Are investors backing more post-revenue companies?

CHART OF THE WEEK 📈

By Léa Bouhelier-Gautreau | Read

We looked at the funds invested in Reg CF and Reg A+ equity deals that hit their minimum in the last 12 months and made some interesting discoveries:

• The median amount raised by pre-revenue companies ($151k) is higher than post-revenue companies with $1-$250,000 in revenues ($103k-$138k).

• Many exciting deep tech or pharma companies are raising pre-revenue and may be able to attract large sums from investors.

• Once the $1 million annual revenue threshold is surpassed, the median amount invested in deals jumps by 2.5x, indicating higher investor confidence in these companies.

• However, the average amount invested doesn’t significantly increase until surpassing roughly $2.5 million in revenues. Thus, while investors are more willing to invest in companies with over $1 million in revenues (according to the median), the average amounts raised do not significantly increase until the $2.5 million revenue threshold.

Q3 Demo Day Announcement

Join us for our next KingsCrowd Demo Day of Summer 2024 on Wednesday, July 17th at 1pm ET, sponsored by Atlas Rd. Dive into the latest innovations as top-tier startups pitch their groundbreaking solutions. Witness firsthand the entrepreneurial spirit as founders showcase their businesses in technology, healthcare, and beyond. Don't miss this opportunity to engage with pioneering leaders and discover investment opportunities shaping the future. Mark your calendars for an afternoon of inspiration by registering below!

PITCH REVIEW 💸

By Olivia Strobl \ Deal Report

Brief: Sensate is carving a niche in the wellness technology market with a new approach to stress relief. The company's flagship product leverages the power of sonic resonance to provide immediate calm to the body's nervous system. The device emits soft vibrations over the chest area while synchronized soundscapes are played through an accompanying app, creating an immersive relaxation experience.

Key People: Sensate is led by CEO Anna Gudmundson and Inventor Stefan Chmelik, whose combined expertise has positioned the company as a promising player in the wellness industry. Gudmundson, despite being a first-time founder, has high-level managerial experience as a turnaround CEO at a wellness company. Stefan Chmelik, the inventor behind Sensate's technology, contributes a wealth of experience, with 26 years in the clinical wellness space.

Summary

Here's what we like: With a product that delivers stress relief and relaxation in a mere ten minutes, Sensate addresses a universal need in today's fast-paced world. The company's ability to generate $5.32 million in revenues in 2023 speaks volumes about the product's market acceptance and demand. The device's accolade as one of TIME's Best Inventions of 2022 further validates its impact and potential in the wellness market. Additionally, one of Sensate's most compelling strengths is its global reach. The product is currently sold in over 50 countries, significantly expanding potential market share.

Finally, backing from venture capital investors, including notable names such as TenOneTen, Unlock, Incisive, Expert DOJO, and Dangerous, provides Sensate with the guidance and support necessary to fuel its growth and expansion efforts. 

Here's what we don't: Sensate’s current financial position indicates high risk, with a significant monthly burn rate of $322,106 contrasted against a cash position of $516,068. This high burn rate relative to available cash suggests a very limited runway. It is also crucial to note that the company experienced a slight revenue decline of 3.19% from the previous fiscal year. This decline, though modest, underscores the importance of closely monitoring sales trends and market demand moving forward.

Furthermore, Sensate operates in a market with plenty of more accessible competition. At $299 per device, Sensate may be inaccessible to price-conscious customers. Calm, Headspace, and other meditation apps offer a cheaper alternative for a large market share. Though they do not provide an identical solution, these apps may be the only option for customers in their price range.

LAST WEEK’S POLL RESULTS

Would you invest in Get On Board?

🟨🟨🟨🟨🟨⬜️ 👍 (48)

🟩🟩🟩🟩🟩🟩 👎 (52)

100 Votes

🎙 INSIDE STARTUP INVESTING

By Sam Fiske \ Listen

In this episode,  Chris talks with Leigh Colby, founder and CEO of TriAgenics, a company on a mission to eliminate the pain and complications associated with wisdom teeth. Leigh, a seasoned dentist and entrepreneur, dives into how his new technology can prevent wisdom teeth from ever developing in children, which could transform dental care practices. Leigh's commitment to changing the standard dental procedure by 2030 is underscored by his decision to step down for a go-to-market CEO to ensure the technology reaches its full potential.

STAFF PICKS 🌶️

ISI Sports

Bringing racing and sportsbooks to the customers with a self-service kiosk that fits right on any main casino floor and takes up only 3ft by 3ft per unit. The kiosks give full access to app sports propositions and pari-mutuel horse racing and include tools for easy compliance with currency transaction reports and book wagering reports, and they’re ADA-compliant. Place the kiosk near bars, gaming pits, slot machines, casino cages, or any high-traffic area and eliminate the need for additional employees or expensive remodeling.

• Pre-Money Valuation: $15.5 million

• Minimum Investment: $1,001

Nutrithority

The company provides high-quality health supplements that help enhance individuals' health and performance. Nutrithority’s range of supplements meets the diverse needs of fitness enthusiasts at all levels and provides optimal well-being. An experienced team leads the company and prioritises sustainability and ethical practices in all its operations.

• Pre-Money Valuation: $7 million

• Minimum Investment: $100

Querio

Software for AI-driven data analytics that provides answers with accuracy and speed, regardless of how complex the question is. Querio helps users integrate all their data sources and churn out accurate and simple analysis quickly without the need for any codes. The company’s MVP has delivered a ten times performance improvement for early adopters and has a qualified pipeline of $800,000 ARR. 

• Valuation Cap: $10 million

• Minimum Investment: $100