|1||📈 900K+ monthly active users, 2.7M+ active app installations, and 1.1M+ daily email subscribers.|
|2||💰 Prev. investors incl. General Catalyst, a16z, Jack Dorsey, Will Smith, and Carlos Slim.|
|3||🌎 12M+ accounts and 2M+ lifetime transactions across 135 countries.|
|4||🙏 T-Pain is our "VP" of Product Testing.|
|5||📊 $324B global luxury goods market and growing.|
|6||💪 We have an established lifestyle brand, featured by Vogue, Rolling Stone, Forbes, and Apple.|
I am investing in Fancy.com because I believe the risk reward is terrific. Fancy once had an implied private market value of over one billion US dollars (!) and a top shelf investor list that included Will Smith, Carlos Slim Domit, and Francois Henri-Pinault. The capital previously raised amounted to over $100 million US. While some of that capital was poorly allocated, much of the remaining underlying assets that were developed with that capital are of substantial current value. These include:
- The Fancy brand name and URL/web site real estate
- 2.7 million verified installs of the fancy app
- Over 300,000 monthly visitors to Fancy.com
- Outsized potent SEO authority that has great value
- A tech stack that is up-to-date and world class on which to maintain and build the e-comm platform
All of these are the assets which you as an investor will own by investing now, from the pained days of “old Fancy” valued that was valued at > $1.2B
A bit over a year ago, new management was brought in and the company is now spearheaded by Greg Spillane. Greg and his family live near me here in San Diego. We chat often, and Greg and I used to meet monthly for coffee, pre-COVID. Greg and his team have done a wonderful job of stripping down the old bad habits, a too high expense structure, junky product from vendors that didn’t fulfill promises, a distracted product mix and more. Basically everything has been retooled.
- Average order size is up 25%+
- Margins are 3x year ago
- Monthly burn rate is down over 60%
- Return on ad-spend is up over 150%
For full transparency, I put $200,000 into Fancy a year ago when I first met Greg and reviewed the plan. I am also familiar with some of the other investors both from prior and current capital raises. The current raise is at a maximum, a modest total enterprise value of $12 million.
Going forward, the investment bet I’m making is this. I believe that the current underlying assets; name, traffic, authority, and technology are worth roughly $10-12 Million, or at the price I, and perhaps you, are investing at today.
When investing my hard earned capital, I first look for how far I can fall. In the case of Fancy, I think the downside is from “curbside level.” And the upside is completely open ended and why I love this risk reward. I believe the closest public comparable is Etsy. If Greg and team is able to sharpen the product offering, and take full advantage of the embedded historical enthusiastic user base, there is substantial and frankly unlimited upside. In a world where the investing public rarely gets a fair shake and an early look at a real company with a chance to invest alongside seasoned investors, this is that shot.
Actual miles may vary, but in my mind this is a chance to earn multiples of invested capital, and maybe have a bit of fun. The upside-downside calculus is favorable and capital invested at this valuation will give the Fancy team perhaps a year and a half of runway to get the merch dialed in. There’s a good YouTube link on the Fancy site to the view the idea directly from Greg, in his words.
And remember, investing in illiquid private equity is exactly that. Illiquid. Invest accordingly. Should you decide to join the Fancy investor group, good luck to us all
Fancy is a social marketplace founded to seamlessly connect creators, curators, and consumers with extraordinary lifestyle products. Explore home decor, fashion accessories, art, and gadgets.
... and Carlos Slim (billionaire, business magnate), Will Smith, and more. Why? To date, 12M+ people from 135+ countries have come to Fancy to discover, share, and purchase the most interesting, unique, lifestyle products in the world.
Since our inception, we’ve grown rapidly to carve out a unique space—providing a destination to discover a curated collection of the most interesting and socially-relevant products in the world.
There is demand to discover unique premium lifestyle products — yet there is no platform to do this.
The market opportunity is huge, with Fancy already positioned as one of the top players in the global lifestyle goods market.
At $374 million in 2020... expected to grow to $476 million in 2024.
With 10+ years in operation, we know our model works — and we’re only going upwards from here. Our end goal is a liquidity event within the next 3-5 years.
We’ve created a clear path for growth in 2020 and beyond. Here’s what your funding will help us achieve:
Help us power social-driven discovery through engaging user experiences and high-quality lifestyle images.
Fancy has financial statements ending December 31 2019. Our cash in hand is $450,000, as of May 2020. Over the three months prior, revenues averaged $200,000/month, cost of goods sold has averaged $150,000/month, and operational expenses have averaged $150,000/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 are the "Anti-Amazon."
Users come to Fancy to discover and shop extraordinary products from purpose-driven brands across the world.
A purpose-driven brand is motivated by their core mission. They exist to meet a need in society, and that purpose informs the brand's vision, mission, story, visual identity, and decision-making.
Consumers are no longer investing their time and money in commoditized products. They want to buy from companies that stand for a purpose.
Driven by the increase in consumer demand for purpose-and our unique market position as the "anti-Amazon" we forecast rapid growth with gross sales of $2B+. This positioning us well for a substantial liquidity event.
Thing Daemon, Inc. was incorporated in the State of Delaware in March 2010.
Since then, we have:
Historical Results of Operations
Liquidity & Capital Resources
Since 2018, the company has been financed with $100,000 in debt, $7,122,247 in equity, and $600,000 in convertibles. To date, the company has been financed with about $90M.
After the conclusion of this Offering, should we hit our minimum funding target, our projected runway is 24 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 in 12 months. 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
Thing Daemon, Inc. cash in hand is $450,000, as of May 2020. Over the last three months, revenues have averaged $200,000/month, cost of goods sold has averaged $150,000/month, and operational expenses have averaged $150,000/month, for an average burn rate of $100,000 per month. Our intent is to be profitable in 14 months.
Since the start of 2020, our monthly expenses have reduced by ~50-75% while our gross margins have increased by ~25-50%. We have seen a reduction in overall Gross Sales, but a small increase in cash from operations.
We expect (but cannot guarantee) to see a continued rise in revenues and a minimal rise in expenses. As our business is highly seasonal, we forecast 7-10% MoM growth through October and then 25% MoM growth through the end of 2020.
We are a revenue-generating company and can access capital through normal operations. We also have a very supportive investor base and board of directors who have access to significant capital if needed.
While this isn't necessarily a predictor of future success, to this point, COVID related closures and restrictions have helped accelerate a shift in customer behavior and preference to online. We have seen an increase in adoption in brands and retailers of our platform and an increase in sales.
Our success depends, in part, on our ability to attract additional consumers who have historically purchased products through traditional retailers rather than online. Furthermore, we may have to incur significantly higher and more sustained advertising and promotional expenditures or offer more incentives than we currently anticipate in order to attract additional online consumers to the Fancy marketplace.
The Company may never receive a future equity financing or elect to convert the Securities upon such future financing. In addition, the Company may never undergo a liquidity event such as a sale of the Company or an IPO. If neither the conversion of the Securities nor a liquidity event occurs, the Purchasers could be left holding the Securities in perpetuity. The Securities have numerous transfer restrictions and will likely be highly illiquid, with no secondary market on which to sell them. The Securities are not equity interests, have no ownership rights, have no rights to the Company’s assets or profits and have no voting rights or ability to direct the Company or its actions.
Our future success depends on the efforts of a small management team. The loss of services of the members of the management team may have an adverse effect on the company. There can be no assurance that we will be successful in attracting and retaining other personnel we require to successfully grow our business.
We may not be able to generate sufficient revenue to be profitable or to generate positive cash flow on a sustained basis, and our revenue growth rate may decline. We cannot assure you that we will generate sufficient revenue to offset the cost of maintaining our platform and maintaining and growing our business.
We have experienced losses in the past, and we may experience losses in the future. Our ability to generate and sustain significant additional revenues or achieve profitability will depend on, among other things, our ability to increase our levels of sales and attract consumers cost-effectively.
If our brands and retailers fail to anticipate, identify, and respond quickly to new and changing trends in consumer preferences, our business could be harmed. The apparel, footwear, and accessories available on our Marketplaces are subject to rapidly changing trends and constantly evolving consumer tastes and demands. Our success is dependent on the ability of our retailers and brands to anticipate, identify and respond to the latest trends and consumer demands and to translate such trends and demands into product offerings in a timely manner.
We rely on information technologies and systems to operate our business and maintain our competitiveness, and any failure to invest in and adapt to technological developments and industry trends could harm our business.
Our efforts to acquire or retain consumers may not be successful, which could prevent us from maintaining or increasing our sales. If we do not promote and sustain our brand and platform through marketing and other tools, we may fail to build and maintain the critical mass of consumers required to increase our sales.
Any significant disruption in service on our websites or apps or in our computer systems, some of which are currently hosted by third-party providers, could damage our reputation and result in a loss of consumers, which would harm our business and results of operations.
The long term implications of COVID-19 are unknown both globally as as they pertain to our business. Consumer habits may adjust or consumers may have fewer funds to spend on our business.
Nora Murphy is a part-time officer. As such, it is likely that the company will not make the same progress as it would if that were not the case.
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