Invest in How Ecommerce Responds to Post-Pandemic Shopping.

Heyyyo,

So, I just plugged back in — only to see the world on fire 🔥 needless to say, I immediacy unplugged and wrote this email completely offline.

Housekeeping notes, I’m super excited to share that I hit a career milestone this week by adding M1 Finance as a new sponsor. I’ve been using the app for years and had a great interview with its founder Brian Barnes. I knew the moment I heard the pitch that M1 was going to be a force. I’m (probably) not even allowed to say this per our deal, but M1 is the reason my family lives in a new house. I followed Coatue (lots of Tesla) and a few other hedge funds to the glory land… and, while my experience (208% returns) is not typical…

M1 let me organize my investing strategy and not worry about being asleep at the wheel managing the rest of my shit; now they’re bringing that same brilliance to you… Take $30 free when you sign up here for an account: 👉 https://bit.ly/2JTIwq8

Side Note: for a long time I’ve been working towards a “human-free” work experience. I enjoy starting, investing and growing companies, but I also love to be with myself (and family). So, the closer I get to financial freedom, the happier I am. When I stumbled upon the story of Emmet Peppers $30k to $70m Tesla/self-made hedge fund; I was ALL IN. I’ll spare you the spiel, I interviewed Emmet on my Pod and let’s just say, if you have an hour to burn… and you think you’re not rich enough or lack the education/experience needed to make money investing, think again!

Here’s my convo with Emmet Peppers 👉 https://spoti.fi/3hQzdni

Please Follow me on Twitter @kitun

Scott

Let’s dig into the Popshop pitch 👇👇

Company Bio

Popshop created a web and app-based platform that allows brands to launch their online store and/or book vacant retail space for their physical store right from the palm of their hands. 

Meet the Founders

Watch my full interview with Popshop’s Founder and CEO Nathan Franco here 👉 https://youtu.be/-SM9PJzUeGQ

Nathan Franco is Popshop’s co-founder & CEO. Prior to this, Nathan was working in his family’s retail business where he developed first-hand knowledge of the ins and outs of the retail industry. After college, Nathan began his career in real estate investment and development and would continue this path for more than a decade…working his way up to VP of Acquisitions and Development of a mid-sized NY development firm — acquiring more than $1.5 billion in residential and mixed use properties across the East Coast.

Traction

• 1.6K brands in the community, including Goop, Marc Jacobs, and Stance

• $3.15M in booking volume to date

• 855+ retail spaces across 5 countries and 90 cities

• 15% booking fee (80% gross margin on transactions)

Market Opportunity

The popup shop has become a staple of modern retail. Ecommerce brands have found that it often helps to have a physical showroom for their goods — even if that store is open for only a weekend.

Popshop hopes to capitalize on that trend by creating a platform for brands to book short-term retail leases.

The idea is sound. Obviously, the pandemic has had an enormous effect on retail, prompting consumers to conduct more of their shopping online and forcing physical locations to adopt new practices such as delivery, curbside dropoff and contactless checkout. Many experts predict these changes to continue well after the pandemic has ended.

The shift to Ecommerce actually benefits Popshop. As retail brands (both new and old) conduct more of their business online, they’re going to be less inclined to multi-year leases for brick-and-mortar shops. Brands will, however, be looking for more flexible, short-term leases that allow them to make a splashy impression in the real world. (It’s telling that Amazon, the brand that has come to define Ecommerce, has embraced physical stores as a way to broaden its brand appeal).

There are other tech companies offering similar solutions, such as Storefront in Paris, which has raised just less than $9 million to date; Barcelona-based Go–PopUp, which has raised $1.1 million; and PopUp Shops out of Houston.

Popshop has the advantage of being based in New York City, the commerce capital of the world, making it easier to forge deals with high-profile retail brands and commercial real estate firms that handle some of the most sought after retail space in existence. That Popshop is already working with brands such as HBO, Steve Madden, Target and Goop is early proof the team can execute, too.

Terms & Takeaway

Invest in PopShop here 👉 https://bit.ly/38hEWzs

Security Type: Crowd Safe

Valuation Cap: $10,000,000

Investment Goal: $1,070,000

Raised (as of publishing): $94,645

Minimum Investment: $100

Here's what I like: PopShop, to me, is the future of malls. I don’t talk much about my pre-startup life. But, I once managed a few million sq ft of strip mall space and what I struggled with then (and others do now) is occupancy — as a value, not a clause filler. How do I maintain foot traffic with money to spend? Btw, that was in 2006. It’s still an issue, pandemic or not. Let’s put it another way. What do you like about Instagram? It’s a constant stream of new experiences and shopping options… That is what this is. Only, IRL. The founders are hungry, coachable, and experienced, but not so experienced that they’ll make the same mistakes. The market is massive and so is this solution if they get it right.

Here's what I don't love: Here’s where I let a little air out of the balloon. Having worked extensively in the real estate space (full disclosure: I’ve spent the past 2 years advising one of the largest SFRs in the country) it’s a rich daddy’s game. Money and opportunity are sparse. Add to that, PopShop is building a Tri?-sided marketplace and that scares the shit out of me. They can build the sweetest app ever, get every Ecommerce site to play ball and have property owners turn a cold shoulder, or the opposite, sign all the properties and not get the brands (to-date, they’re getting the brands) and still fall short. I hate businesses that do not control their own fate.

I’ll (un)happily invest in founders that give it their all and come up short. I cannot live with investing in things I know should, but won’t, work. Now, I’m not saying this is the case for PopShop, but I do think it’s pretty important to mention that a LOT of rich assholes have a vested interest in lessees ‘making it work’ and if they don’t get the buy-in, it all ends right there.

Lastly, worth a mention, this is why WeWork got so damn far. Charlatan (and entrepreneur) Adam Neumann convinced property owners they needed him to adjust to the future — and to be clear, if he started today, he might be right — this is what Nathan is doing, only he’s telling the truth.

Who should invest and why: The deal is fair. They’re early and if I were investing via my hypothetical rolling fund, I would ask for better terms than a $10m cap, but it’s far from overreaching. The market is massive, he and his team are the right people to go after it. But, it’s also not a steal for us investors. So, here’s the rub. Do you believe the narrative? I do. More importantly, do you believe in Nathan? Cause, I would buy into him starting a popsicle stand. He just has that energy I love. So, should you invest? Idk. There’s a lot of risk, but also a lot of reward.

If Covid subsides within 9-12 months (the world doesn’t turn into Running Man), and PopShop continues to double their business, sustainably; they will achieve qualified financing at a value far higher than $10m — and given the billions being thrown around by the likes of BlackRock and others, it’s likely they get acquired with a fat multiple. So, if you already invest in real estate this is a no-brainer, if not, and RE is new to you, look at this like a long shot that has a better than average shot of not being a total loser!

As always, startup investing is super high risk, anything can happen. So, don't invest money you can't afford to sink in cement... 🏢💸

Invest in Popshop here 👉 https://bit.ly/38hEWzs

Questions? DM me on Twitter @kitun

Disclaimer: It goes without saying, but this information should not be constituted as financial advice, my investing opinions are my own and all diligence is the responsibility of each individual investor.