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1 | tinyB chocolate brings people together through delicious, fun experiences. |
2 | Gross margins over 65%. Revenue growth of 120% in the first half of 2019 vs first half of 2018. |
3 | Close to 100 events to date. Repeat clients like Google, Cisco, Postmates and more. Outstanding client reviews. |
4 | Team events are expected perks at Bay Area companies. Affluent consumers also seek out new experiences. |
5 | tinyB's on-site chocolate-making events are easy, engaging and delicious. Great for smaller team buildings or larger events. |
6 | Renata, our Founder and Chocolatier, learned to make brigadeiros from her mother growing up in Brazil. |
7 | Andrei, Renata's husband and Founder, started 2 successful startups. One was acquired for over $100MM and the other is still growing. |
8 | $3,000 average sale. Low cost of sales. |
9 | Lead Investor: committed $0 on these terms |
Renata, our Founder and chocolatier, loves brigadeiros. She learned her craft from her mother while growing up in Brazil and helped her over 10 years. She wants others to discover them and fall in love as she did. Delicious, different and fun, they're chocolate with a Brazilian soul.
Today tinyB’s are still made by hand, from a family recipe and the best local ingredients and gifts are available from our online store.
Our focus is providing team building events for companies that want to give their employees something special. tinyB's events are easy, hands-on, chocolate making experiences that are so fun, guests open up and connect.
Our online store offers gifts for both consumers and as part of a business gifting services, however we have not invested significantly in that side of the business.
Chocolate has a superpower: it brings us back to the uncomplicated joy of childhood and the fun of indulgence. It makes us smile, and when we smile together, we become closer.
At it's heart, tinyB is about bringing that experience to life in as many ways as we can.
Today we generate revenue from events, in the future we may open stores like this very successful Pop Up we created in December 2018 in San Francisco:
Guests put on gloves, choose from a selection of chocolate centers, roll them in one of many toppings and ... they've just made their first brigadeiro! We talk about the brigadeiro's cultural background, ingredients, popular flavors and we encourage guests to have fun and experiment.
Usually guests have most fun with the Chocolate Challenge, a friendly competition at the end of the event for the best looking brigadeiro.
The brigadeiros created look so bad we don't post photos, but their creator's explanation is often very funny. Here's an example:
We have executed close to 100 events and all our feedback has been very positive.
“Yesterday’s event was fabulous! Everyone loved it.” - TJ Locke, Cisco
“The event was fantastic! Everyone had a lot of fun and the chocolates are amazing. Keep doing what you're doing.” - Jennifer Hooper, Google
Our team had SO much fun! Super easy to set up and the team running it was GREAT!
- Cora Fowler, Google
"The team had an absolute blast!!" - Chiao Yen, Manger, Twitter
“A humongous hit.” - Nuna Atajda, Twitter
“… it just blew us away. I’ve been running events for 8 years and I was immensely impressed.” - Annie Wu, Postmates
"I’ve never smiled so much with this group." - Jennifer Walker, Delphix
"I received soooo many compliments for the event." - Manon Roy, Synopsys
Our Yelp and Google reviews as of August, 2019:
Our clients are Executive Administrator (EA's) in a top high tech or biotech company in the San Francisco Bay Area. They use events to retain employees in a tight labor market.
We estimate there are over 7,000 such decision makers in this area, each supporting 50 employees. Each EA plans an average of 2 team building events and one holiday party per year. We estimate that the spend per employee per year is $200, which is a total addressable market of $70MM per year.
Adjacent markets increase our market opportunity substantially - see "Expansion" below.
Rapid Growth As of Q2 2019 tinyB’s revenues have grown 120% over the same period in 2018.
A large local market Silicon Valley’s largest, wealthiest companies have a need for employee events. We estimate that we’ve addressed less than 1% of the overall market.
High margins Our gross margins today are 65% and we are confident they will rise above 70% once we hire full-time staff.
Low cost of sales We have developed a way for our prospects to have a first hand experience of tinyB for a small fraction of a typical business-to-business sale.
It’s fun! Clients, employees and the media like to be involved with a company that's fun, which makes it easier to sell, hire and spread the word.
Our market today is Executive Administrators in the top 150 tech and biotech companies in the Bay Area. We estimate that we have served less than 1% of this market.
We will expand in several ways:
+ Offer new services to our current market, enabling existing clients to treat their team to multiple tinyB events in the same year
+ Target other titles: HR, Employee Experience Managers and Recruiters
+ Market our services to thousands of smaller companies in the Bay Area
+ Market our events to corporate Event Marketers as an in-booth experience at trade shows. We have executed two such engagements and they have been very successful.
Each of these new approaches will increase our revenue potential substantially. As an added benefit, selling to Marketing teams will diversify our risk since we will be a marketing expense, rather than an employee benefit.
Our goals are 100% growth in 2019 and 2020, then 75% growth in the next 3 years.
We are currently ahead of our target: as of the end of Q2 of 2019, our revenue is up 120% from the same period in 2018.
We want to attain break-even by the end of 2020 and generate over $7,000,000 in revenue with EBITDA (net profits) margin of over 45% by the end of 2023. High net margins are within reach for tinyB because gross margins are 65% now and are projected to be over 70% once we hire full time staff in 2020.
Our goal is to build a highly profitable, high growth business and position it for acquisition in five years for $25MM or more.
We would like to return 10x to our current investors, with a minimum of 5x. However, returns are not guaranteed.
A Comparable Company
Paint Nite, an event company which sells mainly to women, attained 3-year growth of 1,970% and $65,000,000 in revenues. Their profile is similar in many ways:
+ high margins and low up-front investment
+ very high growth
Interesting to note that their event has not changed substantially over the years.
Future Valuation
We engaged Stout, a national firm focused on company valuation, to analyze our potential future value in 5 years. For details on Stout, please see their website: www.stout.com.
NOTE: the following is for corporate research purposes and should not be construed as investment advice.
We asked Bryce Geyer, a Managing Director, to estimate the value of the company 4 1/2 years from now, at the end of 2023, using our projections as a starting point.
The detail of the analysis are in the Q&A, with attachments as references.
The conclusion was that if we attain our projections, an investor in this round would see a 8.8x return on investment. If we fall short it would be 6x return and if we beat our targets, a 9.5x return.
tinyB chocolate has financial statements ending December 31 2018. Our cash in hand is $94,224.95, as of July 2019. Over the three months prior, revenues averaged $26,900/month, cost of goods sold has averaged $11,200/month, and operational expenses have averaged $39,300/month.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes and other financial information included elsewhere in this offering. Some of the information contained in this discussion and analysis, including information regarding the strategy and plans for our business, includes forward-looking statements that involve risks and uncertainties. You should review the "Risk Factors" section for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
Overview
We create experiences that are so fun people open up and connect with each other. Our focus is providing team building events for Bay Area high tech companies which want to give their employees something special.
We want to be the premier provider of fun, bonding experiences in the Bay Area.
Milestones
tinyB chocolate LLC was incorporated in the State of California in August 2014.
Since then, we have:
Historical Results of Operations
Related Party Transaction
Refer to Question 26 of this Form C for disclosure of all related party transactions.
Liquidity & Capital Resources
To-date, the company has been financed with $275,000 in debt and $100,000 in convertibles.
After the conclusion of this Offering, should we hit our minimum funding target, our projected runway is 12 months before we need to raise further capital.
We plan to use the proceeds as set forth in this Form C under "Use of Funds". We don’t have any other sources of capital in the immediate future.
We will likely require additional financing in excess of the proceeds from the Offering in order to perform operations over the lifetime of the Company. We plan to raise capital in 6 months. Except as otherwise described in this Form C, we do not have additional sources of capital other than the proceeds from the offering. Because of the complexities and uncertainties in establishing a new business strategy, it is not possible to adequately project whether the proceeds of this offering will be sufficient to enable us to implement our strategy. This complexity and uncertainty will be increased if less than the maximum amount of securities offered in this offering is sold. The Company intends to raise additional capital in the future from investors. Although capital may be available for early-stage companies, there is no guarantee that the Company will receive any investments from investors.
Runway & Short/Mid Term Expenses
tinyB chocolate LLC cash in hand is $94,224.95, as of July 2019. Over the last three months, revenues have averaged $26,900/month, cost of goods sold has averaged $11,200/month, and operational expenses have averaged $39,300/month, for an average burn rate of $23,600 per month. Our intent is to be profitable in 18 months.
Our expenses from June to August will be unusually high due to construction costs associated with building out a production facility. June was an unusually weak month, followed by July which was the second strongest this year. The cost of the buildout for the facility was covered outside of this raise.
We are entering our busiest and most profitable time of the year. Q4 usually brings in as much revenue as the rest of the year combined. We will incur some additional expenses to purchase ingredients and equipment and we believe that this will be partially offset by pre-payment for services. We hope (although cannot guarantee) to end 2019 with about $680k of revenue for the year, and about $660k of expenses.
1 | Our clients are predominantly large high tech and biotech companies in Silicon Valley. Any economic event that causes a significant negative impact on these industries will also impact our company. |
2 | In order to continue our rapid growth, we will need expand and diversify our services, the markets we serve or both. Although there are exceptions, a given decision maker (ie a team or department) will not purchase an identical event for a team for several years after an initial event. |
3 | We must manage our cash flow carefully, taking into account potential seasonality both in terms of slower demand for our services during summer and a peak in demand during the Holidays. |
4 | Renata, the company's Co-Founder and Chocolatier, possesses unique skills in creating the look and feel of the company's identity, its presence in social media and its continually evolving flavor selection. Any event preventing her from continuing her duties would harm the company. |
5 | Andrei, the company's Co-Founder, has accumulated valuable insights into our clients and market and would be difficult to replace if any event were to prevent him from continuing his duties. |
6 | The Company may never receive a future equity financing or elect to convert the Securities upon such future financing. In addition, the Company may never undergo a liquidity event such as a sale of the Company or an IPO. If neither the conversion of the Securities nor a liquidity event occurs, the Purchasers could be left holding the Securities in perpetuity. The Securities have numerous transfer restrictions and will likely be highly illiquid, with no secondary market on which to sell them. The Securities are not equity interests, have no ownership rights, have no rights to the Company’s assets or profits and have no voting rights or ability to direct the Company or its actions. |
7 | Our future success depends on the efforts of a small management team. The loss of services of the members of the management team may have an adverse effect on the company. There can be no assurance that we will be successful in attracting and retaining other personnel we require to successfully grow our business. |
Director | Occupation | Joined |
---|---|---|
Ilya Druzhnikov | CEO and Founder @ Exit VR | 2016 |
Andrei Stoica | Co-founder @ tinyB chocolate LLC | 2014 |
Renata Stoica | Co-founder @ tinyB chocolate LLC | 2014 |
Officer | Title | Joined |
---|---|---|
Andrei Stoica | Co-Founder | 2014 |
Renata Stoica | Co-Founder | 2014 |
Holder | Securities Held | Voting Power |
---|---|---|
Andrei Stoica | 20,000,000 Common Units | 50.0% |
Renata Stoica | 20,000,000 Common Units | 50.0% |
Date | Amount | Security |
---|---|---|
07/2019 | $25,000 | Loan |
07/2016 | $100,000 | Convertible Note |
12/2016 | $250,000 | Loan |
Lender | Issued | Amount | Oustanding | Interest | Maturity | Current? |
---|---|---|---|---|---|---|
Main Street Launch (SBA loan) | 12/16/2016 | $250,000 | $210,000 | 9.5% | 12/16/2026 | Yes |
Vladimir Stoica | 07/15/2019 | $25,000 | $25,000 | 12.0% | 07/15/2024 | Yes |
Name | Vladimir Stoica |
Amount Invested | $25,000 |
Transaction type | Loan |
Issued | 07/15/2019 |
Outstanding principal plus interest | $25,000 as of 07/2019 |
Interest | 12.0 per annum |
Maturity | 07/15/2024 |
Outstanding | Yes |
Current with payments | Yes |
Relationship | Father |
$100,000 | 70% toward new production facility, 22.5% sales & marketing (specifically testing of LinkedIn and partnerships), 7.5% Wefunder intermediary fee |
$400,000 | 25% toward new production facility, 10% toward sales & marketing (specifically testing of LinkedIn and partnerships), 20% officers' salaries, 37.5% operating capital, 7.5% Wefunder intermeidary fee |
Class of Security | Securities (or Amount) Authorized |
Securities (or Amount) Outstanding |
Voting Rights |
---|---|---|---|
Common Units | 20,000,000 | 4,000,000 | Yes |
The Securities and Exchange Commission hosts the official Form C on their EDGAR web site.
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