# Team Topia Exceptional Team & League Management Platform—Expanding to Serve Every Sport ## Elevator pitch Team Topia is a platform that makes running sports teams, leagues, and competitions ridiculously easy. We’re focused on solving the challenges of all the “niche” sports including timed sports like swimming, track, cross country and skiing and judged sports like diving, gymnastics, and cheerleading. These are sports that are largely ignored and underserved by existing solutions, yet they make up a majority of the global sports software market. - Canonical URL: https://wefunder.com/team-topia - Entity ID: wefunder:company:93516 - Last updated: 2026-06-22T05:03:23Z - Generated at: 2026-06-22T08:42:33Z ## Quick facts - 🏆 #1 Online Platform for US Summer/Rec Swim Teams - 💰 1,800+ Customers and $1 Million+ Annual Revenue Run Rate - 🚀 With only $630K in Funding, Launched 3 Products & Acquired a Competitor - 📈 Insanely Low Churn: Less than 2% per Year - ❤️ Customers Love Us: 4.8/5 App Store Ratings, +74 Net Promoter Score, 85%+ Trial Conversion - ⭐️ Management Team Includes Former Tech Leader of World-Renowned Design Firm and a 3-Time Olympian ## Active fundraises - wefunder:fundraise:49000: 4(a)(6) successful (USD) - wefunder:fundraise:50905: 4(a)(6) successful (USD) ## Story Team Topia creates software to manage sports leagues, teams, and competitions. Our flagship product, SwimTopia, is the #1 online platform for US Summer/Rec swim teams with over 1,800 customers and on-track to generate over $1 million in revenue in 2021.While we have started with a focus on the swimming market, our ambitions have always been much bigger—to serve a very wide range of sports and activities. By starting with swimming and diving, we are well-positioned to create a robust and extensible platform to support the hundreds of “niche” sports that collectively make up a majority of the global $5 billion sports software market.We are raising investment via Wefunder to expand into new markets. With the funds raised we expect to (1) significantly expand our foothold in the year-round/club and international swim market segments, (2) gain meaningful traction in additional sports, (3) more than double our revenue, and (4) raise a Series A investment round, converting notes raised in this campaign to equity, within the next two years.*Have questions about the investment terms?Please see this answer explaining the details in the "Ask a Question" section of this site.TRACTION & TRACK RECORDTeam Topia has a history of being extremely capital efficient and creating tremendous value for customers with a surprisingly small team and few resources.By 2019, with just $630K in funding, Team Topia had successfully launched 3 products and acquired a competitor. Team Topia provides a complete end-to-end solution for competitive swim teams including:SwimTopia – Web-based team management with a dizzying array of features, including online registration to join a team, volunteer commitment tracking, simple drag & drop website updates, and email and push notifications. Plus features specific to event-based sports like per-athlete event entries and automated relay selections. SwimTopia also provides a host of features that ease management of whole leagues, a capability that has encouraged dozens of swim leagues to adopt SwimTopia for all their member teams.Meet Maestro – Our revolutionary software to run swim meets is exceptionally intuitive and efficient. It is meant to run on the pool deck and integrates with various timing systems to collect times and DQs to score events and generate awards and other reports. It replaces archaic software that has been the dominant solution for swim meet management since the 1990’s. While we still have work to do to fully replace the incumbent solution, we’ve been thrilled by how quickly teams and leagues have been switching to—and loving—Meet Maestro. SwimTopia Mobile – Our parent-focused companion mobile app provides easy access to team calendars, volunteer commitments, and complete swim histories for their kids. With push notification alerts, our mobile app is a vital communication tool for teams to notify parents of practice cancellations or meet delays. On meet days, our unique Live Bar feature broadcasts the current event and heat to keep meets running smoothly and to help parents avoid missing their kid’s races. With a premium Pro subscription, mobile app users can unlock full heat sheets, live meet results and scores, and proactive upcoming event reminders so they’ll never miss a swim again.All the products in our portfolio complement each other, thus encouraging users of one product to adopt the other products to maximize the value they receive from our platform. This encourages “network effects,” where it is more convenient for teams using our software if other teams they compete with also use Team Topia software. This dynamic encourages positive word-of-mouth and viral spread of our products, as our customers encourage more and more teams to try our software.A word-of-mouth strategy will only be effective if customers are overwhelmingly satisfied with the products and services being delivered. As a company, we are intently focused on delivering high quality products and excellent customer service. By every measure, Team Topia has very, very happy customers.The satisfaction of our customers is evidenced by the very high ratings of our products on mobile app stores and major app review sites, typically 4.8/5 or better and consistently higher than the ratings of our competitors.Happy customers are also loyal customers. As a result, we enjoy an insanely low level of churn for a SaaS product, averaging less than 2% per year. Once a team or league signs up for our service, it is exceedingly rare for them to cancel, and rarer still for them to switch to a competitor. Of the few teams who have switched to a competitor, several later returned to become our customers again. In fact, 100% of customers who joined in our first two years of operation are still Team Topia customers today.Team Topia has a track record of consistently strong growth, averaging over 50% per year since inception, prior to the COVID-19 pandemic in 2020.The COVID-19 pandemic caused the vast majority of swim teams and leagues to cancel their seasons in 2020. As a result, Team Topia's revenues were down significantly from 2019. During that challenging time, we focused on adding features to support virtual swim meets (meets conducted at multiple pools and/or different times) and disseminating information to help our customers safely conduct practices and meets. Fortunately, by the 2021 season, most–but not all–teams and leagues had resumed competition. While participation was still down relative to 2019, through a combination of added customers and increased usage of our products, year-to-date revenue through September 2021 ($887K) has already surpassed the total revenue for all of 2019, and is on track to exceed $1 million this year.MASSIVE OPPORTUNITY FOR GROWTHThere is huge potential for Team Topia to grow in two distinct stages: (1) expanding our existing foothold in the year-round/club and international swimming markets and (2) extending from that base to serve many additional sports, most notably timed sports like track and field and cross-country running, and judged sports like gymnastics and cheerleading.The US Swimming & Diving market is divided into 3 main market segments:Summer/Recreational – comprising roughly 75% of the market with an estimated 2 million participants, these are neighborhood, municipal, and country club swim programs typically for kids ages 5–18 and hosting meets between May and July. SwimTopia is currently the #1 online platform for this market segment.High School & Middle School – these are school-affiliated teams with some 300 thousand swimmers and divers in the US. SwimTopia has significant traction in this market segment, but also plenty of room to grow. Year-Round/Club – these teams attract the most serious athletes, typically ages 7–18 and who compete in one or two meets per month, all year long. These teams are usually affiliated with USA Swimming and are frequently coach-run, for-profit businesses. Because these teams operate year-round and have more demanding feature requirements, they are willing to pay higher SaaS subscription rates. Additionally, the high transaction volume makes transaction fees a major revenue stream for this segment. Because we don’t yet provide the billing and invoicing features needed by most of these teams, Team Topia does not yet market to this segment and currently has a handful of year-round swim team customers.By developing features to cater to the year-round/club segment, and selling and marketing to these teams, Team Topia has the near-term potential to more than double its revenue. We regularly field inbound requests from year-round/club teams disappointed with existing team management systems and who are looking for a better alternative. Given the pent-up demand in this segment, we expect to roll up market share rapidly once we start marketing and selling to these teams.While the opportunity exists to grow by much more than 10x just within the swim & dive market, a much bigger opportunity lies in expanding to support the hundreds of “niche” sports that make up a majority of the $5 billion per year global sports software market. The global sports software market is big, fragmented, and filled with competitors. However, nearly all the attention is focused on the biggest four sports: basketball, baseball, soccer, and football. These four sports make up about one-third of the overall sports software market. The remaining two-thirds is filled with dozens and dozens of smaller sports and activities—most of which have needs that are very different from those of the biggest sports. Because these needs are largely unmet, the majority of the global software market is not well-served by existing solutions, creating a huge opportunity for a company that can address the neglected needs of these organizations.We expect our rate of growth to accelerate as we expand into additional markets. Expanding to the year-round swim market segment and additional sports should significantly reduce the effects of seasonality on our business. Additionally, network effects, when a customer derives more value as they and the teams they interact with use more Team Topia products, should continue to drive usage and adoption in existing markets. Our goals are to (1) more than double revenue within 24 months to $2M+, and (2) to surpass $10M in annual revenue within 5 years.*OUR TEAMWe have an exceptionally capable and experienced management team. Every member of our management team has prior experience founding and/or running a business. Our Founder and CEO, Mason Hale, was previously the Chief Technologist of world-renowned design firm, Frog Design. During his eight years at Frog, Mason led the global digital technology group which spanned nine studios and created web, mobile, desktop and embedded software applications for clients including Microsoft, T-Mobile, Disney, General Electric, Dell, SAP, and many others. Elli Overton, our Director of Sales and Marketing, was a 3-time Olympic swimmer for Australia. She was team captain for the UC Berkeley women’s swim team while completing her business degree at the Haas School of Business. Elli worked in the nonprofit world, helping to raise millions of dollars for cancer survivors, before returning to her swimming roots and opening her own swim instruction business. She is the author of Jay's Swimming Journey, a children's book for young swimmers.Team Topia is very fortunate to have the support of a stellar group of investors and advisors.Team Topia is guided by an outstanding Board of Directors.Gordon Daugherty – Gordon is the co-founder and President of Capital Factory, the most active early stage investor and the center of gravity for entrepreneurs in Texas.Bryan Jones – A seasoned entrepreneur and startup executive, Bryan is also a former captain of the national champion University of Texas men’s swim team, and a former world and American record-holder.Mark Metz – Mark is a serial-entrepreneur with 3 previous nine-figure exits. Mark is a strong supporter of the Atlanta business community and founder of the 22TechPark startup incubator. Mark was also 2-time Southern Conference swimmer of the year and an Olympic Trials qualifier.Mason Hale – Our founder and CEO.By participating in this campaign, you too can join the ranks of these exceptional Team Topia investors and advisors.SUMMARYThe funds raised via this campaign will be used primarily to grow our product development team, enabling us to update our 3 products more quickly and efficiently. As we launch into new markets, a significant portion of the funds is earmarked for sales and marketing efforts.The investment raised by this crowdfunding campaign will enable us to more quickly expand our existing foothold in the year-round/club and international swimming market segments and to take our first meaningful steps to serve additional sports. With the expected resulting boost in growth and revenue, and with proven traction beyond swimming, we will be well-positioned to raise a Series A round of $5 million+ to aggressively pursue our multi-sport Team Topia strategy.*There are a wide range of potential exit opportunities, including acquisition or a public offering. Please be advised that investors should expect to wait several years before a liquidity event. We are simultaneously committed to delivering an exceptional return to our investors, serving the needs of our customers, and providing for our employees.Investors in this campaign will receive the valuable perks listed above associated with the their level of investment. Perks are cumulative. Higher tiers receive all the perks of lower tiers. We look forward to welcoming many existing Team Topia customers as investors, and we want to show our appreciation for their grassroots support with SwimTopia, Meet Maestro, and Team Topia branded apparel and gear they'll be proud to wear and use.* Projections of future results are not guaranteed. ## FAQ 1. **You list a VP of Engineering but no engineers. Is that just the mgmt team listed or do you outsource your development? If so, what are future plans around outsourcing vs in-house?** - Thanks for the question! Our products are currently built by our VP of Engineering (Chris Bonser) and yours truly, Founder & CEO (Mason Hale), with occasional assistance from contract/outsourced development resources. We don't have any dependencies on outside contractors to make updates or bug fixes to any of our products. Therefore, even though we do utilize contract resources at times, I would not describe our development as "outsourced." An expected immediate benefit of this campaign i... 2. **It's clear that you've been very successful in the swim space. Broadly speaking you plan to expand within swim and to other sports (track, cross-country, etc.) A key success factor within swim seems to be Mason Hale's personal experience as a parent of a kid on a swim team and...** - Thank you for the questions! I'll dig into each one in turn. == Q: Roughly how much growth do you anticipate will come from expansion within swim vs other sports? Is there much more growth available within swim? == Even with the traction we have in the swim market, there is still room to grow more than 10x within the swim market. Our estimation is that the total addressable market for swim team and meet management software is around $25-50M per year in the US and $80-100M per year worldwide. ... 3. **What percentage of clubs are collecting dues/fees through the platform and what is the GMV? What is included in your COGS from your financials?** - Nearly every club collects dues & fees through the Team Topia platform. The only exceptions are generally teams that do not collect any dues, such as school-affiliated teams. This isn't a metric we track, so I cannot provide a precise percentage at this time, but I estimate over 90% of teams on our platform collect dues and fees through our platform. So far, in 2021, we have processed $20,204,967 in registration dues & fees, including merchandise purchased during registration. Of this... 4. **I have read the language in the Convertible Promissory Note for this offering here: https://www.sec.gov/Archives/edgar/data/1798181/000167025421001052/document_4.pdf Naturally, it is full of legalese and I’ve attempted a translation. The note is due Sept 17th, 2024 @ 4% APR. T...** - Thanks for the question. First, I should point out that the note we're using is the default/standard convertible note form provided by the Wefunder platform, which in turn is based on the Cooley GO open source convertible debt financing documents, available from https://www.cooleygo.com/documents/series-seed-notes-financing-package/ We're using very widely used legal documents for this campaign. We didn't create new bespoke convertible note documents and we're certainly not trying to bury any... 5. **When will the conversion of the Convertible Promissory Notes for this offering here perhaps become equity securities or shares or SAFE OR WILL NOT?** - The convertible notes will convert to equity when a Qualified Financing occurs, which is defined as a priced equity round of $1,000,000 or more. Our goal is to raise a Series A round of $5M or more within the next 2 years. While we cannot guarantee hitting the goal, that is our plan. Hitting this goal would be a Qualified Financing that would result in conversion of all notes from this crowdfunding campaign. I should note that while no one generally invests in a convertible note for the inter... ## Team - Mason Hale (Founder & CEO) - Elli Overton (Director, Sales & Marketing) - Chris Bonser (Vice President, Engineering) - Tracy Nelson (Director, Customer Success) ## Recent posts - 💪 Ready to finish strong! (2022-01-21T00:13:59Z) ## Q&A - Q: Hi Mason. I have a number of questions, but this entry box doesn't seem to allow line breaks, so apologies in advance that these questions will come across as a single stream. (1) Why did you fall short of the $1M 2021 revenue goal? (2) How many years of profitability have you had and what was 2021 net income? (3) What exactly is the commercial plan to achieve the $2M revenue goal? And how much of that will come from the existing swimming market vs new markets? (4) What is the cost to acquire a new customer? (5) What is the lifetime value of a customer? (6) You mention an extremely low churn rate. How much of your revenue do you get or foresee getting from expansions within existing account relationships? (7) You mention gross margin has grown from 50% in 2019 to 64% in 2020, which is good, but that seems low for a SaaS business. Any plans to increase this to 75/80+%? (8) What is the go-to-market/sales/commercial strategy to penetrate the new markets you're targeting, like the year-round/club market? (9) If I read correctly, in the past you've used a rev-share arrangement with an outside dev firm where they got 75% of your mobile revenues net app store costs. That seems high. Do you plan to do that again and if so, why share such a large portion of your revenue? (10) You also mention you plan to hire 2-3 devs with the crowdsourcing funds. Will these be FTEs or outsourced? (11) What plans do you have the scale your engineering operations? I can't imagine it can continue being you and Chris Bonser writing code and squashing bugs. (12) What does your product roadmap look like? I'm particularly interested in when you see the availability of those billing and other critical features needed to penetrate the year-round/club market. (13) Any plans to add international language localization? (14) Are your prices too low? Any plans to increase them? (15) Why would NBC/Universal or Dick's Sporting Goods be interested in acquiring a sports management software company? (16) What's in place to ensure the retention of the current management team and are there plans to add additional management talent, particularly on the commercialization and business development side? I know these are many questions and many thanks in advance for your time, patience, and consideration in answering them. - A: > (10) You also mention you plan to hire 2-3 devs with the crowdsourcing funds. Will these be FTEs or outsourced? These will be FTEs. We've actually already made two of the hires, even though the funds from this campaign are still held in escrow. Our new Director of Product, Michael Swanson[1], started last month and Brian Moeskau[2] joined our team as a Principal Engineer, starting today! If anything, in large part due to the success of this campaign, I expect we will hire 2-3 *additional* developers this year, for a total of 4-5 new engineering hires. We are still actively hiring for additional positions. Please see: swimtopia.com/careers [1] linkedin.com/in/mswanson1524 [2] linkedin.com/in/bmoeskau - A: Hi Shardul, thanks for all the questions. I assume you are only asking because you are interested. I will take each of these in turn in a separate reply. - Q: Hello what are Team Topia's plans for 1 year? 3 years? 5 years? Will ever want acquisition (M&A) OR ipo or partial buyout or etc...? - A: We’re focused on building a great business, including an awesome product with an amazing team and strong company culture. We have been very intentional about laying a solid foundation for our future growth. We have several goals we are currently pursuing: 1. Within 24 months: - More than double our annual revenue to $2M+ - Gain meaningful traction beyond the swimming market - Raise a Series A of at least $5 million 2. Within 5 years: - Exceed $10M in annual revenue Future projections cannot be guaranteed. However, we do take the goals we set and the commitments we make very seriously. There are many potential exit opportunities for Team Topia. The sports management software segment is currently a “hot” sector with a lot of M&A activity from larger competitors, private equity firms, giant media companies like NBC/Universal, and huge retailers like Dick’s Sporting Goods. While we would certainly entertain attractive offers, especially in “1+1=3” scenarios where our merging with another company would unlock new potential and capabilities, we are not looking for a quick flip. Eventually, an IPO is a real possibility. Another sports platform, Active Network, went public in 2011 before later being taken private in 2013 by Vista Equity Partners for $1.05 billion. Ironically, it was Active’s archaic swim team management software that originally inspired me to start Team Topia in the first place. Completing that circle by taking Team Topia public would be gratifyingly poetic, indeed. - Q: What percentage of clubs are collecting dues/fees through the platform and what is the GMV? What is included in your COGS from your financials? - A: Nearly every club collects dues & fees through the Team Topia platform. The only exceptions are generally teams that do not collect any dues, such as school-affiliated teams. This isn't a metric we track, so I cannot provide a precise percentage at this time, but I estimate over 90% of teams on our platform collect dues and fees through our platform. So far, in 2021, we have processed $20,204,967 in registration dues & fees, including merchandise purchased during registration. Of this amount, 72% was collected via online credit card payments, 23% was paid offline via check, and 5% was paid via private club membership accounts, which is typical of teams affiliated with country clubs. An additional $791,174 has been processed in 2021 outside of registrations via online stores on team websites. 100% of these transactions are processed via credit card. Cost of Goods (COGs) in our financials includes the following items: - Payment processing fees - App store platform fees - Web hosting & related services - Support-related software & services - Q: It's clear that you've been very successful in the swim space. Broadly speaking you plan to expand within swim and to other sports (track, cross-country, etc.) A key success factor within swim seems to be Mason Hale's personal experience as a parent of a kid on a swim team and thus an intimate understanding of the needs in this space. Roughly how much growth do you anticipate will come from expansion within swim vs other sports? Is there much more growth available within swim? To what extent will you be able to leverage existing tech for other sports? Is there risk of spreading the company too thin? How will you ensure that you understand the needs of other sports as intimately as you understand the needs of swim? - A: Thank you for the questions! I'll dig into each one in turn. == Q: Roughly how much growth do you anticipate will come from expansion within swim vs other sports? Is there much more growth available within swim? == Even with the traction we have in the swim market, there is still room to grow more than 10x within the swim market. Our estimation is that the total addressable market for swim team and meet management software is around $25-50M per year in the US and $80-100M per year worldwide. Primary available growth areas in the swim market include: 1. Meet Management — There is a very real near-term opportunity for our Meet Maestro product to displace the current market leader (Hy-Tek Meet Manager). This alone could result in 10x increase in revenue. (It is also worth mentioning here that Hy-Tek Meet Manager is also the leading solution for managing track & field meets in the US.) 2. Year-round/club — We are currently hard at work on features to support the more complex billing needs of year-round, club swim teams. A successful launch of these features could also quickly multiply annual revenue. 3. International — We currently have customers in 18 different countries, but we have not yet invested in engineering to support any languages other than English or to market our products internationally. While expanding internationally definitely comes with many legal and logistical complexities, it also presents another opportunity to further multiply revenues. The biggest near-term opportunity is in Australia, which is not only English-speaking, but also has rougly double the level of participation in competitive swimming as the US. It also helps that our head of Sales & Marketing is an Australian Olympic swimmer with a rich network of contacts in this market. Swimming represents roughly 5-10% of the overall sports market, thus expansion beyond swimming represents another opportunity to grow revenue by at least another order of magnitude. - A: == Q: To what extent will you be able to leverage existing tech for other sports? == Most of the technology we've built is not sport specific. Our platform includes terrific features for website content management, communications, roles & permissions, calendars, online registration, and volunteer management — none of which are specific to swimming. All of these are easily leveraged in other markets. In my opinion, after all the effort we've put into building this platform, it would be a shame *not* to expand it to serve additional sports. As for the parts of our platform that are swimming specific, we think of them more in terms of being "timed sport" specific. And those features should be relatively easy to extend to support other timed sports. For example, as mentioned previously, the primary software used to run swim meets (Hy-Tek Meet Manager), which Meet Maestro is rapidly replacing in the swim market, is also the market leader for running track & field events. We already are feeling "pull" from the market into other sports. Even though we currently only market to swim teams, occasionally a non-swim team will sign up for an account. We always respond to these non-swim teams suggesting we close their accounts because we don't want them to be disappointed by the (current) swim-centric focus of our platform. However, in some cases, despite our objections, teams will tell us they want to pay for SwimTopia anyway, because even with its limitations, they prefer it over alternatives. I've had a customer tell me "Look, you can either take my money, or I can hang up and call back pretending to be a swim team, what do you want me to do?" As a result, today we have a handful of track & field, cross-country, and ski teams using SwimTopia. With this campaign, I am happy to finally and publicly commit to better supporting the needs of these non-swim customers. - Q: You list a VP of Engineering but no engineers. Is that just the mgmt team listed or do you outsource your development? If so, what are future plans around outsourcing vs in-house? - A: Thanks for the question! Our products are currently built by our VP of Engineering (Chris Bonser) and yours truly, Founder & CEO (Mason Hale), with occasional assistance from contract/outsourced development resources. We don't have any dependencies on outside contractors to make updates or bug fixes to any of our products. Therefore, even though we do utilize contract resources at times, I would not describe our development as "outsourced." An expected immediate benefit of this campaign is to grow our development team so that we can more quickly add features and respond to customer feedback and suggestions. In fact, we're already seeing those benefits! As a direct result of this campaign, we recently opened a new Sr. Software Engineer position. If you know anyone who might be interested in joining our amazing team, we appreciate sharing the link to our careers page with them: https://www.swimtopia.com/careers/ - Q: Do you have a patent of Team Topia? - A: While we do have registered trademarks, we do not currently hold any patents, pending or otherwise. - Q: This is all new to me. Is this a one-time contribution or will there be a requirement to donate more money in the future? Is this an opportunity to invest in Swim Topia and own a small percentage of equity in the company? If so, what is the % or possible return on the minimum investment of $100? - A: Thanks for the question. To be clear this is an investment, not a contribution or donation. You would be investing to own an equity stake in the company. The investment vehicle we're using for this campaign is a convertible note. Convertible notes are very common for investment in early stage companies. It is a loan made to the company that includes special terms to convert the capital + accrued interest to equity in a future priced equity round of $1,000,000 or more (called a Qualified Financing). I recommend reading Wefunder's primer on convertible notes: https://wefunder.com/post/17-how-convertible-notes-work Our goal is to raise a Series A round of $5 million or more within the next 24 months. We can't guarantee we will achieve that goal, but that is what we are focused on achieving. If we do reach that goal and you invested in the campaign, your invested capital plus accrued interest would convert to shares of equity at that point in time. The price per share (and thus the % of the company) would be determined by the price set in that future equity round. Because you would be investing earlier, there are two terms in the convertible note that are meant to give you additional upside, relative to investors that invest later in that future round. These terms are: - Valuation cap: The valuation cap for this campaign is $10 million. This means that if in a future Qualified Financing the company pre-money valuation is set at something higher than $10 million, your investment would convert at the cap, as if the valuation were $10 million. Hypothetically, if a future Qualified Financing valued the company at $20 million, your investment would convert to approximately 2x the number of shares as someone investing for the first time in that future round, due to the valuation cap. I say "approximately" because accrued interest and rounding to whole shares could cause the actual number to be slightly more or less than 2x in that scenario. - Discount rate: The discount rate for this campaign is set at 20%. If on the other hand a future investment valued the company at $10 million or less, your investment would convert at a 20% discount of that future valuation. So if the future valuation was $10 million, your investment would convert as if the valuation was $8 million instead. Note that either the valuation cap or discount rate would apply, not both. The term most beneficial to the investor (you) would be used. Because we don't yet know exactly when a future Qualified Financing will happen or what the valuation may be at that time, we can't precisely say what % of the company your investment would be worth today. But given the valuation cap and discount rate, you have some assurance of a good return on your investment, provided a Qualified Financing occurs. It is also worth addressing the fact that the future is uncertain. We can't predict what will happen. A future Qualified Financing may never occur. In that case, this investment is still a debt on the company's balance sheet that is accruing interest. The interest rate for this campaign is set at 4% and the term of the loan is set at 36 months. No one would typically invest solely for the interest rate, but it does provide downside protection to the investor. In the event of a company liquidation, investors in convertible notes, as debt holders, would be repaid with interest before any other shareholders/investors would be receive money. And if the 3 year term expires with no Qualified Financing the note would come due and need to be repaid with interest at that time. Relative to other forms of investment, where if no "exit" occurs you never have an opportunity to get your money back, this is another valuable form of downside protection. That interest is continually accruing also creates a "ticking clock" in the mind of the company founder (me) to reach a Qualified Financing sooner rather than later so that accrued interest does not continue to pile up. In this way, the interest rate aligns the interests of the investor and company (both want to get to a Qualified Financing, with as a high a valuation as possible, sooner rather than later). I always like aligning interests. ;-) - Q: When will the conversion of the Convertible Promissory Notes for this offering here perhaps become equity securities or shares or SAFE OR WILL NOT? - A: The convertible notes will convert to equity when a Qualified Financing occurs, which is defined as a priced equity round of $1,000,000 or more. Our goal is to raise a Series A round of $5M or more within the next 2 years. While we cannot guarantee hitting the goal, that is our plan. Hitting this goal would be a Qualified Financing that would result in conversion of all notes from this crowdfunding campaign. I should note that while no one generally invests in a convertible note for the interest rate, that interest rate does create a "ticking clock" that increases the urgency for the company to reach a Qualified Financing so that the accrued interest does not continue to grow indefinitely. This feature aligns interests for investor and the company: everyone want to reach a Qualified Financing to convert the notes. However, because a convertible note is debt carrying interest, it also provides significant downside protections to the note holder, which are not present in other forms of investment. Please see my reply to the previous question for more details. - Q: What is the ROI for us as Team Topia investors on wefunder.com ????? - A: Hi George — investors in our Wefunder campaign were repaid principal plus interest (4% per year) which equates to (approximately) a 1.12x return on investment. Please see the confidential investor-only updates for more details. - Q: What is the ROI for us as Team Topia investors on wefunder.com ????? - A: Please see answer above - Q: I do not like this.. I prefer Equity at the end. "HOWEVER, then we find some tricky language. If the conversion price for note holders is less than the conversion price issued at Qualified Financing - which of course it will be as that is the whole point of investing early - then the Company will have the right to make adjustments which effectively nullify the better price that note holders receive for investing early. Essentially the adjustments boil down to the following: The note holders will receive the same liquidation preference, anti-dilution protection, and dividend yield as if they purchased equities at the same price as offered in the Qualified Financing rather than the lower price expected for investing early. Effectively, this means that investors in this round may get the same terms as subsequent investors at Qualified Financing while taking greater risk. " - A: Please see my reply to that question. The question incorrectly interpreted the language of the note. The company does NOT have rights to make adjustments that would nullify the better price the note holders would receive for investing early. That question was based on a misreading of the language of the note. I believe the language referenced (it wasn't quoted directly, so I'm not 100% certain) was the last sentence of section 2(a), to protect against the "liquidation preference overhang" issue. The liquidation preference feature of preferred equity gives the investor the option to either receive back the money they invested or to receive a proportional allocation of proceeds based on the number of shares owned. This is a downside protection for the investor in the event the company was sold for less than the valuation at the time of the investment. The language in the note is asserting the right for the company to add provisions such that this liquidation preference benefit would be limited to the amount *actually invested* not the calculated amount after discount or a valuation cap is applied. This language does not affect the upside benefit of the convertible note holder. This is complicated language but a very common term, and it is often the case that these terms would be required by new investors. - Q: I have read the language in the Convertible Promissory Note for this offering here: https://www.sec.gov/Archives/edgar/data/1798181/000167025421001052/document_4.pdf Naturally, it is full of legalese and I’ve attempted a translation. The note is due Sept 17th, 2024 @ 4% APR. The company may not prepay the note without consent of the majority of the note holders terms of outstanding principal. ** Section 2a deals with Conversion and Repayment When the company raises at least $1M in Qualified Financing the note converts at $10M or at a 20% discount to the valuation, whichever is less. HOWEVER, then we find some tricky language. If the conversion price for note holders is less than the conversion price issued at Qualified Financing - which of course it will be as that is the whole point of investing early - then the Company will have the right to make adjustments which effectively nullify the better price that note holders receive for investing early. Essentially the adjustments boil down to the following: The note holders will receive the same liquidation preference, anti-dilution protection, and dividend yield as if they purchased equities at the same price as offered in the Qualified Financing rather than the lower price expected for investing early. Effectively, this means that investors in this round may get the same terms as subsequent investors at Qualified Financing while taking greater risk. ** Section 2b deals with potential acquisition - “Change of Control” In case of acquisition while the note is outstanding the company shall pay off the note (principle and interest accrued to date). As a convertible note investor I want the equity, I do not want my money back with interest. But it seems the note holders don’t get the upside in an acquisition. ** No Additional Funds Raised Finally, I did not see any discussion of what happens if the company doesn’t raise any more money and simply continues to operate. You’ve stated: “If need be, the company believes it could pull back spending to attain profitability within 6 months.“ So this is a rather realistic outcome. I expected that the note would convert at a pre-set target price, say $10M, but I see no such provision in the contract. ** SUMMARY I see the following possible scenarios (other than Bankruptcy) : 1. Qualified Financing - The note holders will receive equity, but the company has the right to effectively nullify the better price the note holders should receive for investing earlier. 2. Acquisition prior to Qualified Financing, while the note is outstanding. Note holders are paid back principle and interest accrued to date. Note holders do not get the upside they would get with equity. 3. Company is successful with no additional funds raised - No provision to convert to equity. The company may pay off the note at maturity. Note holders do not get the upside they would get with equity. It seems investors in this round will only have any upside of equity holders if there is a Qualified Financing event. At companies discretion the note holders may not be compensated for taking additional risk by investing early. In case the company is successful with no additional financing or there is an acquisition, the note holders are simply paid back. Have I understood and described the risk/reward of this investment correctly? Please correct me if I am wrong about any of this. Thank you. - A: Thanks for the question. First, I should point out that the note we're using is the default/standard convertible note form provided by the Wefunder platform, which in turn is based on the Cooley GO open source convertible debt financing documents, available from https://www.cooleygo.com/documents/series-seed-notes-financing-package/ We're using very widely used legal documents for this campaign. We didn't create new bespoke convertible note documents and we're certainly not trying to bury any gotchas in the fine print. I will follow-up with another reply to address your specific questions and concerns. To make sure I give you full and accurate information, I'm first confirming my understanding of the note and the points you raised with our attorney. I'm not a lawyer, and I don't want to inadvertantly give out incorrect information. In the meantime, if you haven't already, I suggest reading Wefunder's documentation on convertible notes for more details on how this very common form of investment works: https://wefunder.com/post/17-how-convertible-notes-work - A: Thanks again, for the questions. I have provided a more detailed reply to your specific questions below, but as a starting point, please understand that the following is not legal advice and you should discuss these and any other questions you have with respect to the transaction with your personal counsel. >> 1. Qualified Financing - The note holders will receive equity, but the company has the right to effectively nullify the better price the note holders should receive for investing earlier. This is not an accurate statement. To the extent that you are referring to the language contained in the final sentence in Section 2(a) (beginning "Notwithstanding this paragraph, if the conversion price of the Notes..."), then the effect is not to nullify the better price the noteholders receive for investing earlier -- even if the Company did opt to create this new series of preferred stock, the number of shares of preferred stock into which the notes will convert in a Qualified Financing will still be based on either the 20% discount rate or the conversion cap price (whichever is more noteholder favorable), which will result in noteholders receiving more shares of preferred stock than they would have had they invested the same dollar amount in the Qualified Financing. This sentence provides that the listed, price-based rights (per share liquidation preference, per share anti-dilution protections, per share dividend calculations) -- which are primarily targeted at downside events -- will be based on the amount per share actually paid by the noteholders. In all other ways, these shares of preferred would be identical to the Equity Securities issued in the Qualified Financing. You can see a more detailed discussion of similar provisions and the "liquidation preference overhang" that they are intended to correct for at the following link: https://www.fenwick.com/insights/publications/liquidation-preference-overhang-shadow-preferred-stock-de-mystified. >> 2. Acquisition prior to Qualified Financing, while the note is outstanding. Note holders are paid back principle and interest accrued to date. Note holders do not get the upside they would get with equity. >> >> 3. Company is successful with no additional funds raised - No provision to convert to equity. The company may pay off the note at maturity. Note holders do not get the upside they would get with equity. Answering #2 and #3 together, because your assessment here is correct: Subject to the terms and conditions of the notes, (i) in the event of an acquisition prior to a Qualified financing, the Company would repay the notes, plus accrued interest, and (ii) on or after the maturity date, the notes, plus accrued interest, may be repaid, and in neither case do the noteholders have the right to elect to convert into equity. We see these as a tradeoff for the greater downside protections provided to convertible noteholders that are generally not afforded to either equity or convertible equity (e.g., SAFEs): namely, the accrual of interest, the right to require repayment at maturity, and creditor status/priority in a liquidation event. It is worth pointing out here that convertible notes provide more downside protection relative to equity and convertible equity (SAFEs). Because a convertible note is debt that is carried on the balance sheet, in a worst case liquidation scenario noteholders would get paid back with interest before any other investors would recover any of their investment. Additionally, if a note reached maturity without a Qualified financing event, in many cases, a company would prefer to extend the term of an outstanding note rather than pay off the note with interest. At that time, if the company chose to do so, it could request an extension from the noteholder. The noteholder could then decide whether to extend the note term (giving more time for a Qualified financing event to occur while continuing to accrue interest), or instead opt to have the note repaid. This option to extend, while not guaranteed, is common and is not an option provided to other forms of investment. - Q: Good afternoon, Mason, I invested on Feb 2022 and look forward to the company's growth. My interest in this company stemmed/inspired by my 3 swimmers in the family (including a former synchronized swimmer) and one very avid speed swimmer/water polo player. I am new to all this, so could you please explain how our monies will grow and when we would expect? Thank you. - A: Hi Pauline — Thank you for your support! Your investment is in the form of a convertible note, which is a special form of loan that converts to shares in Team Topia when triggered by specific events, including raising a priced equity investment round of $1M or more. The loan accrues a 4% annual interest rate, which provides downside protection to investors. When/if the loan converts to equity, the primary vehicle for a return would be an exit in the form acquisition by a larger company or a public offering of company stock. The timing of these future events, or even whether they will happen at all, is very difficult to predict. You should expect to wait years before realizing a return on your investment. The term of the convertible note is 3 years, which provides a time boundary within which a qualifying conversion event needs to occur. For more details on the specific terms of this investment, please see the answer to this previous question: https://wefunder.com/comments/183155 - Q: Hello Mason, I see you have answered most questions quite brilliantly. However I would love to discuss further, first having a more detailed look at your financials including projections especially for the industry you're in and also about alternative funding opportunities available at our company if we are satisfied. You can drop me an email at richard@700capital.com, then we can start looking at financing your whole target. Thanks. - A: Thanks Richard. I'll reach out. To be clear, our campaign is closed, so the opportunity to join in during this round has passed. - Q: Can you please share YTD revenue and projection for 2022? - A: Yes. Total revenue for 2021 was $967,056. Because we are using GAAP account rules, subscription revenue is recognized evenly over the duration of the subscription. We received significant new annual subscription revenue in Q4 2021, and thus most of that income is not reflected in the 2021 total, but will be reflected in 2022 GAAP revenue instead. While this total is short of our original $1.05M projection for 2021, we remain confident in meeting or exceeding our existing $1.69M revenue projection for 2022.