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VirZOOM, Inc is "testing the waters" to gauge market demand from potential investors for an Offering under Tier II of Regulation A. No money or other consideration is being solicited, and if sent in response, it will not be accepted. No sales of securities will be made or commitment to purchase accepted until qualification of the offering statement by the Securities and Exchange Commission (the “Commission”) and approval of any other required government or regulatory agency. An indication of interest made by a prospective investor is non-binding and involves no obligation or commitment of any kind. No offer to buy securities can be accepted and no part of the purchase price can be received without an Offering Statement that has been qualified by the Commission.

Total Calories Burned

792,936

Total Virtual km Travelled

92,419

  • $1M China Daily E-Sports distribution deal Dec. 2016
  • HTC vSports partnership, Life Fitness vSports, and Fitbit vSports partnerships launching Jan. 2017
  • Sold via major online retailers Amazon.com, BestBuy.com, Target.com, and GameStop.com
  • The median time customers play VirZOOM is over 25 minutes per day with less than 20 hours between sessions
  • Amount raised:  
  • Close date:  
  • Indicated Interest:  US $1,545,000

Deal status

Testing the Waters

Indicated interest

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Deal status

TTW

  • VirZOOM, Inc is “testing the waters” to gauge market demand from potential investors
  • An indication of interest made by a prospective investor is non-binding and involves no obligation or commitment of any kind
  • Securities are not for sale, as the offering has not been qualified by the Securities and Exchange Commission
  • No money or other consideration is being solicited

“This is a fantastic product. I am not the type of person who would look forward to riding an exercise bike or going to a gym. I know that I should, but don't. But, this is really different. This is FUN.” - Amazon Product Review


VirZOOM creates engaging VR experiences powered by you. Pedal your VirZOOM Controller to propel yourself through endlessly exciting VR games. Power a horse in a race, a tank in battle, a fire-breathing dragon through mountains. Patent pending software controls keep you feeling good. A workout without the work.

In early 2014,  VirZOOM co-founders Eric Janszen and Eric Malafeew set out to get the sedentary consumer moving with a new concept: virtual reality exercise games. They committed themselves to creating a fun way to exercise using virtual reality to get millions of under-exercised consumers on the road to health and fitness. The result is an entirely new kind of game and exercise called virtual sports (vSports). 

vSports is real physical competition in virtual worlds based on VirZOOM's inexpensive and versatile patent pending virtual reality exercise game platform. With partners Fitbit, Life Fitness, HTC, and AMD only VirZOOM can bring exciting physical and immersive online virtual game competition to millions of consumers all over the world. Players of all ages engage in thrilling competitive virtual challenges to consumers including cycling, F1 racing, and tank battles all powered by the player. Players can engage in real time online challenges or engage at a later time for high score. VirZOOM statistics show customers do not get bored with vSports the way they do with other indoor equipment-based exercise. The play VirZOOM vSports for longer periods more frequently over time.

VirZOOM employs an exciting new technology, virtual reality, to solve an old and very large customer problem: motivating sedentary people of all ages to exercise.

Pitch Deck

Product & Service

VirZoom vSports Content

VirZOOM Arcade is an ever-expanding collection of free multiplayer online VR sport games, available on Steam and the PlayStation Network store with updates delivered automatically to you. You can also use the VirZOOM Gamepad Emulator to turn your bike into a virtual joystick, keyboard, and mouse to play popular games on PC.

The my.virzoom web service allows players to track performance, set goals, and challenge friends to competitions, and integrates with Fitbit and Strava. VirZOOM's own exercise bike based VR game controllers are sold online directly and through online retailers Amazon.com, BestBuy.com, Target.com, and GameStop.com, and in 2017 through a growing number of regional vSports Centers across the U.S. and China. The exercise bike portion of VirZOOM's own VR game controller is sub-assembled in a factory in China with IP-sensitive electronics manufacturing and final assembly done in a Sony factory in Mexico. VirZOOM Arcade games are distributed on Steam for PC and PlayStation Network for PS4.

VirZoom vSports Controller

Uniquely VirZOOM virtual reality games are played by pedaling and leaning while seated on a modified exercise bike, with control buttons and triggers for game play. The faster you pedal in the real world the faster you move in the virtual world. VirZOOM's sensor technology turns a stationary exercise bike into a specialized VR game controller. VirZOOM's ever-evolving and growing library of virtual reality exercise games, compatible with all major VR systems including HTC Vive and Sony Playstation VR, are designed from the ground up by a unique AAA game development with feedback from hundreds of alpha sites, betas sites, and customers since July 2015.

Media Mentions

Team Story

Since the early 1980s avid cyclist, start-up investor and CEO of venture-backed companies Eric Janszen nursed the idea of using virtual reality to make indoor cycling fun instead of a drag. Not until the appearance of Oculus Rift in 2013 did the potential for a commercially viable VR exercise game product finally arrive. Egged on by members of his investment group in late 2013 to pursue the idea, in early 2014 he approached his friend Eric Malafeew, Chief Architect for highly successful titles Guitar Hero, Rock Band, and Dance Central titles, games that combined unique game controllers with unique games. 

After building a prototype with a bicycle and laptop in Eric Malafeew's basement in early 2014 the two entrepreneurs decided the concept had legs -- literally. Over the next year Malafeew evolved the prototype and patent while Janszen developed the business model and business plan. By February 2015 they formed VirZOOM. In March Janszen raised the initial $1.8M in seed funding, mostly from the investor group that egged him on in early 2014, and by April 1 the core team was in place in Harvard Square offices in Cambridge, MA.

Malafeew brings Virginia Tech undergraduate and MIT graduate engineering training and 20 plus years of robotics, simulation, and video game and game controller design and engineering expertise to the project. He recruited the entire the AAA game development and hardware engineering teams from colleagues. He also contributes a wealth of game industry contacts. Janszen brings decades of product management, sales, operations, finance, and business design and planning expertise as well as board experience to the project. He also brings accredited investors from among friends and colleagues he has known for over 20 years who have supplied 90% of the company's funding to date. He is personally the largest single investor in the company.

Meet the Founders

Eric Janszen

Co-Founder & CEO

Eric Janszen is an avid bike rider, who co-founded VirZOOM with over 25 years experience in the tech and investment space. Eric spent over a decade as a product manager for start-ups, before joining bluesocket as President and CEO. He has run a seed-stage investment firm, acted as an economic analyst, and has founded his own online economics and financial services company. For the last decade, he has served on the Board of Directors for TruTouch Technologies. Eric graduated from U. Mass. Amherst with a B.S. in Resource Economics.

Eric Malafeew

Co-Founder & CTO

Before co-founding VirZOOM, Eric worked for over 25 years on videogames and military simulations. First, on flight simulators and robotics for the government, then in the private sector, creating the game engine for Harmonix Music Systems, and acting as Chief Architect on blockbuster titles like Guitar Hero, Rock Band, and Dance Central. He brings his experience building games with unique game controllers to VirZOOM, with its exercise-bike-based VR game controller, and specialized VR games. He received a B.S. in Mechanical Engineering from Virginia Tech, and an M.S. in Mechanical Engineering from MIT.

Eric Janszen

Co-Founder & CEO

Eric Janszen is an avid bike rider, who co-founded VirZOOM with over 25 years experience in the tech and investment space. Eric spent over a decade as a product manager for start-ups, before joining bluesocket as President and CEO. He has run a seed-stage investment firm, acted as an economic analyst, and has founded his own online economics and financial services company. For the last decade, he has served on the Board of Directors for TruTouch Technologies. Eric graduated from U. Mass. Amherst with a B.S. in Resource Economics.

Eric Malafeew

Co-Founder & CTO

Before co-founding VirZOOM, Eric worked for over 25 years on videogames and military simulations. First, on flight simulators and robotics for the government, then in the private sector, creating the game engine for Harmonix Music Systems, and acting as Chief Architect on blockbuster titles like Guitar Hero, Rock Band, and Dance Central. He brings his experience building games with unique game controllers to VirZOOM, with its exercise-bike-based VR game controller, and specialized VR games. He received a B.S. in Mechanical Engineering from Virginia Tech, and an M.S. in Mechanical Engineering from MIT.

Key Team Members

Rob Kay

Lead Game Designer

Peter Macdonald

Art Director

Christopher Farnham

Director of Integrated Systems

Henrik Holmdahl

Software Engineering Director

Spencer Honeyman

Business Development Director

Kaitlynn Hegarty

QA Lead and Sound Designer

Anthony Lorusso

Hardware Engineering Director

Jason Tocci

Community Manager and QA Support

Bryn Bennett

Senior Software Engineer

Ben De La Cretaz

COO

Notable Advisors & Investors

Alex Wang

Investor, Founding Partner of Skywood Capital

Chris Kresser

Investor, Author of the New York Times best seller, Your Personal Paleo Code

Jim Goldinger

Investor, Co-Founder of TD Capital Ventures and Fairhaven Capital Partners

Mark Sisson

Investor, American fitness author and blogger

Patrick Nally

Advisor, Director, West Nally, Sports Marketing

Peter Nash

Advisor, International Management Consultant

Jon Goldman

Advisor, Venture Partner, Greycroft

Michael Dornbrook

Advisor, Member Board of Directors at OtherSide Entertainment

Paul Eibeler

Advisor, Chairman of COKeM International

Chris Thomajan

Financial Discussion

The VirZOOM VR Exercise Game Platform requires consumers to have a VR system comprised of a VR headset and a PC or VR headset and a game console. In 2016 VR systems cost from $700 for a Sony PSVR headset and PS4 console to $2,000 for a HTC Vive headset and gaming PC. These cost of PC-based VR is expected to decline to under $1000 in 2017 with the introduction of Microsoft VR. Google Daydream will expand the market for mobile VR by bringing VR capabilities to millions of mobile computing devices. VirZOOM supports all of these major VR platforms.

In Q4 2016 VirZOOM Controllers shipped in volume to consumers through its distributor COKeM International to online retailers Amazon.com, BestBuy.com, GameStop.com, and Target.com. VirZOOM Arcade Games distributed via Valve's Steam store and Sony's Playstation Network (PSN), the largest game stores in the world.

The goal of Q3 and Q4 2016 shipments was to establish an initial customer base for collection of product feedback, telemetry data, and refinement of supply chain and manufacturing processes. In 2017 the company will shift gears to focus on increasing unit sales volumes and average sales price while lowering COGs and cost-of-sales via vSports business execution.

Total COGs including shipping was $320 and $205 respectively for the first two batches units built and sold in 2016, including NRE costs to set up manufacturing processes in China and Mexico. With manufacturing processes established COGs is expected to decline to $105 by Q4 2017. By the end of 2017 the company expects to license VirZOOM sensor and security technology to 3rd party VirZOOM Controller makers and phase out specialized exercise bike manufacturing by the end of 2018.

The VirZOOM Controller sells for $399.95 directly from its web site and also through major online retailers via its distributor COKeM International. Gross margins on shipments of the 2nd batch of VZ Controllers through distribution was close to zero while gross margins on direct sales averaged 40%.

Shipments of tethered VR system sales by suppliers Oculus, HTC, and Sony were delayed from Q1 to Q2 2016 and 2016 unit volumes were below analyst forecasts reportedly due to Sony PSVR supply constraints. Nonetheless VirZOOM realized Q4 2016 revenue of $325,000 versus the company's $250,000 revenue forecast.

The company's flagship VirZOOM Controller, made in China and Mexico, embodies unique sensor and security technology that make viable commercial agreements possible in the Chinese market where prevention of pirating of hardware and software is a critical product requirement. This sensor and security technology enabled the company to close a $1M distribution deal with a major Chinese state-owned entity Daily E-Sports Datang Network Company Ltd.

The company's sensor and security technology is designed to be licensed via OEM agreements to fitness equipment makers who will supply VirZOOM Controllers with embedded circuits and firmware for VirZOOM Arcade game use. Initially this sensor and security technology is embodied in an add-on aftermarket product to cause certain existing exercise bikes to be used to play VirZOOM Arcade games, that is, to make them "VirZOOM-Ready." In January 2017 Life Fitness became the first fitness equipment maker to engage in a VirZOOM-Ready pilot program.

Starting in Q1 2017 VirZOOM will begin to execute on its next phase of development as a virtual sports or vSports platform company. The company has as of the end of December 2016 contracted 18 vSports Centers across the U.S. to demonstrate VirZOOM and sell vSports Systems comprised of the VirZOOM Controller, VirZOOM Arcade games, a VR headset and PC or console. The company plans to have 100 vSports Centers across the U.S. by the end of 2017. If each vSports Center sells on average 12 units per month by Q4 2017, VirZOOM can operate on a cash-flow break-even basis without recurring revenue from subscriptions. Recurring revenue from my.virzoom subscriptions are planned to begin in Q2 2017.

From company founding in April 2015 VirZOOM's one-of-a-kind technology and business team brought an entirely new game hardware and content product to market in 14 months, and by Q4 2016 was shipping product in volume across the U.S. and Canada, on $4.4M in seed financing.

Use of $5M Series A funds is to build out the vSports sales channel, instituting the recurring revenue model, achieving reductions in COGs and increasing sales volumes at higher ASP to achieve cash flow breakeven by Q4 2017.

Market Landscape

SuperData 2016 Worldwide Virtual Reality Market by Platform is projected to  increase from $3.7B in 2016 to $40.4B by 2020.


VirZOOM is not targeted at spin class consumers as is Peloton Cycle, nor at hard core bike enthusiasts as is Zwift. The consumers of these products have a form of exercise they enjoy and stick with. VirZOOM customers do not.

The total available market for spin class consumers and for hard core bike enthusiasts is relatively small compared to the size of the market of all of the consumers who do not have a form of exercise they enjoy.

VirZOOM is not targeted at consumers who have a form of exercise they enjoy but rather at everyone else, at the vast majority of consumers of all ages who are looking for a new form of exercise that they do enjoy.

Through thousands of play tests with over ten thousand subjects VirZOOM has since early 2015 refined its combination of exercise games and controller to create an exercise experience that we call vSports that they do enjoy.

Customer reviews and telemetry data confirm that VirZOOM has achieved this goal. The next task is to expand the business.

One gating factor for VirZOOM product adoption is VR system cost. As mobile VR options such as Google Daydream make VR more affordable the VirZOOM platform will become affordable and accessible to more and more consumers. 

The VirZOOM product roadmap has content for Google Daydream and GearVR by April 2017 and for Microsoft VR around the same time. When mobile VR ships in the millions of units with android devices the total available market for VirZOOM will expand significantly.

Another gating factor for VirZOOM product adoption is experience. VirZOOM is so new that consumers cannot imagine what it's like to use the product. They have to try it. But how can VirZOOM make the VirZOOM experience available to consumers without spending millions on specialty stores the way Peloton did?

That's where VirZOOM vSports Centers come in. Already the company has 18 in operation. By the end of 2017 at least 100 will be up and running across the U.S.



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.

Frequently Asked Questions

About Reg A Offerings
What does it mean that the SEC has qualified this offering?

"The SEC has qualified this offering" means the SEC has permitted VirZOOM, Inc to offer for sale the securities described in the Offering Circular to investors such as you. The SEC is not judging the merits, accuracy, or completeness of the offering and information in the Offering Circular. Rather, the SEC is merely ensuring VirZOOM, Inc has met all legal disclosure and regulatory requirements necessary to make these shares available to you.


Making an Investment in VirZOOM, Inc
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 VirZOOM, Inc. Once VirZOOM, Inc accepts your investment, and certain regulatory procedures are completed, your money will be transferred from the escrow account to VirZOOM, Inc in exchange for your shares. At that point, you will be a proud owner in VirZOOM, Inc.


What is the difference between preferred equity and a convertible note?

Preferred equity is usually issued to outside investors and carries rights and conditions that are different from that of common stock. For example, preferred equity may include rights that prevent or minimize the effects of dilution or grants special privileges in situations when the company is sold.

A convertible note is a unique form of debt that converts into equity, usually in conjunction with a future financing round. The investor effectively loans money to a startup with the expectation that they will receive equity in the company in the future at a discounted price per share when the company raises its next round of financing.

To learn more about startup investment types check out “How to Choose a Startup Investment” in our academy.


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 government-issued identification
  5. ABA bank routing number and checking account number (typically found on a personal check or bank statement)

What if I change my mind about investing?

Until a closing occurs, you may cancel your investment at any time, for any reason. You will receive an email when the closing occurs and your shares 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 email us at cancellations@seedinvest.com. Please include your name, the company's name, the amount, the investment number, and the date your made your investment.


After My Investment
How can I sell my shares in the future?

Currently there is no market or liquidity for these shares. Right now VirZOOM, Inc does not plan to list these shares on a national exchange or another secondary market. At some point VirZOOM, Inc 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 VirZOOM, Inc either lists their shares 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.


Other General Questions
What is this page about?

This is VirZOOM, Inc'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. You will also find a copy of the VirZOOM, Inc's Offering Circular, which has been qualified by the SEC. The Offering Circular includes important details about VirZOOM, Inc's fundraise that you should review before investing.


What are the risks of this investment?

This investment is highly speculative and should not be made by anyone who cannot afford to risk the entire investment amount. In addition to these risks, you should carefully consider the specific information and risks disclosed in VirZOOM, Inc’s profile and Offering Circular.