It’s time we laid out our fundamental strategy – how we plan to use equity crowdfunding to create a company with over 1,000,000 customers and shareholders. How we plan to create a company to rival eBates, RetailMeNot, ShopAtHome, and a bunch of others.
We’re doing it by making our customers, every one of our customers, our shareholders. That is, our owners. We’re giving each customer a stake in our success. I hope they want it to be a long-term stake, but we’re giving them the choice and the ability to make it a short-term stake, to sell that stake when they’re ready, not when we’re ready.
The JOBS Act made doing this for a company just starting out much more affordable, perhaps 10% of the initial and ongoing cost of the traditional way of going public. “Being public” is important, because there is no other rational or legal way to have a company with 1,000,000 shareholders in the U.S. Being public means we have the chance to create a vibrant market where a shareholder can buy or sell our stock at will.
We’re approaching this in four phases.
Phase I – Create the basic business
We launched in 2015 and achieved traction in the 1st quarter of 2016. Lots of member / shareholders started using us to save money on their purchases, and to earn stock in our startup. We’ve been sending out checks regularly. We have the metrics on how much it costs to acquire a new shopper. We’re growing on all measures we care about.
We do promotions, we add new members, and add new stores. But at this stage, we’re still without the knowledge of what really happens once we’re able to deliver stock to a customer. That comes with SEC Qualification.
Phase II – Create a Public Company
We have to be legally able to have millions of members earn and receive stock in iConsumer. That requires finalizing our offering, which requires choosing technology that allows investors to invest, a transfer agent to keep track of those investors, and finally, SEC Qualification.
That makes us “public”. Anybody, rich or poor, can buy, own, or sell our stock. There are some who suggest that because we’re doing this in a new way, exempt from certain securities regulations, we’re not “public”. Since millions of people can own our stock legally, I think that makes us public.
To make being public happen quickly, our offering is being split into two parts. The first part of the offering is intended to be sold to “friends and family”. It happens immediately upon the SEC saying “Qualified”. So long as we sell $250,000 of our stock, we’re golden.
However, we could use more. Marketing is brutally expensive. The $500,000 we intend to raise at this juncture will be used to fund the next phase – the big push.
We also need to invest more in making sure we have technology, customer service, and money-saving offers that compete with our very good rivals.
Phase III – Make it Easy to Trade Our Stock
Being freely tradeable doesn’t mean easily tradeable. Our goal is for every member / shareholder to be easily able to deposit the iConsumer stock they earn, or the stock they have purchased, into their eTrade or Schwab brokerage account. And do with it what they wish. Hold on to it, or sell it.
It’s harder than it looks (and harder than we realized). There are a bunch of things we need to do. We’ll need an OTC (or other market) listing. To do that effectively means we need to make our stock DTC registered. Then, it has to be DWAC capable (basically, all this really means is that everything can happen electronically). To do all of those things we need a qualified transfer agent that can handle the volume. Can you imagine what would happen if we had 1,000,000 shareholders and we had to send them pieces of paper.
Once we’ve jumped through those hoops, which take time, but are mostly mechanical, we have to be good marketers. It’s our job to increase the value of the stock our shareholders own.
We need to build a market for our stock, and prove that people want to buy it. We also need a market to help us establish the price at which customers earn their stock.
It’ll take about two months after our friends and family phase of the offering to get the pieces into place. After that, we go to town.
We start marketing our company heavily. We have the advantage that we get to double dip. Each prospective investor is also a prospective customer, and vice versa. Our goal is to raise an additional $1,500,000 during this phase, and gain tens of thousands of new customers at the same time.
Our marketing plans are basically done. We’ve engaged the best companies in the business. We’re chomping at the bit.
Phase IV – Make it possible for others to promote iConsumer’s stock
This is a really important point. When we’ve gotten to Phase III, it should be easy for a shareholder to sell his or her stock. When they find somebody who wants to buy it. Or that somebody finds them. But there is a really big business built around promoting stocks, and we can’t be promoted by anybody in that business. Those pesky securities regulations.
Putting it another way. If you’re paid to help people buy stocks (a stockbroker, for instance), you can’t, by law, suggest to them they buy iConsumer stock. Phase IV is all about lifting that restriction.
We can’t realistically do it overnight. We have to get bigger, so that we can afford a higher level of regulation. We need to prove that we can handle a ton of shareholders. We need to prove we can meet and beat our estimates. We need to build relationships with Wall Street types.
Disclaimer – Strategies Change