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SmartGurlz

SmartGurlz

SmartGurlz™ opens up a world of fun while inspiring interest in coding and the tech world with self-balancing robots.

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Deal Type

Convertible Note

Funding Goal

$1,000,000

Current Reservations

$342,000

Minimum Reservation

$1,000

Deal Stage

Seed

Interest (% per year)

5.00%

Term Length (Months)

12 months

Valuation Cap

$7,000,000

Conversion Discount (%)

20%

Warrant Coverage (%)

N/A

Open Date

05/21/2018

Maximum Reservation

$100,000

Closing Date

06/30/2018

Elevator Pitch

Disrupting the $40 billion EdTech market with educational tech products and reaching girls through a unique verbal-emotive curriculum, robots and apps in math, coding and technology.

KPIs

$363,744 Sales

Company Overview

SmartGurlz™ is a brand new line of friendly coding robots and action dolls that engage girls ages 6 and up in Science, Technology, Engineering and Math (STEM). Connected via smartphone or tablet, this coding robot plunges girls into the heart of the action and allows for hours and hours of play, fun and learning.

Disrupting the $40 billion EdTech market with educational tech products while reaching girls through a unique verbal-emotive curriculum, robots and apps featuring math, coding and technology. SmartGurlz™ takes young ladies from zero to coding in 60 seconds!

The Problem

Worldwide, there is a shortage of STEM professionals, and women are not engaging in STEM subjects. The gender gap begins early, with girls beginning to self-select away by age 11 due to a lack of confidence and interest.

The Solution

The time is right for SmartGurlz™. Backed by research to show that in order to engage more young girls, we need to address their preferred learning styles and brain function, SmartGurlz™ is more than just a fast-growing company, we're a movement of loyal customers who believe that girls need more than just exposure. They want tailored products that excite, ignite and engage.

The company was launched under the premise that a one-size-fits-all educational industry was failing our young girls in math and science. Studies into the brain show that play patterns including stories, art, music, creativity and cooperation (instead of competition) are better suited to engage girls and young women.

SmartGurlz™ is a bridge between the two worlds of story-based play and technology.


The Media

ABC's Shark Tank (Daymond John): "SmartGurlz will change the future, I am in."

CNN: "SmartGurlz is a cool gadget that teases the future."

Forbes: "SmartGurlz....gives a verbal lesson in brain development in girls and boys, with the latter developing grey matter that thrives on spatial reasoning, and the former, excelling in verbal and social skills."

The Product

A software and hardware platform that connects verbal-emotive thinking with coding robots, taking girls from zero to coding in 60 seconds.

  • App Control | SugarCoded e-learning platform is available in iOS, Android and Kindle. Translated into 6 languages including French, Spanish and German.
  • Games & Missions | Verbal-emotive learning exercises and games that engage girls via preferred learning techniques.
  • Coding | Step-by-step block coding exercises similar to Scratch and Google Blockly.
  • Stories | Engaging illustrated e-books on all SmartGurlz characters.

The Target Customer: Girls between the age of 5 and 12 years old.

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The Business Model

The first product is an app-controlled, self-balancing scooter with action character and learning app, SugarCoded that has self-paced tutorials, ebooks, games and missions. The company will also launch a subscription model with additional apps, AR games and physical toys that are tailored to this audience and build on the first robotic purchase.

We also have original content in character books and our brand strategy will be building a licensing revenue based on our mission of girl empowerment.

In addition, SmartGurlz™ has been approached by Nickelodeon, Walmart and Warner Bros. to support existing content or brand franchises with coding products and apps.

The Market

The U.S. education market is estimated to be about $1.3 trillion dollars with K-12: ~$670 billion. Edtech companies have a total worth of more than $8 billion of this space and parents' spend is growing each year.

Recent changes in federal and state educational standards will require that children are proficient in computer science and other STEM-related curriculum, and moving forward both parents and schools will be pressed to find engaging solutions for young learners. Major companies such as Microsoft, Ford, Apple, Adobe and Uber are investing heavily in programs to encourage more girls and women into STEM. While girls are natural born scientists, statistics show that most girls lean away from STEM by age 11 and less than 7% of women graduate with STEM degrees. We believe this is due to teaching methods.

The Competition

MGA Entertainment has a DIY STEM brand addressing pre-teen girls, however this offers no coding curriculum. Specifically on the coding robot category – Wonder Workshop, Sphero, Little Bits and Root Robotics are competitors but offer no products aimed at girls.

These products are either masculine or gender neutral, target a higher income audience with prices at $150+ and are currently not adequately addressing our target audience.

Strategic Barriers to Entry

SmartGurlz™ has unique creative competencies in curriculum, growing influencer base and profitable niche market that many larger players have not entered. Patent, design patents, trademarks, IP security measures (trade secrets) and copyright applications have been filed to protect core technology.


The Success

SmartGurlz’ curriculum approach is evidence-based and has generated returns: we've been able to efficiently allocate resources from our first Angel raise ($.6M) toward marketing and bring our sales up from $106,000 in 2016 to $765,000 in 2017, calculating a compounded annual growth rate of 620%. Additionally, SmartGurlz™ continues to acquire customers, recently adding the Girl Scouts of America as new wholesale customer.


Media Mentions

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AS SEEN ON SHARK TANK


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Traction

  • 620% revenue growth 2016 - 2017

    May, 2016
  • Filed U.S. and international patents on design

    November, 2017
  • Aired on ABC's Shark Tank and received offer from Daymond John

    November, 2017
  • Distribution channels include Amazon, Walmart, and Learning Express

    February, 2018
  • Partnered with Girl Scouts, BlackGirlsCode, Google, and more

    April, 2018

Pitch Deck

Press Mentions

Key Customers & Partners

Amazon Walmart Google

Previous Funding

  • $700,000 Equity
  • Raise Source: Investors
  • June 2017

Frequently Asked Questions

Please detail your manufacturing and distribution strategy

All products and IP are developed by SG and SG has signed a manufacturing agreement with LongShore in China, where production and quality approval system has been set up. Production capacity is more than 500,000 products a year. Products are purchased, MOQ 25.000 products, and shipped by sea to The Choon's Design (Rainbow Loom) warehouse in Detroit, from where distribution takes place to direct customers or larger online outlets such as Amazon and Walmart.com.

Please detail your strategy to scale post-raise and product roadmap.

Our major activities will be focused on increasing market share with awareness marketing. We have a contest, a viral video, several educational/marketing videos for social media planned. This year, we will launch a new male character as well as accessories. In addition, we are really excited about a new subscription model we are planning that includes a monthly SmartGurlz pouch with new activities, maps and learning exercises. In addition, Walmart has requested 2 new custom-made retail products for 2019.

What are SmartGurlz' next steps?

We are really interested in making a line of wearable products, headbands, codeable bracelets, codable clothing for girls/kids. We’ve just launched our curriculum programme - launching at the ISTE conference in June it will be linked to the core curriculum of US coding standards. We are also super excited that Apple Retail stores are talking to us about a potential deal.

What do you view as your exit opportunity?

We will probably be acquired by either a toy, robotics, or education company. Several have already shown interest.

Risks & Disclosures

The reviewing CPA has included a “going concern” note in the reviewed financials. The Company has incurred losses from inception of $853,964 which, among other factors, raises substantial doubt about the Company's ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon management's plans to raise additional capital from the issuance of debt or the sale of stock, its ability to commence profitable sales of its flagship product, and its ability to generate positive operational cash flow. The accompanying financial statements do not include any adjustments that might be required should the Company be unable to continue as a going concern.

We have not prepared any audited financial statements. Therefore, you have no audited financial information regarding the Company’s capitalization or assets or liabilities on which to make your investment decision. If you feel the information provided is insufficient, you should not invest in the Company.

The Company was originally formed as a foreign company, operating overseas and headquartered in Denmark, which may pose unknown risks. To the extent the Company continues operations overseas, it is subject to foreign laws and regulations regarding privacy, data protection, and other matters. Foreign data protection, privacy, and other laws and regulations are often more restrictive than those in the United States. These foreign laws and regulations are evolving and can be subject to significant change. In addition, the application and interpretation of these laws and regulations are often uncertain.

Cyclical and seasonal fluctuations in the economy and in traditional retail shopping may have an effect on our business. Both cyclical and seasonal fluctuations in traditional retail seasonality may affect our business. These seasonal trends may cause fluctuations in our quarterly results, including fluctuations in revenues.

The Company’s cash position is relatively weak. The Company currently has only $33,127 in cash balances as of December 31, 2017. The Company could be harmed if it is unable to meet its cash demands, and the Company may not be able to continue operations if they are not able to raise additional funds.

The Company may be unable to maintain, promote, and grow its brand through marketing and communications strategies. It may prove difficult for the Company to dramatically increase the number of customers that it serves or to establish itself as a well-known brand in the competitive recruitment space. Additionally, the product may be in a market where customers will not have brand loyalty.

The Company has indicated that it has engaged in certain transactions with related persons. Please see the section of this Memorandum entitled "Transactions with Related Persons and Conflicts of Interest" for further details.

The Company has a manufacturing contract with a company that manufactures the product in China. There is the potential that the company could experience manufacturing difficulties and have trouble shipping on time as a result. If the Company uses a single or limited number of suppliers, they may be at risk of shortage, price increases, changes, delay, or discontinuation of key components, which could disrupt and adversely affect its business.

The development and commercialization of our products and services are highly competitive. We face competition with respect to any products and services that we may seek to develop or commercialize in the future. Our competitors include major companies worldwide. Many of our competitors have significantly greater financial, technical and human resources than we have and superior expertise in research and development and marketing approved services and thus may be better equipped than us to develop and commercialize services. These competitors also compete with us in recruiting and retaining qualified personnel and acquiring technologies. Smaller or early stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. Accordingly, our competitors may commercialize products more rapidly or effectively than we are able to, which would adversely affect our competitive position, the likelihood that our services will achieve initial market acceptance and our ability to generate meaningful additional revenues from our products and services.

The Company’s success depends on the experience and skill of the board of directors, its executive officers and key employees. In particular, the Company is dependent on Sharmi Albrechtsen and Jesper Nissen. There can be no assurance that they will continue to be employed by the Company for a particular period of time. The loss of our key employees or any member of the board of directors or executive officer could harm the Company’s business, financial condition, cash flow and results of operations.

General Risks and Disclosures

Start-up investing is risky. Investing in startups is very risky, highly speculative, and should not be made by anyone who cannot afford to lose their entire investment. Unlike an investment in a mature business where there is a track record of revenue and income, the success of a startup or early-stage venture often relies on the development of a new product or service that may or may not find a market. Before investing, you should carefully consider the specific risks and disclosures related to both this offering type and the company which can be found in this company profile and the documents in the data room below.

Your shares are not easily transferable. You should not plan on being able to readily transfer and/or resell your security. Currently there is no market or liquidity for these shares and the company does not have any plans to list these shares on an exchange or other secondary market. At some point the company may choose to do so, but until then you should plan to hold your investment for a significant period of time before a “liquidation event” occurs. A “liquidation event” is when the company either lists their shares on an exchange, is acquired, or goes bankrupt.

The Company may not pay dividends for the foreseeable future. Unless otherwise specified in the offering documents and subject to state law, you are not entitled to receive any dividends on your interest in the Company. Accordingly, any potential investor who anticipates the need for current dividends or income from an investment should not purchase any of the securities offered on the Site.

Valuation and capitalization. Unlike listed companies that are valued publicly through market-driven stock prices, the valuation of private companies, especially startups, is difficult to assess and you may risk overpaying for your investment. In addition, there may be additional classes of equity with rights that are superior to the class of equity being sold.

You may only receive limited disclosure. While the company must disclose certain information, since the company is at an early-stage they may only be able to provide limited information about its business plan and operations because it does not have fully developed operations or a long history. The company may also only obligated to file information periodically regarding its business, including financial statements. A publicly listed company, in contrast, is required to file annual and quarterly reports and promptly disclose certain events — through continuing disclosure that you can use to evaluate the status of your investment.

Investment in personnel. An early-stage investment is also an investment in the entrepreneur or management of the company. Being able to execute on the business plan is often an important factor in whether the business is viable and successful. You should be aware that a portion of your investment may fund the compensation of the company’s employees, including its management. You should carefully review any disclosure regarding the company’s use of proceeds.

Possibility of fraud. In light of the relative ease with which early-stage companies can raise funds, it may be the case that certain opportunities turn out to be money-losing fraudulent schemes. As with other investments, there is no guarantee that investments will be immune from fraud.

Lack of professional guidance. Many successful companies partially attribute their early success to the guidance of professional early-stage investors (e.g., angel investors and venture capital firms). These investors often negotiate for seats on the company’s board of directors and play an important role through their resources, contacts and experience in assisting early-stage companies in executing on their business plans. An early-stage company may not have the benefit of such professional investors.

Documents

Confidential

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