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For Good Causes

Platform:
Crowdcube
Stage:
Seed
Industry:
Environmental & Ethical
Location:
UK - South East
Date Rated:
18/09/17
Raise:
£250,000
Equity:
18.13%
Valuation (Pre Money):
£1,128,930
Industry: Environmental & Ethical
Location: UK - South East
Platform: Crowdcube
£250,000 Seed
Valuation: £1,378,930
Date Rated: 11/09/17

MANAGEMENT

PRODUCT

INVESTMENT
Tax Status: SEIS

Business Summary

For Good Causes (FGC) is a platform allowing consumers to donate their accumulated loyalty points/air miles/etc to their choice of charity, where otherwise these rewards might go to waste. FGC will take a commission of 10% of donations. Launch partners include cash rewards site Quidco, and 5 charities including Walking with the Wounded and Prostate Cancer UK. These funds will be used to launch the service later this year and to begin sales and marketing activities.

Financial Overview

Year 3
Date (y/e) Pre-Launch Pilot Year 1 Year 2 Year 3
Sales Pre-Launch- Pilot£51,000 Year 1£6,684,000 Year 2£23,223,000 Year 3£38,286,000
Gross Profit Pre-Launch- Pilot£4,000 Year 1£545,000 Year 2£2,192,000 Year 3£3,560,000
GP as % sales Pre-Launch0% Pilot8% Year 18% Year 29% Year 39%
Overheads Pre-Launch£85,000 Pilot£135,000 Year 1£923,000 Year 2£1,122,000 Year 3£1,153,000
Operating Profit Pre-Launch-£85,000 Pilot-£131,000 Year 1-£378,000 Year 2£1,070,000 Year 3£2,406,000
OP as % sales Pre-Launch0% Pilot-257% Year 1-6% Year 25% Year 36%
Closing Cash Pre-Launch- Pilot- Year 1- Year 2- -

Note: This financial information has been sourced from the company on 11/09/2017 or from public sources. Financial data is NOT verified by Wheatfromchaff Ltd.
87%
SKILLS:
EXPERIENCE:
COMMITMENT:
FGC's team covers all the key roles, and team members have been recognised for their skills and experience.
There is a wealth of relevant experience on the team, with almost all members having worked on loyalty schemes at major brands before.
Many on the team seem to have other business concerns, but these shouldn't be a significant drain on their attention and in many cases represent possible partners for FGC.
60%
MARKET:
PRODUCT:
COMPETITION:
With £7bn sitting in rewards accounts there's a lot of potential good that could be done in the UK's £10bn charitable donation market.
Development of the FGC service continues, but key launch partners are signed up and the service should go live by the end of the year. Eventually, data monetisation will add further value.
Many schemes already allow donation of rewards but FGC would be the first to give a free choice. While FGC is less economical than simply donating, it is better than most alternative methods.
60%
PROFITABILITY:
CASHFLOW:
RETURNS:
FGC's business plan shows them to be highly profitable but also indicates that they approach UK market saturation after 5 years as growth falls to under 10%.
There is insufficient information available to fairly rate this aspect of the business
FGC expects an exit after the 5th year of trading. With a further round planned soon for an undisclosed amount, investors should remember their pre-emption rights (expensive though they are).


Conclusion

For Good Causes is lead by an experienced and knowledgeable team. Having partnered with organisations such as Quidco and the Charities Trust pre-launch is encouraging as it demonstrates that they really will be able to offer consumers unfettered choice in who they can donate to and that they can negotiate with established reward scheme operators.

The base proposition of taking a 10% cut of donations should be fairly profitable as transaction costs will be a fraction of that amount. While asking people to donate value is a tricky sell, offering a lower-friction method for people who are already interested in donating benefits the donor, the retailer, the charity and FGC.

Related Links

Crowdcube Pitch

www.forgoodcauses.org

 

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