- 2018 revenue through October of $285,790, a 300%+ increase from the comparable period in 2017 (based on unaudited financials)
- Direct-to-consumer Gross Product Margin of up to 88% (based on unaudited financials)
- Featured in prominent media publications such as GQ, Gear Patrol, Cool Material, Men's Health, & Details
- Average order value of $129 and a Return Customer Rate of 28% since March 2017
- Total Amount Raised: US $25,000
- Total Round Size: US $500,000
- Seed :
- Minimum Investment: US $1,000 per investor
- : Crowd Note
- US $2,000,000 :
- Side by Side Offering
The men’s swimwear market, currently valued at $7.1B, has shown strong growth due to heightened interest in health and recreational activities.
However, while the men’s swimwear market has been growing, there is a lack of differentiated brands, both in terms of narrative and design. PANGEA fills that void by offering a genuinely unique fashion aesthetic for tailored men’s swimwear as well as a rich narrative surrounding travel and exploration.
We create premium men’s swimwear, offering tailored fits in exotic prints. We offer our swimwear in three timeless fits and create original, brand-owned designs inspired from our own worldly travels. Our shorts feature a luxurious, “Quick-Dry” Japanese Polyester with antique nickel hardware, all hand-sewn in Colombia to create the ultimate travel companion. We go farther than our competitors by offering more than just good fabrics and tailored fits, but instead, worldly designs that are inspired from our own travels around the world. Our long-term goal is to expand outside of swimwear and create a full lifestyle brand that outfits the modern day traveler.
2018 revenue through October of $285,790, a 300%+ increase from the comparable period in 2017, all with only $200k in funding since inception. We currently sell to customers in over 15 countries with 19% of our total orders being international. Since launching in 2014, we have received several press accolades including GQ, Gear Patrol, Cool Material, Men’s Health & Men’s Journal and also have had two successful seasons in Nordstrom as well as high-end boutiques around the world.
We design, manufacture, and retail men’s swimwear. Our swimwear is designed out of Los Angeles but produced in Barranquilla, Colombia. Our current product cost is around $12/swimsuit, but we anticipate a future cost of $9/swimsuit with the scaling of the business.
Current Profit Margins
- COGS: $12
-Average Pricepoint: $43
-Gross Profit: $31; Margin: 73%
-Average Pricepoint: $95
-Gross Profit: $83; Margin 88%
We are currently a primarily direct-to-consumer business, with a proven model showcasing demand in over 15 countries, with 19% of our business being international.
Other paid analytics to note:
- CPA: $20
- AOV: $129
- ROAS: 2.41
- Repeat Customer Rate: 28%
Additionally, email and organic social prove to be an important part of our online scaling.
Email Analytics:-Email List: Over 4,750
-Email List Growth: 10%+ per month
-Drives ~29% Monthly Revenue:
Social Analytics:-Total Followers: 13.5k
-International Followers: 53% of Total
Additionally, given the success of recent pop-ups at hotel pool parties, we plan to expand into “pop-up” brick & mortar and strategic wholesale in 2019.
The Pangea Man (Target Audience)
The PANGEA man is the modern-day traveler, or “the worldly gentleman”. Our target market is a digitally savvy 24-36 man, with interests in art, fashion, and of course, travel. Average household income is $80k+ and the majority of our customer base lives in major cities around the world.
In short, the PANGEA man is one part luxury enjoyer, one part travel enthusiast, and two parts adventure seeker.
- Brand Narrative/Storytelling: One of the difficult challenges of entering retail is building an authentic brand that resonates with consumers. In the premium men's swim market, few competitors offer a brand narrative past fits and fabrics. Since conception, we've been dedicated to laying a foundation to build a lifestyle brand, creating content that inspires our customers to find creativity through travel. We sell more than just a swim short, but instead, a travel companion for your next adventure.
- Strategic Pricepoint: We are strategically priced (under $100) in the premium men's swim market to offer a product that matches the quality of our highest-priced competitors, but also not alienate a younger, millennial consumer. This has allowed us to both enter and capture market share from competitors on both sides of the industry. We see many of our customers "graduating" from Chubbies to PANGEA after college, at the point when they begin seeking clothing that is slightly more elevated. We also see many of our customers transitioning to us from Orlebar Brown when they see the value in being able to buy 2x PANGEA suits for the price of 1x OB suit and receive similar quality.
- Product Differentiation: Our swim shorts are inspired by our own travels to some of the farthest flung places in the world. Each print we design is uniquely different and treated like a piece of art with a story behind its origin; creating a loyal customer who appreciates the craft and inherently relays that story to their sphere of influence.
PANGEA was born on a 2013 summer evening in Venice when I met my partner, LeDoux Vanveckhoven.
Living by the beach, we spent every day in swimwear. After a failed shopping trip for a new swimsuit due to lack of creativity and an overpriced selection, I saw an opportunity in the market. So, LeDoux and I began concepting a new line, marrying our passions of travel and fashion into the soon-to-be PANGEA. Taking a risk, I shared the ideas with then client, now friend and unofficial advisor, Paige Adams-Geller (of PAIGE). She was beyond supportive and helped us get started in the industry.
Since then, we have built PANGEA into what it is today. A year in, LeDoux took a job at Hawke Media, now VP of Biz Development, allowing him to advise on digital strategy while also providing investment. Staying on as CEO, I have worked any side hustle possible, from catering jobs to an agency's Head of Strategy, sleeping on couches (to pay for Nordstrom production)… all to keep the business afloat.
For us, PANGEA is more than just a business, it is a lifelong dream. We believe it has the potential to not only be a multimillion-dollar swimwear brand but more... an inspiration to always take the path less traveled.
Post-raise, we anticipate to hire a full-time COO (Anthony Garrett) and a full-time wholesale director.
No, the other co-founder, LeDoux Vanveckhoven, currently serves as an investor/unofficial advisor. He works full-time at Hawke Media and brings a large amount of strategic knowledge and experience to the table for DTC.
We are a primarily DTC business, manufacturing all of our own goods to achieve optimal profit margins.
Social Ad Placement is also determined using Google Analytics by identifying the path length and LTV to determine our sales cycle.
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 $5,000 (under Reg CF only)
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.
Investors who invest $50,000 or less will have their securities held in trust with a Custodian that will serve as a single shareholder of record. These investors will be subject to the Custodian’s Account Agreement, including the electronic delivery of all required information.
Early Bird Specials:
*Invest by 11:59pm ET on December 15th to receive the next tier of perks (one tier up from your investment amount). Applicable for $5,000 investments and above.
*First 100 investors to invest $2,500 or more will receive a custom "MAKE THE WORLD PANGEA AGAIN" T-Shirt.
Tier 1. Investors of $2,500 or more will receive two free swimsuits of their choice.
Tier 2. Investors of $5,000 or more will receive three free swimsuits of their choice, + 10% off code for life.
Tier 3: Investors of $20,000 or more will receive four swimsuits of their choice, + 20% off code for life.
GOLD: Investors of $50,000 or more will receive Tier 3 perks, plus a all-expenses paid invitation to join the PANGEA team on a future international location shoot. **Max one investor per shoot.
It is advised that you consult a tax professional to fully understand any potential tax implications of receiving investor perks before making an investment.
The graph below illustrates theor the of PANGEA's prior rounds by year.
PANGEA Partners, LLC (the “Company”) is a California limited liability company that was founded in 2014, and is headquartered in Los Angeles, California. The Company sales men’s swimwear.
For the year ending December 31, 2017, it recognized revenue of $79,556, with a cost of goods sold (COGS) of $46,483, resulting in gross profit of $33,073. In the same financial year, the company incurred expenses of $45,053, representing a net loss of $11,980. For the prior year, it recognized revenue of $35,996, with a COGS of $53,684, resulting in gross profit of -$17,688. In the same financial year, the company incurred expenses of $18,261, representing a net loss of $35,949.
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 $110,513.97 in cash on hand as of 10/31/2018 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.
Menswear is expected to outpace the growth of womenswear over the next 2 years (5% growth by 2020). One driver of this growth is men’s swimwear, which grew 15.4% in the US from 2010-2015.
Given the most recent exit of Orlebar Brown to Chanel for $65M, the global men’s swimwear market was valued at $7.2B, up 4.6% from $6.9B in 2017.
Factors driving category growth are:
- Men’s greater emphasis on appearance, fueled by social media, & dress codes softening globally
- Increased demand for “transitional” shorts, that serve as both casual wear and swimwear
- Growing desire for clothing that casts silhouettes, including ones that reveal body shape (i.e. not boardshorts)
- 45% of men shopping online
We are strategically priced at under $100 to offer a high-quality product that matches the quality of our highest-priced competitors, but also does not alienate a younger, millennial consumer. Additionally, we are positioned as more than just a swimwear brand, but a travel/resort lifestyle brand, allowing for future expansion into new menswear categories.
Both strategies have allowed us to both enter and capture market share from competitors from opposite price-points of the industry. We see many of our customers "graduating" from Chubbies to PANGEA after college, when they begin seeking more elevated brands. Additionally, we see a transition to us from Orlebar Brown when the value is discovered.
- Orlebar Brown (recently exited at ~$65M to Chanel, annual revenue of $32.6M)
- Onia (projecting 2018 sales to be $30M)
- Vilebrequin (exited in 2012 to G-III for $106.2M)
Despite our competition, we feel confident that we will succeed by not only offering high-quality product, but by our unique brand proposition.
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 apparel 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 forecasts project $1MM+ annual revenue growth in 2019. If its assumptions are wrong, and its projections regarding market penetration are too aggressive, its financial projections may overstate its 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 until end of year, 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 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.
The Company does not currently hold any intellectual property and they may not be able to obtain such intellectual property. Their ability to obtain protection for their intellectual property (whether through patent, trademark, copyright, or other IP right) is uncertain due to a number of factors, including that the Company may not have been the first to make the inventions. The Company have not conducted any formal analysis of the “prior art” in their technology, and the existence of any such prior art would bring the novelty of their technologies into question and could cause the pending patent applications to be rejected. Further, changes in U.S. and foreign intellectual property law may also impact their ability to successfully prosecute their IP applications. For example, the United States Congress and other foreign legislative bodies may amend their respective IP laws in a manner that makes obtaining IP more difficult or costly. Courts may also render decisions that alter the application of IP laws and detrimentally affect their ability to obtain such protection. Even if the Company is able to successfully register IP, this intellectual property may not provide meaningful protection or commercial advantage. Such IP may not be broad enough to prevent others from developing technologies that are similar or that achieve similar results to theirs. It is also possible that the intellectual property rights of others will bar the Company from licensing their technology and bar them or their customer licensees from exploiting any patents that issue from our pending applications. Finally, in addition to those who may claim priority, any patents that issue from our applications may also be challenged by their competitors on the basis that they are otherwise invalid or unenforceable.
Its international operations could be affected by currency fluctuations, capital and exchange controls, expropriation and other restrictive government actions, changes in intellectual property legal protections and remedies, trade regulations and procedures and actions affecting approval,production, pricing, and marketing of, reimbursement for and access to its products, as well as by political unrest, unstable governments and legal systems and intergovernmental disputes. Any of these changes could adversely affect its business. Many emerging markets have experienced growth rates in excess of the world’s largest markets, leading to an increased contribution to the industry’s global performance. There is no assurance that these countries will continue to sustain these growth rates.
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 our products 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.In addition, achieving growth depends on our successful development, introduction, and marketing of innovative new products and line extensions. Successful innovation depends on our ability to correctly anticipate customer and consumer acceptance, to obtain, protect and maintain necessary intellectual property rights, and to avoid infringing the intellectual property rights of others and failure to do so could compromise our competitive position and adversely impact our business
In general, demand for our products and services is highly correlated with general economic conditions. A substantial portion of our revenue is derived from discretionary spending by individuals, which typically falls during times of economic instability. Declines in economic conditions in the U.S. or in other countries in which we operate may adversely impact our consolidated financial results. Because such declines in demand are difficult to predict, we or the industry may have increased excess capacity as a result. An increase in excess capacity may result in declines in prices for our products and services.
Maintaining, extending and expanding our reputation and brand image are essential to our business success. We seek to maintain, extend, and expand our brand image through marketing investments, including advertising and consumer promotions, and product innovation. Increasing attention on marketing could adversely affect our brand image. It could also lead to stricter regulations and greater scrutiny of marketing practices. Existing or increased legal or regulatory restrictions on our advertising, consumer promotions and marketing, or our response to those restrictions, could limit our efforts to maintain, extend and expand our brands. Moreover, adverse publicity about regulatory or legal action against us could damage our reputation and brand image, undermine our customers’ confidence and reduce long-term demand for our products, even if the regulatory or legal action is unfounded or not material to our operations. In addition, our success in maintaining, extending, and expanding our brand image depends on our ability to adapt to a rapidly changing media environment. We increasingly rely on social media and online dissemination of advertising campaigns. The growing use of social and digital media increases the speed and extent that information or misinformation and opinions can be shared. Negative posts or comments about us, our brands or our products on social or digital media, whether or not valid, could seriously damage our brands and reputation. If we do not establish, maintain, extend and expand our brand image, then our product sales, financial condition and results of operations could be adversely affected.
We currently obtain components from single or limited sources, and are subject to significant supply and pricing risks. Many components, including those that are available from multiple sources, are at times subject to industry-wide shortages and significant commodity pricing fluctuations. While the Company has entered into agreements for the supply of many components, there can be no assurance that we will be able to extend or renew these agreements on similar terms, or at all. A number of suppliers of components may suffer from poor financial conditions, which can lead to business failure for the supplier or consolidation within a particular industry, further limiting our ability to obtain sufficient quantities of components. The follow-on effects from global economic conditions on our suppliers, also could affect our ability to obtain components. Therefore, we remain subject to significant risks of supply shortages and price increases. Our products often utilize custom components available from only one source. Continued availability of these components at acceptable prices, or at all, may be affected for any number of reasons, including if those suppliers decide to concentrate on the production of common components instead of components customized to meet our requirements. The supply of components for a new or existing product could be delayed or constrained, or a key manufacturing vendor could delay shipments of completed products to us adversely affecting our business and results of operations.
The Company’s success depends on the experience and skill of the board of directors, its executive officers and key employees. In particular, the Company is dependent on Nick Bradley. 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 key employees or any member of the board of directors or executive officer could harm the Company’s business, financial condition, cash flow and results of operations.
The team does not come from supply chain management/operations backgrounds. Because of this, there is a risk that they could not effectively manage the supply chain / operations / logistics of the business, which could impact customer relations and/or cash positions.
The company is required to lay out large sums for working capital requirements to buy and purchase goods and then sell the goods 2-6 months later. There is also the risk that the product could go out of style. 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.
Despite the company maintaining a low burn, the current cash position is considered very low given where they are in the life cycle. There is a risk that burn could spike which would limit the company’s ability to operate. 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 purchase inventory, 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.
Cyclical and seasonal fluctuations in the swimwear market may have an effect on the Company. Both cyclical and seasonal fluctuations in swimwear may affect their business. Swimwear sales generally slow during the winter months, and sales typically increase significantly in the spring and summer of each year. These seasonal trends may cause fluctuations in our quarterly results, including fluctuations in revenues.
The Company has not filed a Form D for its previous offering. The SEC rules require a Form D to be filed by companies within 15 days after the first sale of securities in the offering relying on Regulation D. Failing to register with the SEC or get an exemption may lead to fines, the right of investors to get their investments back, and even criminal charges. There is a risk that a late penalty could apply.
The Company does not keep proper records of their Board Minutes. Although the Company is not legally required to keep Board Records 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 Board Minutes will be kept going forward.
The Company does not have an employment contract in place with Nick Bradley, the CEO. 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 Nick were to leave Pangea, the Company might not have any ability to prevent his direct competition, or have any legal right to intellectual property created during his employment. There is no guarantee that an employment agreement will be entered into.
The reviewing CPA has included a “going concern” note in the reviewed financials. The Company has incurred losses from inception of approximately $134,647 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 attract users to its software platform 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.
The Crowd Notes will not be freely tradable until one year from the initial purchase date. Although the Crowd Notes 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 Crowd Notes. Because the Crowd Notes have not been registered under the 1933 Act or under the securities laws of any state or non-United States jurisdiction, the Crowd Notes have transfer restrictions under 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 Crowd Notes may also adversely affect the price that you might be able to obtain for the Crowd Notes 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.
We are selling convertible notes that will convert into shares or result in payment in limited circumstances. These notes only convert or result in payment in limited circumstances. If the Crowd Notes reach their maturity date, investors (by a decision of the Crowd Note holders holding a majority of the principal amount of the outstanding Crowd Notes) will either (a) receive payment equal to the total of their purchase price plus outstanding accrued interest, or (b) convert the Crowd Notes into shares of the Company’s most senior class of preferred stock, and if no preferred stock has been issued, then shares of Company’s common stock. If there is a merger, buyout or other corporate transaction that occurs before a qualified equity financing, investors will receive a payment of the greater of two times their purchase price or the amount of preferred shares they would have been able to purchase using the valuation cap. If there is a qualified equity financing (an initial public offering registered under the 1933 Act or a financing using preferred shares), the notes will convert into a yet to-be-determined class of preferred stock. If the notes convert because they have reached their maturity date, the notes will convert based on a $2,000,000 valuation cap. If the notes convert due to a qualified equity financing, the notes will convert at a discount of 20%, or based on a $2,000,000 valuation cap. This means that investors would be rewarded for taking on early risk compared to later investors. Outside investors at the time of conversion, if any, might value the Company at an amount well below the $2,000,000 valuation cap, so you should not view the $2,000,000 as being an indication of the Company’s value.
We have not assessed the tax implications of using the Crowd Note. The Crowd Note is a type of debt security. As such, there has been inconsistent treatment under state and federal tax law as to whether securities like the Crowd Note can be considered a debt of the Company, or the issuance of equity. Investors should consult their tax advisers.
The Crowd Note contains dispute resolution provisions which limit your ability to bring class action lawsuits or seek remedy on a class basis. By purchasing a Crowd Note this Offering, you agree to be bound by the dispute resolution provisions found in Section 6 of the Crowd Note. Those provisions apply to claims regarding this Offering, the Crowd Notes and possibly the securities into which the Crowd Note are convertible. Under those provisions, disputes under the Crowd Note will be resolved in arbitration conducted in Delaware. Further, those provisions may limit your ability to bring class action lawsuits or similarly seek remedy on a class basis.
You may have limited rights. The Company has not yet authorized preferred stock, and there is no way to know what voting rights those securities will have. In addition, as an investor in the Regulation CF offering you will be considered a Non-Major Investor (as defined below) under the terms of the notes offered, and therefore, you have more limited information rights.
You will be bound by an investment management agreement which limits your voting rights. As a result of purchasing the notes, all Non-Major Investors (including all investors investing under Regulation CF) will be bound by an investment management 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 Investors will be bound by this agreement, unless Non-Major Investors holding a majority of the principal amount outstanding of the Crowd Notes (or majority of the shares of the preferred equity the notes will convert into) held by Non-Major Investors vote to terminate the agreement.
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 of the Company’s outstanding voting securities beneficially own up to 90.79% of the Company’s voting securities. Subject to any fiduciary duties owed to our other owners or investors under California law, these owners may be able to exercise significant influence over matters requiring owner approval, including the election of directors 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.
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 PANGEA. Once PANGEA accepts your investment, and certain regulatory procedures are completed, your money will be transferred from the escrow account to PANGEA in exchange for your securities. At that point, you will be a proud owner in PANGEA.
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, PANGEA 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 PANGEA does not plan to list these securities on a national exchange or another secondary market. At some point PANGEA 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 PANGEA 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 PANGEA'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 PANGEA's Form C. The Form C includes important details about PANGEA'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.