|1||Founder was C-level exec and on IPO of Shopping.com with Goldman and sale to eBay for ~$675 million.|
|2||POST COVID-19. The status quo is over. Practitioners will NOT want overhead or fixed costs.|
|3||Large (~$12 billion) and fast growing market segment (10%+ CAGR).|
|4||In similar aesthetic markets, like hair care, it is ~20% rental.|
|5||Ideal characteristics for "cloud" business; rentable, scalable and on-demand.|
|6||Lead investor, Dr. Mike Tantillo: Plastic surgeon, MD/MBA and a multiple location spa owner.|
|7||Patient/Practitioner relationship is ideal for rental; practitioner owns the patient relationship.|
Vansanity satisfies a market need in the large and rapidly growing aesthetic medicine sector. Parallel to the ever-increasing demand for aesthetic services, is the increasing number of practitioners who wish to enter the market. Vansanity removes a significant barrier to entry for these practitioners, namely upfront capital expense. Vansanity makes occupancy and equipment a COS thus freeing the practitioner to focus on professional development and customer acquisition. Practitioners are freed to pursue their passion.
Vansanity in turn leverages the capital expenses associated with a medical aesthetics business over many providers. Low HR and supply chain costs translate into profitibiity at comparatively low use rate; approximately 8% as compared to the 40% facilities use rate typical in the medical sector. Efficient asset utilization to empower individuals makes for, in my opinion, a winning business model.
No business succeeds without a winning team; the attached bios speak for themselves. Iggy is a proven winner who has brought together a synergistic team. Blake, Danny, and Iggy bring together three important perspectives and work very well with each other. I am confident in their abilities to grow the company to national, or international, scale.
It begins in 2017, while my family (Iggy/founder) was still in the Bay Area (Mill Valley). At first, I was alone looking at this problem.
One of our closest family friends is an orthopedic surgeon in the Bay Area. Over many conversations and cocktails, he explained the travails of both starting and developing a medical practice. He tried it alone, with a small group and with a sponsoring hospital, and even some combinations of those. It worked partially but never really brought him the income and flexibility and control he had sought alongside the joy he experienced while practicing medicine.
I "knew" that if I could find the right vertical and the right model, we might be able to change things.
Medical vertical must-haves: Consumer pay (insurance reimbursement was too big a problem to tackle); critical mass, high growth rate, high margins (our opportunity). Result: non-invasive and minimally invasive medical aesthetics.
Demand is large and growing quickly. The US total addressable market (TAM) stands at $7 billion while the global TAM stands at $12.5 billion with CAGR at 11.5%. The supply of practitioners is growing as well.
We considered a subscription model and ran it by various industry and financial professionals. The response was intriguing (and perhaps polite), but not the surprise and delight you want to hear with a really good idea. Subscriptions sounded interesting, but they told me to consider facilities sharing. In fact, one of the people I asked about the concept was the new buyer of my home. The husband was part of the founding team of WeWork and the wife was a 10+ year veteran as a dermatology assistant. The wife told me that at her previous practice (NYC) of 2 owner/MDs and ~18-20 employee/MDs, ~90%(all but 2) of the employee/MDs had directly asked her if her husband (and/or WeWork) would consider a WeWork for medical aesthetics. That led us on the path to Vansanity, which expanded well beyond facilities to the "Cloud Med Spa" model we have today.
MOVED TO BOSTON AREA FOR FAMILY REASONS! Fortunately, it's a national problem and solution.
I sought out more industry experts and professionals that were living this every day. I wanted to not only hear/see/feel that the problem was real and the solution viable, but I also wanted to see if these same folks would devote substantial time AND money (as investors) to this solution.
WOW! The response was amazing.
All my team joined up either part-time or full-time and anyone who was accredited (legal) invested $15-200k. Danny, Blake, John, Mike, and Rachel all joined and we had the beginnings of a team and a full Seed financing. Ciro wasn't an industry expert, but the perfect client-facing business partner.
Now we needed space, architects, contractors, lawyers, bank accounts, lasers, chairs .... fortunately, we had just about every challenge covered in terms of real-life experience between one or a combination of us.
From July 2018 through March 2019, with help of an advisor and my long-time friend (Emily Ou and Greg Hylton, Cushman Wakefield partner) we visited dozens of potential properties, interviewed architects and contractors, negotiated leases and terms and finally signed in late March.
Construction went smoothly (thanks Rob, Eric, and teams). By the end of September 2019, we had finished construction and had our certificate of occupancy.
October 2019 we took our first customers/members, bookings and revenue. The roller-coaster begins!
Vansanity has financial statements ending December 31 2019. Our cash in hand is $182,948, as of March 2020. Over the three months prior, revenues averaged $2,963/month, cost of goods sold has averaged $0/month, and operational expenses have averaged $47,000/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.
We rent space and machines to med spa professionals on an hourly basis so they have little or no fixed costs or overhead. We remove fixed investment and location risk from their business.
We hope to be in 25+ locations and > 250,000 sq ft in large affluent metros throughout US/abroad; generating $400-500/sq. ft. in EBITDA on a unit economics basis.
Vansanity, Inc. was incorporated in the State of Delaware in September 2018.
Since then, we have:
Historical Results of Operations
Our company was organized in September 2018 and has limited operations upon which prospective investors may base an evaluation of its performance.
Liquidity & Capital Resources
To-date, the company has been financed with $1,250,000 in SAFEs.
After the conclusion of this Offering, should we hit our minimum funding target, our projected runway is 6 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
Vansanity, Inc. cash in hand is $182,948, as of March 2020. Over the last three months, revenues have averaged $2,963/month, cost of goods sold has averaged $0/month, and operational expenses have averaged $47,000/month, for an average burn rate of $44,037 per month. Our intent is to be profitable in 12 months.
Bookings and revenues have grown from $1,068 in Dec 2019 to $5,577 in Feb 2020. AIM (Aesthetics Institute of MA and ourselves have parted ways as partners, but the partnership did not lead to any new customers.
We have come to agreement with Evolus to co-market their services (Botox competitor) to our practitioners while they market Vansanity's facilities sharing services to their Greater Boston (and other geographies as we add them) to their practitioner clients.
In the 3 - 6 months following the raise, we expect (but cannot guarantee) that expenses will remain stable as we will not add other FTEs until we reach ~$30-40k in monthly revenues. At that point we may need to hire full-time or part-time help with site management work-load. Retention has been very high and our top clients are booking more and more rooms and procedures each month/quarter. We believe that revenues will trend higher as we add members, bookings and treatments.
In the future we may face an inability to continue to operate in the location on 500 Commonwealth Ave due to material adverse changes in our operations or structural integrity damage to the building
Changes in MA (or other state where we would operate in the future) law that adversely affects the ability for our practitioners to operate in a shared facility or for those practitioners that are NOT medical doctors to continue to practice as non-MDs
We may face an inability to raise sufficient capital to fund operations, necessary capital equipment or other expenses to remain competitive.
We may not be able to market to our potential clients effectively and attract enough practitioners to our service.
Large well-capitalized competitors may be able to underprice our offering and make our operations unprofitable
Large pools of capital (e.g. SoftBank Vision Fund) could give extraordinary amount of funds to a smaller or nascent competitor and make us a riskier investment for other potential investors
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.
Blake Moser is a part-time officer. As such, it is likely that the company will not make the same progress as it would if that were not the case.
Iggy fanlo, FOunder & CEO is a key man. If for any reason, he is not able to continue in his duties as CEO or C-level executive, it could have a material negative effect on the success of the company
We face a risk that Practitioners en masse may decide that Vansanity's offerings are not acceptable or are inadequate or not properly priced.
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.
In March 2020, COVID-19 was declared a worldwide health pandemic and has had a significant impact on the national and global economy. The ultimate impact of COVID-19 on the Company's financial statements is unknown at this time.
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