As of 1/19/18
Here’s a quick recap of really good questions we get over and over:
Q: Why should I invest?
A: At least three reasons. First, because you want the experience of being an investor. Second, because you can be a part of addressing the 1% vs 99% problem for the price of two drinks. Third, because you believe that you might make lots of money from your investment, for a risk you can afford.
Q: How do I invest?
A: We’re honored you’d think of investing. Head on over to https://www.iConsumer.com/invest (and thanks for considering it). Investment is only allowed while we have an effective offering (SEC rules). As of 5/11/17, we do not have an effective offering. We expect to “go effective” again in February.
Q: I’m from Missouri, show me the money.
A: Here’s where being SEC regulated really helps our transparency. We spent tens of thousands of dollars preparing a year end report – a SEC Form 1-K, and then filing it with the SEC. Audited financials and all. Just head over to sec.gov and give it a read.
Q: What excites you the most?
A: Three things. Our cost to recruit new members has dropped dramatically. Our members are shopping and earning us more than we had anticipated, sooner than we anticipated. And our influencer campaign kicked off in late April, with several high profile people with strong followings agreeing to be involved with telling the world about iConsumer.
Q: What disappointments have there been?
A: Two big ones. FINRA (a regulator) and our PR campaign. FINRA has rules designed for a traditional IPO, not our new-fangled mini-IPO. It’s taking them longer to rewrite their rules, causing us delay and expense. And our PR campaign didn’t work. Too early we think.
Q: What are your future plans to raise money?
A: We’re planning to submit a new offering to the SEC, using a higher share price, before the end of May. That’s where increasing our valuation becomes so important. If prospective investors perceive our company as being more valuable, that will help to drive increases in our share price. The faster we raise money, the stronger we are.
Q: What’s going to drive valuation?
A: There are many things that affect the valuation of a company. For us, we believe the biggest factors will be the rate of our growth, the amount of investor cash we need to fuel that growth (less is better, attracting new members cost effectively is the goal), the amount of shopping each member does, and the amount of cash we earn each time a member shops.
Later, after we’re bigger, other factors may become more important. Some are out of our control. Can we manage our company efficiently? Will the stock market remain strong? Can we find more revenue sources to keep profitably growing?
The biggest question of all – does making all of our customers shareholders, with a real stake in the future, create a great company?
Q: What’s your stock worth?
A: The SEC doesn’t allow us to say. We’re allowed to say what we sell it for. In 2016, we sold it for $.045 a share. In May, $.09 a share.
Q: What’s the growth potential?
A: We’re growing rapidly in a very large market. In February, we grew by 62 members daily. In early April, we were growing by around 200 members a day. In mid May, about 270 members a day. We expect that rate to continue to increase, assuming we can finance an increase in growth. In March we discovered how to really grow fast, for a low cost per new member.
Q: How much might my stock be worth in the future? How much patience do I need?
A: Complicated questions. First, we’re early stage. You shouldn’t invest unless you’re willing to be patient. The biggest opportunities for amazing returns come from early stage companies. Investing in early stage companies has more risks and rewards. You should want your rewards to be outsized. You should be prepared to wait for those outsized rewards. Typically, investors at this stage aim for 3 to 10 times their investment and they’re prepared to wait for years. If you pay .09 a share, and each share becomes worth 10X more than you paid, your stock would be priced at $.90 a share.
Other companies that do similar things are worth billions and have tens of millions of customers. Our goal is to be worth billions, but there are no guarantees.
Q: So what’s all the fuss about the SEC and being tradeable?
A: iConsumer has completed a mini-IPO. That’s a big deal. We’re one of the very first. The SEC required a ton of paperwork for our Reg. A+ offering from us, our auditors, our legal counsel, and others who double check to make sure we’re not bad people and that our investors aren’t bad people. The SEC qualified iConsumer’s offering with a share price of $.045. And then, even more importantly, people bought our stock, and we could legally transfer our stock to thousands and thousands of shareholders. After that, we raised the price of our stock to $.09 a share, and the SEC re-qualifed our offering. And once again, people invested in our stock at the higher price. The SEC isn’t saying our price is high or low. They’re just saying we completely presented the information they required of us.
Two major differences between a Reg. A+ mini-IPO and a traditional IPO. First a mini-IPO is millions and millions of dollars cheaper than the traditional IPO. A mini-IPO is appropriate for an early stage company. Second, usually part of the cost of a traditional IPO is getting listed on a stock exchange like the NASDAQ or NYSE. That doesn’t happen as part of the mini-IPO.
Our successful mini-IPO made us tradeable. Each and every one of our investors and members can sell their stock, at any time and to anybody they wish. IF you can find a buyer. Which isn’t easy. That’s where a stock market comes into play.
Q: How does being quoted on a stock market like the OTC help me?
A: Stock markets and stock exchanges are the places where buyers and sellers can easily “meet up” to trade stock. They work a little bit differently, but effectively, you can see if there is somebody who wants to buy at a price you’re willing to sell at, or, perhaps find somebody who wants to sell at a price you’re willing to buy at. A stock market is like an eBay for stocks. A stock exchange is like eBay on steroids.
Like eBay, a market or exchange gives guidance as to what your iConsumer stock might be worth, if you wanted to sell it that day.
Q: What’s your status with getting a ticker (stock) symbol and being quoted?
A: Our ticker: RWRDP. Still waiting on final back end stuff so that it actually shows bid and ask prices.
Q: Does being quoted mean I can sell my stock any time I want?
A: We wish. We’re still a small company. We’ll have to work hard to make sure that people want to buy your stock when you’re ready to sell it. Nobody knows about iConsumer yet. Until they do, they’re not ready to buy our stock. Even though we’re working on being quoted on the OTC QB, it’s going to be some time before there’s a line of people who want to buy our stock. That’s where the patience comes in.
Q: Accretive or Dilutive? Huh?
A: We’re issuing shares to new members when they join, refer other members, and as they shop. To a finance major, the question of whether issuing more stock to support members’ joining and shopping is bad or good always comes up.
Does each new member create new stock market value in excess of the value of shares they’re earning? If they are, each new member is “accretive” and stock issuances are almost always a good thing. If not, adding new members is “dilutive.” Sometimes dilutive issuances can be good, and sometimes bad. We think issuing stock in this circumstance is accretive and good.
When we analyze how the financial world values companies that look like iConsumer, and divide that value by the number of members those companies report having, we come up with a value per member that ranges from $200 to $400. It’s not an exact science, but a good ballpark guestimate. When eBates sold to a Japanese company, they appeared to have about 2,500,000 members, and they sold for a reported $960,000,000. About $384 per member.
For our projections, we’re assuming an iConsumer member is going to be worth about $200 in the financial market. Therefore, if the stock a member earns for being an iConsumer member is valued at less than $200, adding a new member is accretive. If the stock a member earns is worth more than $200, adding a member is dilutive.
And just because adding new members, and using stock as an incentive to shop, appears to be accretive today, that may change in the future. If it does, we’ll stop doing that.
Q: I’m a first-time investor, what should I do to make sure iConsumer is on the up and up?
A: It’s all about the people behind the opportunity. Not only the senior team members (Rob, Sandi, Melinda, & Kim), but the service providers, like the auditors (Wipfli LLP), the SEC counsel (Sara Hanks/CrowdCheck), the regular counsel (Scott Glickson/McGuire Woods), and the advisory board. Then look at the company’s history. In iConsumer’s case, do we send out checks to our members? What do they say? Peek at Facebook, do a Google search. And maybe lastly look at the SEC filings. The SEC has rules in place to make sure everybody involved does their homework to make sure our statements are factual. We’re one of very, very few early stage companies to voluntarily file voluminous paperwork with the SEC.
Q: How much should I invest?
A: Rob, CEO and co-founder, says: “Here’s what I tell my kids – invest no more than you can afford to lose and not care much. Losing your investment shouldn’t change your life. And if it’s a good investment, a home run, it should make you feel very, very happy.”
Q: When are you going to be profitable?
A: The best question of all! Two answers. First, our projections show us becoming cash flow positive (we generate more cash than we use) around the time we reach 250,000 members. If members shop better than we project, we’ll be cash flow positive sooner. If worse than projected, it’ll take longer. Right now, it looks like people are shopping better than we projected, so possibly as soon as we reach 100,000 members.
Second, because the accountants require us to treat the stock members earn for joining, referring, and shopping as an expense, it may be a long, long time before we’re “book” profitable. Which is why we focus on cash, not book profitability. The silver lining to that is it may mean we have to pay less in income taxes for a long, long time. One of the tricks of the 1% being enjoyed by our members. Paying less in taxes should help our valuation (and thus our stock price) go up. To help emphasize the importance of stock, you’ll see us talking about cash after paying rebates.
Q: Are people going to earn stock for shopping and referring forever?
A: We don’t know. Nobody’s built a company this way before. If earning stock for shopping continues to make the company more valuable and our stock price go up, we’ll continue. If not, then we’ll stop.