Answers by Justin Fenchel, CEO @ BeatBox
Invest in BeatBox today - www.wefunder.com/beatbox
What is a convertible note?
A convertible note is a great way for companies like us to raise money. If you are not familiar with how they work, PLEASE give the link below a read. In short, it is a debt instrument that will convert to equity at our eventual series C, IPO or sale of the company; and it protects the investors with either a cap or discount on valuation. A convertible note does NOT set a valuation, however it does have a maximum valuation in the event we raise an equity round above the cap of $190m. Our note has a 10% discount, which means if our Series C valuation is $150m, the convertible note holders would get in at $135m, a 10% discount.https://www.seedinvest.com/blog/angel-investing/how-convertible-notes-work
Am I buying a part of BeatBox when I invest?
You are buying into a convertible note, which will eventually convert into equity at a later date. At that time you will own a part of BeatBox.
How do I get my investment back?
You can get your investment back in a few ways.
- If we sold the company to a larger alcohol company
- If we did an IPO
- If we started to pay dividends
When will I get my money back
We are on a mission to scale to $100m in revenue by 2024. It is not recommended to invest in BeatBox if you believe you will need that money before the end of 2024 at the earliest. You could get your money back sooner but it will likely be at least three years.
What is the projected return on my investment
That’s an impossible question to answer, however our valuation of the company is measured by a multiple of revenue. If we grow our revenue substantially over the next 3 years, there should be a nice return to investors.Does
BeatBox pay dividends?
We are simply growing way too fast to pay dividends. Any money we make we put right back into our growth.
How did BeatBox come up with its $190m cap valuation?
Typically alcohol companies are valued in the range of 6-10x revenue. We put a cap on the note of 190 based on a multiple of 7.6x our expected trailing 12 month revenue at the end of June 2022. Our current TTM revenue is $21.5, and by end of June it will be $25m+
Why doesn’t the details page on WeFunder show your 2021 financials?
We are only allowed to show our audited financials, and our 2021 financials are final but haven’t had a completed audit yet. This should be done in the next few weeks and we will post them.
What are some other alcohol brands that have been acquired recently? And how much were they doing in revenue and how much did they sell for?
There have been a few deals recently, although it is very difficult to get access to the numbers of both revenue and the sales price. That is typically private and confidential. What we do know is that exits in alcohol are typically in the 6-10x range, and can even be much higher than that in some cases.
What are you guys going to use the money for?
Hiring and Marketing!! We need more people selling BeatBox and need to be at way more festivals/venues/events!