|1||CEO is 3X Founder, 2 exits. Lead investors @previous venture are also Rad's lead investors|
|2||Over $1.1m raised from professional investors Dzhel Ventures & Expert Dojo|
|3||300% revenue growth from Q1-Q2, 1000% user growth from Q1-Q2, Grew from 4 to 16 clients in 2020|
|4||Expierenced management; the RAD founding team has 5 exits in digital media and marketing|
|5||Recurring model, 16+ customers including CitizenNet (Conde' Nast), Noovie, Ranker, Spin.com & SMBs|
|6||SMB renewal rate >80%, annual customer value =$900O, new customer acquisition (CAC) = $450|
|7||Microsoft backed, accepted in January 2020 to the MSFT for startups program|
Our founder & CEO, Jeremy Barnett had a crazy idea after exiting Trendy Butler in late 2017. So he assembled a management team that has already gone to war together! A management team that consists of four (4) former CEO/founder types, three (3) investors from previous ventures, two (2) oddly cool developers, one (1) Serbian track star and two (2) operations specialists!
We faced this ourselves — our founding team has collectively built 9 online businesses (crazy, we know...) using a combination of Facebook and Influencer marketing. Oddly, we all suffered from the exact same advertising problems while building these businesses. Firstly, all of us were overly dependant on Facebook to acquire new customers. Moreover, influencer marketing had become way too expensive and is fundamentally broken.
Back in late 2017, co-founder Mark Decastro and 3 engineers tested the idea of allowing brands to distribute already made digital content (blogs, videos, and articles) across real social media user feeds. The idea was to pay real social media influencers (small, medium, and large) to share already made content with their audience. Our hypothesis was that brands would benefit exponentially by using the network effect of real social media users to distribute already made content.
Lots of pizza and sleeping at the office were required for this vision to become reality and get our product live!
RAD (our product) is simple, effective and easy to use. The most important thing we built into our product is full transparency which empowers our clients to really understand each dollar spent.
With Covid-19, the influencer marketing space was flipped upside down on its head. The world has changed into a virtual environment leaving tons of influencers without work and pay. The RAD platform enables small and medium sized influencers to make side income each month without having to create any new content. This is a lucky twist of fate -- right place, right time. And we siezed the moment!
Not only did it work, but we crushed expectations. We tested in Latin America and improved our clients user base by 300%. We've got something special folks!
RAD's CEO and Founder Jeremy Barnett made it his mission to tell the world about everything that is wrong with influencer marketing. We started in our back yard by educating the leaders of tomorrow at USC Marshall's top-ranked MBA program.
Below is a snippet of one of our super fun shows where Marco and I typically interview the best in the game about influencer marketing. In the below snippet, Marco talk about why RAD is RAD for small and medium sized businesses. We've been getting the word out and setup a You Tube channel
In September of 2019, we produced our first marketing video made for acquiring users onto our platform. Since Rad Influencer is a marketplace, we needed 1000's of users to ensure we'd be able to deliver meaningful results for advertisers.
Our first user acquisition video for Rad Influencer.
It's always good to sprinkle a little Microsoft into any startup growth plan. After 6 months and two dozen phone calls..... RAD got approved for the Microsoft for Startups program. Big thanks to Huaxin Gong (RAD's secret ninja) and Mr. Dean Jones of Microsoft for working with us to get this done.
The Covid-19 pandemic has affected humanity in ways we can't yet comprehend. I’m proud to say our RAD team has never been more unified. Furthermore, our platform has proven to be a source of stability for advertisers and users during this challenging time. Even with so much turmoil, RAD is growing like crazy! We are one of the companies breaking through and don't intend on ever looking back.
Below are some quick clips from some of our early professional investors.
The need for easy to understand digital advertising solutions have never been greater. Today, online advertisers use over-crowded and complex social media channels like influencer marketing, Facebook and Instagram to drive website visits. A new virtual economy shows online usage has increased by 70% across the world and people are spending 35% more money online each month -- The opportunity is now!
New activations with Citizen Net, a Conde’ Nast company, Spin.com, and Noovie demonstrate product adoption as larger brands are starting to shift budget to Rad's platform. As we continue to get momentum, we've also identifed a need with small & medium sized businesses. Specifically, 9 out of our 16 clients represent this client type. Revenue will grow 300% in the second quarter (April, May and June) of 2020. Our client base has grown from 4 to 16 clients since Jan 1st, 2020. We expect to continue growing as we move through the second quarter with several new activations and renewals.
Clients are renewing and new campaigns are getting activated weekly. We've identified a specific need for RAD with small and medium sized businesses. We have lots of work to do and opportunity is knocking. For this reason, 40% of the funds raised will be spent on the following technology upgrades. The market we are going after is absolutely huge. Over $120 billion dollars each year gets spent on digital advertising, just in the United States.
The world is changing. Uncertainty is a sentiment across several sectors. Despite these unprecedented times, digital media and advertising has never been stronger. We expect continued sector growth and have positioned RAD to be the gold standard for automated influencer marketing.
The funds raised on Wefunder will be used to create media buying tools for online advertisers using RAD. Building into the Shopify marketplace and continued API integrations with Facebook and Instagram will require additional development resources to properly deploy. Lastly, investing resources into the sales automation of small and medium sized advertisers will further demonstrate a scalable business model.
Rad Intelligence has financial statements ending December 31 2019. Our cash in hand is $300,000, as of May 2020. Over the three months prior, revenues averaged $7,457/month, cost of goods sold has averaged $7,667/month, and operational expenses have averaged $41,098/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.
Over $50B yearly gets spent on the creation of digital content and most of it is never viewed. Rad is the first content distribution marketplace that uses the network effect of real social media users to solve this problem. Similar to Google Adwords, advertisers set the price and budget for digital content (blogs, videos or product pages) and pay only for the unique clicks generated from each placement.
We hope Rad Intelligence is set to be the leader in already made digital content distribution. Over $50b gets spent by online advertisers each year on the creation of new digital content. Spending on Influencer Marketing has also grown from 4.5b to almost $10b dollars a year since 2017.
Rad Technologies Inc. was incorporated in the State of Delaware in October 2018.
Since then, we have:
Historical Results of Operations
Our company was organized in October 2018 and has limited operations upon which prospective investors may base an evaluation of its performance.
Liquidity & Capital Resources
To-date, the company has been financed with $310,000 in debt, $272,000 in equity, $500,000 in convertibles, and $100,000 in SAFEs.
After the conclusion of this Offering, should we hit our minimum funding target, our projected runway is 18 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
Rad Technologies Inc. cash in hand is $300,000, as of May 2020. Over the last three months, revenues have averaged $7,457/month, cost of goods sold has averaged $7,667/month, and operational expenses have averaged $41,098/month, for an average burn rate of $41,308 per month. Our intent is to be profitable in 15 months.
Most recently, we've closed several meaningful deals and gotten SBA EIDL loan funding. Both of the events have stabilized our cash flow position and improved our burn rate.
Q2, 2020 - revenues we expect (but can't guarantee): $127,000
Q3, 2020 - revenues we expect (but can't guarantee): $349,000
Expenses - Current burn rate is $40,000/mo which we expect will stay steady of the next 6 months. As we grow revenue, we are investing back into the company.
If needed, the founder and two partners have liquidity if/when the company needs financial support. We are hoping to raise $1,500,000 total in this round (including Reg D and Reg CF).
Securing executives and top tiered development talent is challenging against better funded competitors
Organic reach is constantly changing on social platforms which can reduce campaign efficacy.
API integrations for channel partners like Facebook and Instagram can change to our detriment.
Covid-19 reduces early adopters threshold to activate new marketing innovation and test budgets.
Covid-19 takes longer for the US economy to recover than expected thus causing extended pauses in new client activations.
Company clients / partners go out of business and don't pay their invoice and/or aging accounts receivable.
A better funded competitor beats us to the punch and grabs posistion, clients and market share.
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.
Marco Hansell 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.
Aaron Kuntz 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.
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.
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