Since Stackhouse is an LLC offering a convertible note, we do not currently have a price per share. A convertible note is a loan that converts into equity after the company has an equity financing event. It is most common among early-stage technology startups that intend to later raise venture or some other form of capital. Upon such an event your investment would convert to stock at a discount. Essentially whatever they buy for a dollar you can buy for 80 cents up to your principal plus interest.
We're offering a 2 year Note, with a 20% discount, and 8% interest. Our valuation is based on both the value of the physical tower asset once built and the income stream generated by the development.
We anticipate a raise of $500k, once converted to equity will represent a 13% ownership interest, at a $5M valuation. Dividends/distributions will be allocated by ownership interest. Our goal is to build 25 locations over the next 5 years. In year 5 we anticipate the annual dividend for a $5,000 investment to be approximately $9,000. Because we designed the Stackhouse vertical community to be replicable and modular, we’ll be able to build in cities across the country much faster than our competitors. In year 10 with spaces available for 25k container homes, we project the annual payment to be in excess of $300,000.
As for reinvesting, while you can choose to reinvest into Stackhouse it would be under the new terms. Once we convert and set a valuation and, if all goes as planned, that valuation continues to rise, reinvested dollars would buy in at the new valuation. For example, at our current projected valuation($5mm) 500k would represent 10% of Stackhouse. Once the valuation hits $10mm, 500k is only worth 5% of the company, so people who reinvest would get about half as much ownership for their reinvested dollars and therefore half as much in dividend payments. Essentially, while investing in this first round is seen as riskier because we're a new company, we offer the discount and interest rate to incentive folks taking that risk now with bigger payouts later.
All of our financial projections can be found in this Google Drive Folder. In the Financials folder there is a new spreadsheet called Wefunder Investor Dividends Calculator - you can input your investment amount and see how your annual dividends could increase. We plan to start paying dividends in year 5, highlighted in green.
If you're still deciding to #backthestack please book an appointment on our Calendly. We'd love to speak with you and share our plans.
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