|1||Impact: Donations to political campaigns are the most effective way to motivate politicians|
|2||Timing: 18 to 34-year-olds desire effective civic engagement at an all-time high|
|3||Traction: 3,600+ people downloaded the app in just 3 months with limited marketing|
|4||ROI: At scale, we hope (not guarantee) ChangeRoots will be $100+ million rev. company with $50 million in profit|
|5||Founder Commitment: Cofounders have invested more than $950K of their own money|
|6||Successful Entrepreneurs: Cofounders previously built a startup to $20+ million annual revenue|
Our vision at ChangeRoots is a world rooted in love, where we prioritize the wellbeing of all over party loyalty. Toxic partisanship is a tribal, zero-sum way of looking at the world that is breaking our democracy apart.
Today, trust in government is at an all-time low. Contempt for the other party is at an all-time high. And legislative gridlock is the worst it’s been in 40 years.
Throughout history, when democracy has been at the brink of collapse, leaders emerge who rise above the pettiness of the day to heal our nation. We need those leaders now more than ever.
ChangeRoots is the app that seeds the ground for this great leadership to emerge by changing the incentivize structure in politics. Our app empowers people to incentivize politicians to rise above, to find common ground and to pass legislation that improves our wellbeing.
The country and especially Gen Z is fed up with our broken parties and our broken politics. Tens of millions of young Americans are primed for something that gives them the power to shake up politics. Gen Z understands that money has power. That’s why they use their wallets every day to make statements about their values.
Our early traction shows that we’re hitting the mark. It’s been 3 months since we launched the app and our growth is strong.
More than the numbers, the feedback has been tremendous. This is even before we’ve rolled out some of our most engaging features.
ChangeRoots is a purpose-driven business that has the potential to become highly profitable. We earn revenue from three proven business models - user tips, subscriptions and data.
GoFundMe earns over $100m per year from tips. And Headspace earns over $200m from 2m subscribers. We believe our data on what statements and issues motivate 18-35yr olds to donate is one of a kind.
Our early traction suggests that we will be able to achieve that much sought after 3:1 LTV: CAC ratio. (LTV = "lifetime value"; CAC="customer acquisition cost). This is driven by our layered revenue model and low customer acquisition costs.
We think this is your chance to get in on the ground floor of not just a successful consumer app with great prospects, but this is your chance to be part of laying the foundation for that post-partisan world, that world rooted in love that we’ve always dreamed of in our hearts, but never believed possible. That future starts now, we invite you to join us.
How the app works is simple. We publish political statements on a daily feed, like a curated twitter. By tapping Keep It Up on a statement, users donate a minimum of $0.25 to that politician as a reward.
Or a user can tap Do Better on a statement, sending a donation to a fund that goes to that politician's challenger. We tag the content as healthy, neutral or toxic based on our proprietary methodology. This way respect and integrity get rewarded while incivility and contempt get disincentivized.
ChangeRoots, Inc has financial statements ending December 31 2019. Our cash in hand is $121,187, as of May 2020. Over the three months prior, revenues averaged $100/month, cost of goods sold has averaged $0/month, and operational expenses have averaged $52,000/month.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes and other financial information included elsewhere in this offering. Some of the information contained in this discussion and analysis, including information regarding the strategy and plans for our business, includes forward-looking statements that involve risks and uncertainties. You should review the "Risk Factors" section for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
We post a daily feed of political actions in the form of politician quotes on our mobile app.
ChangeRoots explains what politicians are saying without taking sides. We write four sentences of context around every politician quote that we post to our daily feed. ChangeRoots users interact with this feed to train politicians. Users can reward statements by micro-donating to a politician’s campaign. They can also discourage certain behavior by micro-donating to their opponent’s campaign.
In five years, our goal is to make civic engagement as easy as checking your Instagram feed.
Using proprietary algorithms and deep political expertise, we will mobilize crowd donations to maximize wellbeing. We’ll make learning about issues, researching politicians, and achieving maximum impact a seamless experience on your phone. We estimate (though with no guarantees) ChangeRoots will have 10 million active users donating through the app each month, resulting in over $100 million+ in ARR.
Given the Company’s limited operating history, the Company cannot reliably estimate how much revenue it will receive in the future, if any.
ChangeRoots, Inc. was incorporated in the State of Delaware in July 2018.
Since then, we have:
Historical Results of Operations
Our company was organized in July 2018 and has limited operations upon which prospective investors may base an evaluation of its performance.
Related Party Transaction
Refer to Question 26 of this Form C for disclosure of all related party transactions.
Liquidity & Capital Resources
To date, the company has been financed with $20,000 in debt and $957,774 in SAFEs.
After the conclusion of this Offering, should we hit our minimum funding target, our projected runway is 5 months before we need to raise further capital.
We plan to use the proceeds as set forth in this Form C under "Use of Funds". We don’t have any other sources of capital in the immediate future.
We will likely require additional financing in excess of the proceeds from the offering in order to perform operations over the lifetime of the Company. We plan to raise capital 5 months after the close of this offering if we raise our minimum target of $250,000. If we raise the $500,000 target, we plan to raise capital 8 months after the close of this offering. If we raise $1,000,000 will raise capital 12 months after the close of this offering. Except as otherwise described in this Form C, we do not have additional sources of capital other than the proceeds from the offering. Because of the complexities and uncertainties in establishing a new business strategy, it is not possible to adequately project whether the proceeds of this offering will be sufficient to enable us to implement our strategy. This complexity and uncertainty will be increased if less than the maximum amount of securities offered in this offering is sold. The Company intends to raise additional capital in the future from investors. Although capital may be available for early-stage companies, there is no guarantee that the Company will receive any investments from investors.
Runway & Short/Mid Term Expenses
ChangeRoots, Inc. cash in hand is $121,187, as of May 2020. Over the last three months, revenues have averaged $100/month, cost of goods sold has averaged $0/month, and operational expenses have averaged $52,000/month, for an average burn rate of $51,900 per month. Our intent is to be profitable in 18 months.
Since the date of our financials, we have gone from a website application to a mobile application. We have also significantly increased our active user base, adding 3,500 active users.
If we are able to raise our minimum target, we believe we can acquire 20,000 active users and have $12k MRR (monthly recurring revenue) within 12 months. If we are able to raise our maximum target, we believe we can acquire 100,000 users and have $75k MRR. These projections cannot be guaranteed.
If we hit our minimum target, we hope our monthly expenses will be maintained at $50K and it will provide us with 4-5 months additional runway to secure additional investments. If we hit the $500k target, we aim for monthly expenses to be $60k for 8 months of runway and if we hit the $1M target, we hope monthly expenses will increase to $80K for an additional 12 months of runway.
For additional capital, we could potentially solicit angel investor investors in our network.
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