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Business Minds R&D
EMPOWERING YOUR LEADERSHIP, GROWTH & COMPLIANCE
Overview
Mr. Crowd
07/24/2018
10/31/2019
$100
Equity - Common
RegCF
$7.50
$7,500,000
2013
Business Services, Software, & Applications
Non-Tech
Sandy, Utah
Summary Profit and Loss Statement
| FY 2017 | FY 2016 | |
|---|---|---|
|
Revenue |
$725,721 |
$559,056 |
|
COGS |
$23,126 |
$23,665 |
|
Tax |
$0 |
$0 |
| ||
| ||
|
Net Income |
$51,047 |
$86,489 |
Summary Balance Sheet
| FY 2017 | FY 2016 | |
|---|---|---|
|
Cash |
$42,355 |
$18,905 |
|
Accounts Receivable |
$0 |
$0 |
|
Total Assets |
$56,055 |
$18,905 |
|
Short-Term Debt |
$2,410 |
$968 |
|
Long-Term Debt |
$0 |
$0 |
|
Total Liabilities |
$2,410 |
$968 |
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Summary
Today we are taking a look at a recently released crowdfunding raise taking place over at Mr. Crowd: Outlook Corporate Consulting, LLC. The company started the business in 2013 and changed its name to Business Minds R & D in 2015.
Business Minds R&D offers customized training programs for businesses. The services provided range from sales training, CEO and leadership training, and customer service training to small business training. The training and workshops are based on principles to help people develop new skills and perform to the best of their abilities.
The company boasts of specialized training consultants who are skilled in working on emotional intelligence training needs of an organization and its employees. Business Minds R&D focuses on training the sales personnel, CEOs, top management, and customer service associates for them to provide better and high-quality services to their clients.
However, despite its laudable vision, the company falls under our underweight deals radar. Business Minds R&D has been in business for more than five years, yet it has not been able to generate significant revenue growth or profits.
Additionally, Business Minds R&D operates in a highly competitive space. The company has had to offer fee levels that are not commercially viable, hence its low revenues.
Below we look more closely at Business Minds R&D’s crowdfunding raise. In particular, we focus on the commercial viability of the business in question and its viability as an investment.
Other
The business of Business Minds R&D is based on providing emotional intelligence training to its clients for them to perform their job responsibilities at a higher level – particularly in sales. However, in our estimation, the business fails to offer anything truly unique or patentable.
There are hundreds of other training academies that provide similar training and workshops. Business Minds R&D does not fulfill the basic premise of being a unique platform. The company teaches sales techniques, time management, communication skills, and presentation skills. Even if one assumes a quality method and effectiveness as trainers, it’s hard to imagine such a business growing by leaps and bounds – it is not scalable and by all means human intensive.
Financials and Valuation
utlook Corporate Consulting was founded in 2013. In spite of being in the business for more than five years, the company reported revenues of $725,721 and net income of $51,047 for the most recent fiscal year ended December 31, 2017.
In fact, compared to the prior fiscal year ended December 31, 2016, net income showed a downward trend from $86,489 to $51,047. Receding profitability does not make for a promising early-stage investment that has no tech-driven differentiation or ability to scale.
In spite of this, Outlook Corporate Consulting’s funding round lists a pre-money valuation of $7.5 million – a bit high in our view. A business in this space will likely only be acquired at a 1X on revenue or a 1X on net income. Both get you to a valuation of $500K to $1M. Getting a return at the current valuation seems unlikely.
Management Experience
Another significant concern regarding Business Minds R&D is the team behind it. James Utley, President, and Adam Robison, CEO, are both passionate individuals. However, they lack the required experience in the sales training field. James was in the log furniture business until 2007 while Adam has extensive experience in selling life insurance and financial services.
Rating
Due to a lack of competitive differentiation, weak financial results, and presence in a highly competitive industry, we are assigning Outlook Corporate Consulting our Underweight Deal rating.
The coaching and training industry in the United States is highly competitive. A Google Search for “Business Sales Coaching” yields more than 185 million results. At best, this is a local business that will have a hard time scaling beyond its home market.
At a $7.5 million valuation we remain unenthusiastic as to the chances that investors will receive a return on their investment.
If you have any questions regarding the underweight rating of Outlook Corporate Consulting, you can reach us at hello@kingscrowd.com or learn more about our due diligence methodology here.
Analysis written by Sean O’Reilly on March 1, 2019.