# Update on Our Capital Raise-Coming Soon!! | Ghost Flower - Canonical URL: https://wefunder.com/feed/146109 - Entity ID: wefunder:feed_item:146109 - Published at: 2021-07-08 21:36:41 UTC - Updated at: 2025-07-09 03:20:25 UTC ## Author Robert Peebler ## Subject Ghost Flower ## Content We are excited to announce that after a two-month delay, we are preparing for our follow-on capital raise this month and look forward to sharing our new plans with our shareholders.The delay was caused by a strong market disruption this April when Apple implemented their IOS privacy upgrade.  95-97% of people have opted out of being tracked which has strongly impacted our ability to reach new customers and reduced our Facebook ad effectiveness. The IOS change is negatively affecting all online businesses, but as Ghost Flower is 100% online and highly dependent on Facebook ads, we knew we needed to pause and rethink our business approach.  We did not want to raise additional funds until we had confidence that we had a path forward that we had reasonable chance of success.  We have developed a new omnichannel strategy that we believe has the promise to reduce our heavy dependence on Facebook ads and in the longer term grow even faster than our original plans.  Looking back on 2020, Covid had it challenges, especially with delays in Ghost Flower’s manufacturing, but we made adjustments as needed and ended up growing a remarkable 300% YOY. It was a distinct advantage to be 100% online while many small businesses struggled to survive if they were more centered on their own physical stores or wholesale agreements to store retailers. We entered 2021 with record holiday sales, selling out of our most popular items and needed an additional manufacturing run in early 2021 to restock. We realized we needed to raise additional capital to meet our growing demand and to start the design process for our first experiential retail store.  As we approached May, we had completed nearly all the steps to launch our raise in early June when the effects of the Apple market disruption began to hit us in a big way. Our return on ad spend (ROAS) plummeted and the cost to convert an ad to a sale ended up being more than the revenues generated, which is an unsustainable approach.  In the short term, we have leaned heavily on emails to our installed base with targeted sales to help boost sales. This short-term pivot allowed us to continue to grow revenues YOY such that June this year compared to last year was up 220%, with 48.6% of purchases from our existing customers. We also ended up 250% YOY for the first six months of 2021. We have leaned heavily on discounts and sales to our installed customer base to move inventory, but it is not a long-term sustainable model. The Apple IOS disruption has accelerated the planning of our omnichannel strategy in which we are much less dependent on Facebook/Instagram.  The following is our new plan forward:Start the process of having our own physical store, beginning with a popup this holiday season, likely in Los Angeles. We have market data that suggests that 68% of activewear shoppers prefer to buy in stores where they can browse and try things on. For example, Lululemon continued to open physical stores during the pandemic getting ready for the surge back which is now happening.Design and plan for additional Ghost Flower experiential retail stores that will expand Ghost Flower significantly into the health and wellness arena.  Create a targeted affiliation program leveraging a state of art platform that helps us find and manage affiliates such as bloggers, influencers, cross promotion programs, etc.  Rebalance ad spend away from Facebook/Instagram and towards Google ads, YouTube and other online advertising resources. Refine our messaging to better target our most promising customers with the new tag line, “Wellness You Can Wear.” (See our new landing page, www.ghostflower.com.)Continue to improve our direct to customer emails to engage and promote more repeat purchase.Reduce our manufacturing and inventory costs by reducing the number of SKUs (number of items we carry) and searching for less expensive materials while not degrading our quality. In the very short-term we are also focused on conserving cash. We have cut our marketing expenses by nearly 50% and are scrubbing other expenses to extend our runway until we can raise new working capital. With the reduction in marketing spend, we do expect to see a short term slow-down in our revenues, but this should turn around once we have implemented our plan including a new pop-up, diversified marketing ad campaigns and a new collection ready for our peak fall/winter holiday season.  In summary, we have made significant progress on multiple fronts but disappointedly a force beyond our control has threatened the company. We are pivoting with an omnichannel approach that we believe will put the company in a much stronger position and likely will result in us growing faster than originally planned, assuming we can raise the needed capital to support our pivot plans. We hope to raise at least $300K on this raise and look to our current shareholders as our best group to support us. We are planning a significant early bird discount limited to our current shareholders for the first week before we open it up to everyone.   More to come soon!