Golfkicks

Early Stage

Transform sneakers into golf shoes

Analytics

Raised to Date: Raised: $132,563

Aggregate Commitments $

Platform

Republic

Start Date

04/30/2021

Close Date

09/15/2021

Min. Goal

$25,000

Max. Goal

$1,070,000

Min. Investment

$100

Security Type

SAFE

Funding Type

RegCF

Series

Series A

Valuation Cap

$12,000,000

Discount Rate

0%

Rolling Commitments $

Status
Funded
Reporting Date

09/19/2021

Days Remaining
Funded
% of Min. Goal

530%

% of Max. Goal

12%

Likelihood of Max
Funded
Avg. Daily Raise

$961

Momentum
Funded
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Location

Denver, Colorado

Industry

Apparel & Fashion

Tech Sector

Non-Tech

Distribution Model

B2C

Margin

Medium

Capital Intensity

Low

Business Type

Growth

Golfkicks, with a valuation cap of $12 million, is raising funds on Republic. The company makes addable spikes that can turn any sneakers into golf shoes. The DIY spikes can be mounted to the soles of almost any sneakers to play golf in comfort and style. Tyler Stuart, John Krosky, and Matt Mockus founded Golfkicks in October 2020. The current crowdfunding round has a minimum raise of $25,000 and a maximum raise of $1,070,000, and the funds will be used to expand globally, launch new partnerships, and meet demands in new markets. Golfkicks has generated $1.09 million in TTM revenues with a gross margin of 55%. The product is the number one bestseller on Amazon, with over 25,000 customers.

Summary Profit and Loss Statement

Most Recent Year Prior Year

Revenue

$909,155

$358,160

COGS

$404,993

$190,650

Tax

$0

$0

 

 

Net Income

$-23,924

$-135,628

Summary Balance Sheet

Most Recent Year Prior Year

Cash

$135,391

$59,208

Accounts Receivable

$1,274

$689

Total Assets

$313,311

$59,897

Short-Term Debt

$104,984

$408,539

Long-Term Debt

$78,729

$0

Total Liabilities

$183,713

$408,539

Financials as of: 04/30/2021
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Ratings

Analyst Report

Synopsis

Golf is somewhat notoriously considered a “rich man’s game,” popular among business people and politicians alike. Indeed, it has been a pastime of 17 of the last 20 US presidents. The sport requires less in the way of sustained physical exertion on the body, making it ideal for older players, and is suitable for both networking and recreational purposes.

That’s not to say that politicians are the only ones who enjoy the game. In 2019, 24.3 million Americans participated in golf. However, it is among the most difficult hobbies to get into — often for fiscal reasons. Golf courses are by necessity quite expansive, well-maintained, and can sustain relatively few golfers at a time in proportion to the space they take up. As a result, memberships tend to be expensive. A bottom-tier club membership costs around $200 per month, and higher-end memberships can run as high as $10,000 with one-time initiation costs around $100,000. That doesn’t take into account other costs, such as for clubs, balls, shoes, and the price of individual rounds. 

Golfkicks is expanding access to its namesake for a new generation of fashion-conscious, economically-conscious consumers. Any golfer knows the importance of solid, dirt-gripping traction when swinging the club. Part of why good golf shoes are so expensive is because they need to properly anchor the golfer in place to keep them safe.

Golfkicks has introduced addable spikes to the market, which can be mounted to the soles of nearly any sneakers. These traction kits can transform everyday, fashionable streetwear into ready-for-action golf shoes. The modified shoes aren’t just good for golf, but also for any other sport where good traction is essential, like baseball. The product has appeared on Shark Tank and reached the coveted spot of top best seller on Amazon’s golf spike section.

Golfkicks’s current Republic raise has been rated a Deal to Watch by the KingsCrowd investment team.

Price

To expand its operations to global markets, secure new partnerships, and meet existing demand, GolfKicks is raising capital through a SAFE at a $12 million valuation cap with no discount. This is a little bit on the high side, considering the startup’s revenue multiple of around twelve times. Regardless, the valuation isn’t unreasonable given the startup’s good traction. Thus, Golfkicks’ price score is above average.

Market

Golfkicks isn’t confining its business to the biggest golf-obsessed countries like Scotland and the US. It is tapping into a global golf shoes market that will reach a value of $8.5 billion in 2022. The company estimates around 20% of today’s golfers don’t use specialized golf shoes. That said, the market’s growth is tepid. Given that the spikes aren’t just applicable as a golf accessory but for other sports as well, Golfkicks might also capture some additional share of the $98 billion athletic footwear market.

Golfkicks does sell directly to consumers through Amazon and Shopify, as well as through partnerships with Pride Sports and boutique retail partnerships in Japan, South Korea, and France. Balancing the company’s global reach against the market’s slow growth, the market score for Golfkicks is middle of the road. 

Team

Golfkicks is run by a three-person co-founding team of serial entrepreneurs. CEO Tyler Stuart is the inventor of the Traction Kits as well as Sushi Roll by Fishpond. After getting started in sales and account management, Stuart leapt into the startup game as co-founder of Format Dynamics in 2003, a business building connections between advertisers and consumers. He built up Format over nine years before shifting to co-found HANDLL, which occupied a similar space. During that time, he also founded a website for outdoors activities called Wildmans.com and is developing Roamer, an augmented reality (AR) platform for storytelling about locations in the real world.

Co-founder and COO John Krosky is a self-professed “idea guy.” He holds a BA in journalism from the University of Northern Colorado. Like Stuart, Krosky has roots in the advertising business. He first worked with Stuart at Format Dynamics for a few years before moving to promote another startup, MyMobileCE.com, a mobile education application. He stayed in the sales space for the next several years, in roles with New Hope Natural Media and Altitude Digital, until teaming up with Stuart again for Golfkicks.

Matt Mockus co-founded Golfkicks with Krosky and Stuart but appears to be largely hands-off at this point, focusing on his role leading a small advertising agency in Denver, ifficient. Mockus holds a BBA in marketing from the University of Iowa and like his co-founders, has many years of sales experience with smaller companies. So far, the team overall has remained small and limited to its founders, though that may change as it expands its markets.

While none of these three co-founders have direct experience with sports or golf, they do bring skills in sales and marketing. There is also previous entrepreneurial experience, a boon to the company. Due to these reasons, the team score for Golfkicks is above average.

Differentiators

Existing golf shoes do technically compete with Golfkicks. When it comes to golf spikes, though, Golfkicks is the undisputed lead seller, which makes it a leader in the market. It has not secured this dominance not through product defensibility — the product’s patents are still pending — nor by going cheap. The company instead succeeded through focusing on product quality and providing whole kits to consumers. Thanks to its product being first-to-market, Golfkicks has managed to establish itself firmly in a dominant role. Therefore, the company’s differentiators score is its highest across all five metrics.

Performance

If 2020 was a hard year for most businesses, Golfkicks has certainly not felt that pain. Revenue dramatically jumped from $358,160 in 2019 to $909,155 last year. Its cost-of-goods-sold (COGS) rose from $190,650 to $404,993 over the same period. The product is selling at 55% gross margins. Despite this remarkable growth, the business is still in a pre-profit stage. However, it used its impressive earnings to pay down more than half its existing liabilities (going from $408,539 to $183,713 in debts owed) and converted some of it from short- to long-term debt. As it stands now, Golfkicks is in excellent financial health. Its performance score is strong in reflection of these factors.

Risks

There are some concerns that the golf market is showing anemic growth, and the company’s various team members are involved in other businesses. In addition, while Golfkicks has paid down significant debt, there remains yet more debt outstanding. However, Golfkicks’s biggest threat comes from its competitors. While its status as current market leader is enviable, a much larger competitor with the capability to outsource might be able to undercut Golfkicks with a cheaper product. The mechanics of the spikes are not complex and could be readily replicable. A single pending patent may not be enough to fend off inevitable imitators forever.

Bearish Outlook

The product has a distinct defensibility blindspot. Especially as Golfkicks expands into growing Asian markets, it seems nearly certain that cheaper imitations from foreign brands are likely to crop up. If they do, this new competition will become a threat to Golfkick’s market share. While the startup’s rise has been nearly meteoric, investors may not see such revenue spikes continue if cheaper competition begins to flood the market. 

Bullish Outlook

Despite potential imitator woes down the line, Golfkicks has achieved remarkable results thus far. The startup has generated excellent traction with partners and consumers. A number-one Amazon best seller rating is a truly impressive achievement. It has also demonstrated a capability to deploy capital efficiently, maintaining a lead on its debts. Assuming the business remains lean, disciplined, and ahead of the market, it could sell many more millions worth of traction kits and provide a healthy return to investors.

Executive Summary

Golfkicks believes that golf should be open to economically- and fashion-conscious consumers. To that end, it is selling traction kits — golf spikes that screw into the soles of conventional sneakers and other kinds of footwear. These kits turn ordinary shoes into functional golfing footwear, enabling golfers to surpass the expense and drollery of traditional golf shoes.

Thanks to outstanding early traction, Golfkicks has brought a first-to-market, patent-pending offering to consumers through partnerships with Amazon and Shopify. The company is expanding across European and Asian markets and plans to expand beyond golf-oriented sales into other sports like baseball.The product’s simple design makes it vulnerable to off-brand imitators in the near future, and the product itself might damage the shoes it modifies. However, the company is in excellent financial health and demonstrates potential for significant scalability. For these reasons, Golfkicks has been rated a Deal to Watch.

For questions regarding the KingsCrowd staff pick or ratings for this company, please reach out to support@kingscrowd.com.

Analysis written by Benjamin Potts.

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