|1||Invest today and become an owner in the FIRST crowdsourced hotel fund management company.|
|2||Founders have managed over $2.6 billion of hotel real estate.|
|3||We are launching a new hotel brand. A brand curated with you.|
|4||We will launch two $50 million lifestyle hotel funds and many $1 million hotel investments in 2021.|
|5||A new wave of hotel loyalty. Up to 25% reduced room costs, resulting in improved profitability.|
|6||Invest and earn your share of profits with fees from hotels under management and owning the brand.|
|7||Be part of the hospitality revolution PLUS owners get early access to invest in our managed hotels.|
|8||Investments over $1,000 receive perks including room upgrades and discounted food & beverage.|
In an ever changing hospitality landscape riddled with climbing construction costs and dilutive brands, survival of the fittest will come down to the quality of the team steering the wheel and its ability to think both as an operator and an owner. Nathan Kivi has assembled a top of the line team to execute on his strategy while enabling individuals, like me, to invest in an otherwise unbroachable industry - hospitality! My love for the hotel space coupled with my admiration for Nathan's cunning mind and unique approach to hotel investments makes this the first opportunity of its kind, and the easiest to lean into.
HotelierCo was originally a concept developed by the CEO while running a large hospitality fund in Australia and working with a large hotel brand company in the United States.
There were three key developments that would enhance the hospitality space:
In 2015, with the passing of Regulation A+ crowdfunding, all of these could finally happen.
The first key driver for success was having partners with exceptional hotel operation capabilities.
Valor Hospitality is a hotel management company with operations in the United States, United Kingdom, South Africa, Dubai and Hong Kong. Valor are approved operators for all major brands (including Marriott, Hilton, IHG and Red Lion) as well as operate all types of hotels from luxury and upscale assets to mid-tier properties.
Valor recognized the opportunity in aligning with HotelierCo to open an institutional product for the public as well as a unique way to grow HotelierCo and Valor’s business through joint effort. We are excited to have this relationship with Valor and grow similar opportunities with other like-minded companies.
The second key driver for success, a great operation requires a great technology platform.
Wefunder is an exceptional company in the crowdfunding technology space.
HotelierCo wanted to use their forward-thinking approach on investments with a focus on loyalty from the crowd. Wefunder provides the technology capability for members to invest, monitor and track their returns.
We didn't stop there! With these partnerships investing in hospitality assets isn't the only opportunity. We are now providing the opportunity to invest in the HotelierCo business.
Part of our journey was also determining how to give investors a feel for market in an easily digested video form - a day in the life of a guest. We wanted to find a way to show demand drivers to those with limited time.
Meet our Cape May development:
The final stage for HotelierCo was developing a suitable fund structure for investment and finding a concept that would be ideal for newly acquired assets.
We have found several hospitality companies that love the concept and capital resource this would provide to grow their platform in a new and exciting way.
HotelierCo will put out its first three funds broken into regional United States markets:
We anticipate the first two funds, East Coast and Central United States, to launch in late 2020 with each of the funds focused on $50 million worth of equity. These funds will be separate investments than in the Company itself, allowing investors to diversify across both the management company and underlying assets.
With a database of current hotel owners, travel junkies, and loyalty members we are reaching groups already interested, engaged and hopeful in hospitality and entrepreneurship that aspire to become a first time hotel owner or a tycoon in the hospitality industry.
We are excited about the concept of a partnership between the public, fund management company, hotel management company and technology platform. We believe this is the key for change in hotel investment.
We are excited to have you on board!
HotelierCo has financial statements ending October 6 2020. Our cash in hand is $5,250, as of October 2020. Over the three months prior, revenues averaged $0/month, cost of goods sold has averaged $0/month, and operational expenses have averaged $2,500/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 a hotel fund management and development company. We find hotel deals and utilize equity crowdfunding laws to open the investments beyond the institutional market.
We believe we have several avenues for growth. We believe HotelierCo should be global. Through solid partnerships, we intend to grow the footprint globally. Once our investor base has scale, we will have a new avenue for brand creation, owned by the members for this investment!
Given the Company’s limited operating history, the Company cannot reliably estimate how much revenue it will receive in the future, if any.
HotelierCo Retail LLC was incorporated in the State of Delaware in September 2020.
HotelierCo Retail LLC is a fund/development manager for hotel assets. The entities being formed for assets HCo Central US Fund 01 LLC’ and ‘HCo East Coast US Fund 01 LLC’ plus further entities will own the actual hotel assets. HotelierCo Retail LLC will be the fund manager of these assets. The hotel asset entities will have liabilities in the form of fees payable to HotelierCo Retail LLC. HotelierCo Retail LLC will have assets in the form of management contracts as well as the voting shares of the hotel asset entities.
This raise is being done for HotelierCo Retail LLC, and all funds raised in this campaign will go towards the operations of that entity.
“Investment company” means any issuer which (i) is or holds itself out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting, or trading in securities or (ii) is engaged or proposes to engage in the business of investing, reinvesting, owning, holding, or trading in securities, and owns or proposes to acquire investment securities having a value exceeding 40 per centum of the value of such issuer’s total assets (exclusive of Government securities and cash items) on an unconsolidated basis.
Purchasing real estate is generally not considered a “security.” HotelierCo Retail LLC is not an investment company.
HotelierCo Enterprises LLC is the owning entity for HotelierCo Retail LLC which is owned 50/50 between Natalie Stone and Nathan Kivi.
Since then, we have:
Historical Results of Operations
Our company was organized in September 2020 and has limited operations upon which prospective investors may base an evaluation of its performance.
Liquidity & Capital Resources
To date, we've been funded with $67,500 in contributed capital.
After the conclusion of this Offering, should we hit our minimum funding target, our projected runway is 6 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
HotelierCo Retail LLC cash in hand is $5,250, as of October 2020. Over the last three months, revenues have averaged $0/month, cost of goods sold has averaged $0/month, and operational expenses have averaged $2,500/month, for an average burn rate of $2,500 per month. Our intent is to be profitable in 24 months.
We have finalized the documentation required to submit a $50.0 million Regulation A+ US Central Fund to the SEC. If these two funds are fully invested they would provide $2.5 million a year in revenue for HotelierCo, as the Offering Circular allows for debt to be used, and we intend to run a LTV of 50%. $100 million of equity at an LTV of 50% would mean $100 million of debt. On acquisition this would provide an asset valuation of $200 million. The fund management fees are 1.25% of assets under management. $200 million of assets under management therefore provide $2.5 million per year in fund management fees.
The expenses shall evolve/increase over the next 3-6 months to prepare to set up and operate the first two $50.0 million Regulation A+ raises to build a lifestyle hotel fund in Central and East Coast of the United States. The expenses for these shall occur in the next 3-6 months, with the revenue from these not anticipated to flow through for 9-12 months.
Initial capital funding for HotelierCo LLC (initial entity) was $412,000 from Valor Hospitality - of this around $200,000 was invested in the Cape May development which ceased operation due to COVID-19, with 100% of investor funds returned. The founder also put in $200,000 of funding.
Natalie Stone and Nathan Kivi have put in $75,000 to acquire the assets of HotelierCo and have some working capital to get through the raise on Wefunder. Should additional capital be required they are prepared to add further capital to the company. Very little funding is needed for this entity to begin operating, but we anticipate our first fund will need to raise a minimum of $3M via the Reg A+ in order to begin purchasing.
The hospitality industry is cyclical and a worsening of global economic conditions or low levels of economic growth could adversely affect the Company’s revenues and profitability as well as cause a decline in or limitation of the Company’s future growth.
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.
Macroeconomic and other factors beyond the Company’s control can adversely affect and reduce demand for its services.
The Company’s hotels will be reliant upon technology and the disruption or malfunction in the Company’s information systems could adversely affect the Company’s business.
The Company is reliant on third party technology providers while in the initial growth phases. Loss of providers or increases in technology costs could adversely affect the Company's business.
The Company may lose business by failing to compete effectively and/or because of negative social media.
The Company is subject to risks related to cybersecurity. These risks can be insured and mitigated, but can still have a negative impact to the Company's business if a breach occurs.
The Company is a newly formed entity and has a limited operating history. Until the Company has sufficient revenue it will be operating at a loss.
The Company may incur debt (including secured debt) in the future and in the continuing operations of its business. Complying with obligations under such indebtedness may have a material adverse effect on the Company and on your investment.
The Company’s operating and other expenses could increase without a corresponding increase in revenues, which could have a material adverse effect on the Company’s financial results and on your investment. Factors which could increase operating and other expenses include, but are not limited to (1) increases in the rate of inflation, (2) increases in taxes and other statutory charges, (3) changes in laws, regulations or government policies which increase the costs of compliance with such laws, regulations or policies, (4) significant increases in insurance premiums, and (5) increases in borrowing costs.
The Company believes that increasing, maintaining and enhancing awareness of the Company's brand is critical to achieving widespread acceptance and success of the Company's business. Successfully promoting and positioning the Company and hotels under management will depend largely on the effectiveness of the Company's marketing efforts. Maintaining and enhancing the Company's brand awareness may require the Company to spend increasing amounts of money on, and devote greater resources to, advertising, marketing and other brand-building efforts, and these investments may not be successful. Further, even if these efforts are successful, they may not be cost-effective. If the Company is unable to continuously maintain and enhance the Company's brand, the Company's market may decrease and the Company may fail to attract customers, which could in turn result in lost revenues and adversely affect the Company's business and financial results.
The Company, like any business, is exposed to the risk of hotel employee or contractor fraud or other misconduct. Misconduct by hotel employees or contractors could include intentional failures to comply with laws or regulations, provide accurate information to regulators, comply with applicable standards, report financial information or data accurately or disclose unauthorized activities to the Company. In particular, sales, marketing and business arrangements are subject to extensive laws and regulations intended to prevent fraud, misconduct, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements. Employee misconduct could also involve improper or illegal activities which could result in regulatory sanctions and harm to the Company's reputation.
Valuation and revenue / cost projections are based on continual registration of Regulation A+ raises and finding sufficient projects to maintain in the pipeline. If these funds are not able to be continually raised this may have a negative impact to the valuation of the Company.
COVID-19 poses a risk to the hotel industry and economy at large. While we believe it also presents an opportunity for strategic investment, it's impact is unpredictable and may have material impacts on our business.
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