchange for their testimonials. In addition, their testimonials should not be construed as and/or considered investment advice.

Media Mentions

Team Story

Growing up in Korean American families, we were fortunate to be surrounded by Korean food all the time. However, along with the food, an important principle that was instilled in us was the connection between Korean food and family, friends, and fun. Meeting at business school at UCLA Anderson, we would take large groups of friends to Koreatown in Los Angeles to enjoy Korean food. Along with enjoying the food and flavors, our friends embraced the Korean culture and the energetic atmosphere. This sparked the idea for KPOP Foods.

With the increasing popularity of Korean cuisine, there continues to be a disconnect between Korean food brands and mainstream customers. None of the Korean food brands represent the spirit and excitement we experience with Korean food, and this pushed us to create KPOP Foods. We love Korean food and believe that through food, people can come together and have a great time. The KPOP Foods’ brand reflects our passion for bringing people together and having a great time by spreading Korean food and flavors in America, and eventually, the world.

UCLA Anderson and the Anderson Venture Accelerator

UCLA Anderson community has played, and continues to play, a major role in KPOP Foods. We took concept of KPOP Foods through UCLA Anderson’s entrepreneurial classes and startup program called the Business Creation Option, a field study option required for graduation. The UCLA Anderson community of peers, professors, and administration were instrumental in advising us during our Kickstarter campaign and connecting us to potential investors, advisors, and food industry professionals.

Upon graduating from UCLA Anderson, we were accepted into the Anderson Venture Accelerator’s first cohort of 11 teams. Along with providing incredible working space, which has allowed us to grow our team with valuable interns and contractors, we’ve benefitted from the access to the Anderson alumni network and skilled mentors, who have been influential in our trajectory and growth.  

Founders and Officers

Theodore Lee

Co-founder & CEO

Theo was fortunate as a child to live in Buenos Aires and Singapore, where he experienced a variety of cultures and cuisines. While traveling to other countries was great, Theo’s best memories were family reunions in the summer at his grandparent’s house in Atlanta. Theo’s grandma, along with other members of the family, would spend hours cooking large dinner the family that included freshly made ban chans (Korean side dishes), kimchi and tofu stews, and savory grilled meats. When it came time for dinner, everyone would sit, eat, and laugh, and it was these experiences with food, family, and friends, that left an everlasting impression on Theo.

While Theo’s love for food grew, after college, he pursued a career in banking, working at US Bank for one year, and then OneWest Bank for three years. During those four years, Theo gained valuable skills and experiences in finance, strategy, and business. But with a passion for entrepreneurship and startups, Theo pursued an MBA to round out his skill sets. As a Manager of Finance for an early stage fintech startup, he was a key contributor in closing the company’s $2 million seed round. However, his passion for food, especially Korean food, continued to grow and after meeting co-founder, Mike Kim, he knew it was time to take a shot at starting KPOP Foods.

Theo received a B.A. in Economics from UCLA and his M.B.A. from UCLA Anderson.

Theodore Lee

Co-founder & CEO

Theo was fortunate as a child to live in Buenos Aires and Singapore, where he experienced a variety of cultures and cuisines. While traveling to other countries was great, Theo’s best memories were family reunions in the summer at his grandparent’s house in Atlanta. Theo’s grandma, along with other members of the family, would spend hours cooking large dinner the family that included freshly made ban chans (Korean side dishes), kimchi and tofu stews, and savory grilled meats. When it came time for dinner, everyone would sit, eat, and laugh, and it was these experiences with food, family, and friends, that left an everlasting impression on Theo.

While Theo’s love for food grew, after college, he pursued a career in banking, working at US Bank for one year, and then OneWest Bank for three years. During those four years, Theo gained valuable skills and experiences in finance, strategy, and business. But with a passion for entrepreneurship and startups, Theo pursued an MBA to round out his skill sets. As a Manager of Finance for an early stage fintech startup, he was a key contributor in closing the company’s $2 million seed round. However, his passion for food, especially Korean food, continued to grow and after meeting co-founder, Mike Kim, he knew it was time to take a shot at starting KPOP Foods.

Theo received a B.A. in Economics from UCLA and his M.B.A. from UCLA Anderson.

Mike Kim

Co-founder & COO

While stationed around the US and abroad, US Army combat veteran Mike Kim introduced many of his soldiers and colleagues to Korean cuisine. The blend of brilliant flavors and the feeling of shared excitement created by these meals caused those familiar and those new to Korean food wanting more. This intersection of food, culture, and people would inspire Mike down the road.

Mike served in the US Army for five years in various positions from an Infantry Platoon Leader, Project Manager, to Assistant Operations Officer. He’s worked in multiple cities across the United States, Afghanistan, and South Korea, leading teams as large as 60 people. This experience allowed Mike to hone his skills in leadership, strategy, and operations. Upon transitioning from the military and entering business school, Mike began working as a Strategy and Business Development Associate at Edison Water Resources, an Edison International company where he tackled a wide-array of issues around scalability and growth. In early 2017, Mike and his co-founder, Theo Lee, decided to pursue KPOP Foods full-time during their second and final year at business school.

Mike received a B.S. in Engineering Management from the United States Military Academy at West Point and his M.B.A. from UCLA Anderson.  

Mike Kim

Co-founder & COO

While stationed around the US and abroad, US Army combat veteran Mike Kim introduced many of his soldiers and colleagues to Korean cuisine. The blend of brilliant flavors and the feeling of shared excitement created by these meals caused those familiar and those new to Korean food wanting more. This intersection of food, culture, and people would inspire Mike down the road.

Mike served in the US Army for five years in various positions from an Infantry Platoon Leader, Project Manager, to Assistant Operations Officer. He’s worked in multiple cities across the United States, Afghanistan, and South Korea, leading teams as large as 60 people. This experience allowed Mike to hone his skills in leadership, strategy, and operations. Upon transitioning from the military and entering business school, Mike began working as a Strategy and Business Development Associate at Edison Water Resources, an Edison International company where he tackled a wide-array of issues around scalability and growth. In early 2017, Mike and his co-founder, Theo Lee, decided to pursue KPOP Foods full-time during their second and final year at business school.

Mike received a B.S. in Engineering Management from the United States Military Academy at West Point and his M.B.A. from UCLA Anderson.  

Notable Advisors & Investors

Brandon Child

Investor, Co-founder of Sir Kensington's

Lydia Forstmann

Investor, Advisor, CEO of Jack Rogers USA

Ki Hong Park

Advisor, CEO of Gim Factory, Inc.

Q&A with the Founder

  • How many full time and part time employees do you currently have? How many full time and part time employees do you expect to have post-raise?
    We currently have two full-time employees (the two co-founders), three undergraduate interns (UCLA), and 3 part-time/contractors. Post-raise, we hope to bring on two full-time employees, a VP of Marketing and a Business Associate. Our plan is to hire a VP of Marketing by this July and a Business Associate by early 2019.
  • Please detail your barriers to entry. 
    The barriers to entry include the following: establishing a brand/building a community, developing a product that is FDA compliant, shelf stable, and certified (KPOP Sea Snacks is non-GMO certified and USDA Organic), finding a reliable manufacturer, and raising capital. The greatest barrier to entry is establishing a brand and building a strong community that believes in the company’s story and mission. We were fortunate to amass a strong following during our campaign that allowed us to garner 1,219 backers. Establishing this initial following takes time and then building on it also requires time, money, and a great product. Our trademark on KPOP Foods also protects our brand.

    The product development process is also difficult in the sense of creating a unique product that is FDA compliant and shelf stable. We took the time to partner with strong suppliers and worked with food scientists to take KPOP Sauce from a secret family recipe to a commercially viable recipe. This process also required working with a reliable and safe manufacturer, which takes time. Additionally, the process of receiving various certifications can also be a hurdle and take a significant amount of time (as long as up to 6 months).

    Lastly, capital is another barrier to entry as money is needed throughout each stage, from building a brand to developing a great product.  

  • Please detail your strategy to scale post-raise, including your product and business roadmap. 
    Our focus post-raise will be to expand our offline distribution channels via the contacts we’ve made and to continue looking for distributors and partners to work with. Additionally, bringing on a VP of Marketing to focus on our digital marketing channels and branding will allow for us to continue expanding our B2B opportunities with subscription boxes and other businesses.

    From a product standpoint, we’ll be focused on creating the two new variants of KPOP Sauce and two new flavors of KPOP Sea Snacks. 

  • The Q&A with the Founder is based on due diligence activities conducted by SI Securities, LLC. The verbal and/or written responses transcribed above may have been modified to address grammatical, typographical, or factual errors, or by special request of the company to protect confidential information.

    Term Sheet

    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.

    Fundraising Description

  • Round type:
    Seed

  • Round size:
    US $500,000

  • Raised to date:
    US $217,100
    US $142,100 (under Reg CF only)

  • Minimum investment:
    US $1,000

  • Target Minimum:
    US $200,000

  • Maximum Raise Amount:
    US $500,000
  • Key Terms

  • Security Type:
    Crowd Note

  • Conversion discount:
    20.0%

  • Valuation Cap:
    US $3,000,000

  • Interest rate:
    6.0%

  • Note term:
    24 months
  • Additional Terms

  • Closing conditions:
    While K POP Foods has set an overall target minimum of US $200,000 for the round, K POP Foods must raise at least US $25,000 of that amount through the Regulation CF portion of their raise before being able to conduct a close on any investments below $20,000. For further information please refer to K POP Foods's Form C.

  • Transfer restrictions:
    Securities issued through Regulation CF have a one year restriction on transfer from the date of purchase (except to certain qualified parties as specified under Section 4(a)(6) of the Securities Act of 1933), after which they become freely transferable. While securities issued through Regulation D are similarly considered "restricted securities" and investors must hold their securities indefinitely unless they are registered with the SEC and qualified by state authorities, or an exemption from such registration and qualification requirements is available.

  • Use of Proceeds

    Investor Perks

    $1,000: 25% discount and $50 annual online store credit for 2 years.

    $3,000: 25% discount and $80 annual online store credit for 3 years.

    $5,000: 25% discount and $125 annual online store credit for 5 years. Samples to all new products before release.

    $10,000: 25% discount and $200 annual online store credit for 10 years. Samples to all new products before release. *(+) Authentic Korean dinner with co-founders - for Los Angeles visitors and residents only.*

    It is advised that you consult a tax professional to fully understand any potential tax implications of receiving investor perks before making an investment.

    Prior Rounds

    The graph below illustrates the valuation cap or the pre-money valuation of KPOP Foods's prior rounds by year.


    This chart does not represent guarantees of future valuation growth and/or declines.

    Pre-Seed

  • Round Size
    US $100,000
  • Closed Date
    Jul 31, 2017
  • Security Type
    Convertible Note
  • Valuation Cap
    US $3,000,000
  • Pre-Seed

  • Round Size
    US $25,000
  • Closed Date
    Dec 1, 2017
  • Security Type
    Convertible Note
  • Valuation Cap
    US $3,000,000
  • Pre-Seed

  • Round Size
    US $25,000
  • Closed Date
    Jan 12, 2018
  • Security Type
    Convertible Note
  • Valuation Cap
    US $3,000,000
  • Financial Discussion

    Please see the financial information listed on the cover page of this Form C and attached hereto in addition to the following information. Financial statements are attached hereto as Exhibit B.

    Operations

    KPOP Foods, Inc. (“the Company”) is a Delaware corporation headquartered in Los Angeles, California, that provides Korean food packaged goods to consumers. The Company offers its flagship product K POP sauce, and recently released K POP sea snacks. Products are distributed and sold nationally via online distributors and the Company’s website.

    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 $9,074 in cash on hand as of April 2018 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.

    Valuation

    Before making an investment decision, you should carefully consider this valuation and the factors used to reach such valuation. Such valuation may not be accurate and you are encouraged to determine your own independent value of the Company prior to investing.

    As discussed in "Dilution" below, the valuation will determine the amount by which the investor’s stake is diluted immediately upon investment. An early-stage company typically sells its shares (or grants options over its shares) to its founders and early employees at a very low cash cost, because they are, in effect, putting their "sweat equity" into the Company. When the Company seeks cash investments from outside investors, like you, the new investors typically pay a much larger sum for their shares than the founders or earlier investors, which means that the cash value of your stake is immediately diluted because each share of the same type is worth the same amount, and you paid more for your shares (or the notes convertible into shares) than earlier investors did for theirs.

    There are several ways to value a company. None of them is perfect and all of them involve a certain amount of guesswork. The same method can produce a different valuation if used by a different person.

    Liquidation Value - The amount for which the assets of the Company can be sold, minus the liabilities owed, e.g., the assets of a bakery include the cake mixers, ingredients, baking tins, etc. The liabilities of a bakery include the cost of rent or mortgage on the bakery. However, this value does not reflect the potential value of a business, e.g. the value of the secret recipe. The value for most startups lies in their potential, as many early stage companies do not have many assets (they probably need to raise funds through a securities offering in order to purchase some equipment).

    Book Value - This is based on analysis of the Company’s financial statements, usually looking at the Company’s balance sheet as prepared by its accountants. However, the balance sheet only looks at costs (i.e. what was paid for the asset), and does not consider whether the asset has increased in value over time. In addition, some intangible assets, such as patents, trademarks or trade names, are very valuable but are not usually represented at their market value on the balance sheet.

    Earnings Approach - This is based on what the investor will pay (the present value) for what the investor expects to obtain in the future (the future return), taking into account inflation, the lost opportunity to participate in other investments, the risk of not receiving the return. However, predictions of the future are uncertain and valuation of future returns is a best guess.

    Different methods of valuation produce a different answer as to what your investment is worth. Typically liquidation value and book value will produce a lower valuation than the earnings approach. However, the earnings approach is also most likely to be risky as it is based on many assumptions about the future, while the liquidation value and book value are much more conservative.

    Future investors (including people seeking to acquire the Company) may value the Company differently. They may use a different valuation method, or different assumptions about the Company’s business and its market. Different valuations may mean that the value assigned to your investment changes. It frequently happens that when a large institutional investor such as a venture capitalist makes an investment in a company, it values the Company at a lower price than the initial investors did. If this happens, the value of the investment will go down.

    Market Landscape

    Market Sizing

    From 2013 to 2017, the Korean restaurant market has grown from $4.3 billion to $4.7 billion, and is projected to grow over the next 5 years to $5.3 billion in 2022 (IBIS World Report). On a higher level, the growth in retail sales of ethnic foods in the United States, which has grown from $11.0 billion in 2013, to a projected $12.5 billion in 2018 (Statista). In 2016, Asian food products (excluding Chinese) represented 30% of specialty food consumers’ purchases at retail stores, falling behind Italian (50%), Mexican (44%), Regional American (32%), and Chinese (32%).

    Another benchmark for the market is Huy Fong Foods, the producer of Sriracha and several other Thai-based chili sauces. In 2013, Huy Fong Foods reported total revenues of $85 million and claimed to have sold over 20 million bottles of Sriracha in 2012. For seaweed snacks, one of the larger players is Kirkland, the Costco brand. Based on industry experts, Kirkland seaweed generates approximately $25.0 million in annual revenue for Costco. Additionally, based on data provided by the Korea Agro-Fisheries and Food Trade Corporation, approximately $94.7 million dollars of seaweed was imported into the United States from Korea.

    Competition

    Our closest competitors are Annie Chun’s and Bibigo, both established Korean food brands under Korean food conglomerate, CJ Foods. Annie Chun’s has developed a decent following and a wide catalog of products from sauces to frozen dishes. However, a key point of differentiation is Annie Chun’s branding as a “gourmet Asian food brand,” marketing towards families, moms and kids alike. Similarly, Bibigo has developed a range of products and has developed a community through its restaurant chain. While Bibigo partnered with K-pop star PSY, there has been limited progress with their products as their branding around health and freshness has not transferred over to their consumer-packaged goods.

    Other competitors include serial restauranteurs David Chang and Roy Choi, and their respective brands, Momofuku and Kogi. David Chang launched a gochujang sauce called Ssam Sauce, well before the start of KPOP Foods, and recently announced a partnership with Heinz. While David Chang has the brand and following, his focus towards restaurants and entertainment limit his attention towards Ssam Sauce. Roy Choi, the chef known for reinventing the food truck scene with Kogi in LA, recently launched a line of sauces under the Kogi brand. Similarly, however, Roy’s attention is directed towards restaurants with the development of his newest concept in Las Vegas. Given the number of projects requiring attention, David Chang and Roy Choi’s participation in Korean food is a positive, creating additional notoriety for Korean food and flavors.

    Target Market

    Our target market consists of consumers who have been exposed to Korean or Asian-inspired cuisine and is between the ages of 23 and 45. This age range is optimal given our focus on social media and content. Additionally, as reported by the National Restaurant Association in 2015, nearly half of American consumers between ages 18 and 44 eat at least four ethnic cuisines a month, compared to less than a quarter for those over the age of 65. In general, 80% of American consumers claim to enjoy at least one ethnic cuisine per month, demonstrating the demand for ethnic flavors.  

    Risks and Disclosures

    The reviewing CPA has included a “going concern” note in the reviewed financials. The Company has incurred losses from inception of $72,106 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 raise additional capital from the issuance of debt or the sale of stock, its ability to sell the Company’s flagship products and its ability to generate positive operational cash flow. 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.

    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 until end of year, they will be ramping up cash burn to promote revenue growth, plan to increase payroll, 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 weak. The Company currently has $9,074 in cash balances as of April 2018. 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 funds.

    The Company does not have an employment contract in place with Theodore Lee, the CEO, or Michael Kim, the COO. Employment agreements typically provide protections to the Company in the event of the employee’s departure, specifically addressing who is entitled to any intellectual property created or developed by those employees in the course of their employment and covering topics such as non-competition and non-solicitation. As a result, if Theodore or Michael were to leave KPOP Foods, the Company might not have any ability to prevent his direct competition, or have any legal right to intellectual property created during his employment. While the Company intends to enter into employment agreements with these individuals, there is no guarantee that an employment agreement will be entered into.

    We are vulnerable to fluctuations in the price and supply of ingredients, packaging materials, and freight. We purchase large quantities of raw materials, and the costs of ingredients and packaging, are volatile and can fluctuate due to conditions that are difficult to predict, including global competition for resources, weather conditions, natural or man-made disasters, consumer demand and changes in governmental trade and agricultural programs. Additionally, the prices of packaging materials and freight are subject to fluctuations in price. The sales prices to our customers are a delivered price. Therefore, changes in our input costs could impact our gross margins. Our ability to pass along higher costs through price increases to our customers is dependent upon competitive conditions and pricing methodologies employed in the various markets in which we compete.

    The Company has outstanding liabilities. The Company owes Celtic Bank $22,991.64 due in monthly installments ending on May 28, 2019, and GFI, Inc. $10,240, due on July 15, 2018.

    As a food production company, all of our products must be compliant with regulations by the Food and Drug Administration (FDA). We must comply with various FDA rules and regulations, including those regarding product manufacturing, food safety, required testing and appropriate labeling of our products. It is possible that regulations by the FDA and its interpretation thereof may change over time. As such, there is a risk that our products could become non-compliant with the FDA’s regulations and any such non-compliance could harm our business.

    General Risks and Disclosures

    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.

    KPOP Foods's Form C

    The Form C is a document the company must file with the Securities and Exchange Commission, 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.

    Download KPOP Foods's  Form C

    Frequently Asked Questions

    About Side by Side Offerings
    What is Side by Side?

    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.


    What is a Form C?

    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.


    What is Rule 506(c) under Regulation D?

    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.


    What is Reg CF?

    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.


    Making an Investment in KPOP Foods
    How does investing work?

    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 KPOP Foods. Once KPOP Foods accepts your investment, and certain regulatory procedures are completed, your money will be transferred from the escrow account to KPOP Foods in exchange for your securities. At that point, you will be a proud owner in KPOP Foods.


    What will I need to complete my investment?

    To make an investment, you will need the following information readily available:

    1. Personal information such as your current address and phone number
    2. Employment and employer information
    3. Net worth and income information
    4. Social Security Number or passport
    5. 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.


    How much can I invest?

    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, KPOP Foods has set a minimum investment amount of US $1,000.

    Accredited investors investing $20,000 or over do not have investment limits.


    After My Investment
    What is my ongoing relationship with the Issuer?

    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:

    1. The company becomes a fully-reporting registrant with the SEC
    2. The company has filed at least one annual report, but has no more than 300 shareholders of record
    3. The company has filed at least three annual reports, and has no more than $10 million in assets
    4. The company or another party purchases or repurchases all the securities sold in reliance on Section 4(a)(6)
    5. 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.


    How can I sell my securities in the future?

    Currently there is no market or liquidity for these securities. Right now KPOP Foods does not plan to list these securities on a national exchange or another secondary market. At some point KPOP Foods 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 KPOP Foods either lists their securities on an exchange, is acquired, or goes bankrupt.


    How do I keep track of this investment?

    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.


    Other General Questions
    What is this page about?

    This is KPOP Foods'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 KPOP Foods's Form C. The Form C includes important details about KPOP Foods's fundraise that you should review before investing.


    How can I (or the company) cancel my investment under Regulation CF?

    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


    What if I change my mind about investing?

    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.