(Topic ID: 229649)

The Pinball Company - WeFunder Comments


By PinballCompany

1 year ago



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  • 121 posts
  • 52 Pinsiders participating
  • Latest reply 1 year ago by MacroMegas
  • Topic is favorited by 5 Pinsiders

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    There are 121 posts in this topic. You are on page 2 of 3.
    #51 1 year ago

    if you're a serious business person you should definitely ignore negative comments on pinside. This is where we come after we've had too many drinks to play our machines.

    #52 1 year ago

    Good ol pinside tough guys hiding behind their keyboards and dragging more people through the mud.

    I’ve purchased and sold machines to the The Pinball Company, they are stand up people and great to work with. I wish them the best on growing their company.

    -4
    #53 1 year ago

    Jesus fucking christ. I ask if they've ever released any other games and I get berated for it. The statement about them not being manufacturers isn't a troll, it's the truth. At least as far as Jetsons was concerned. They didn't build it. *shrug*

    #54 1 year ago
    Quoted from adamross:

    Hey Nic, wishing you luck on your venture. Unrelated question...why do you guys not include descriptions of any of your game's condition on your website? Just curious as it seems any collector would find that information imperative.

    Good question. Problem is machines sell so fast that we often sell 2 of the same title within days. Can’t really keep up with posting pictures and descriptions. However, every machine goes through our extensive refurbishing process and we will send pictures of the machines in the showroom when asked.

    #55 1 year ago
    Quoted from Frax:

    Jesus fucking christ. I ask if they've ever released any other games and I get berated for it.

    No worries. The question was just unclear to me.

    #56 1 year ago
    Quoted from PinballCompany:

    No worries. The question was just unclear to me.

    Yeah, I was fine with your response. It's the arse-headgear quoting me like I was the one trolling, when the people above me did a far better job of fitting that description. I didn't say a damn word about the financial thing. Ridiculous.

    #57 1 year ago
    Quoted from PinballCompany:

    In talks with manufacturers. Want to do it right, if we do it.

    If you are the reason that Marc Silk was at Expo, I thank you as it was a pleasure to speak with him about a number of series he's worked on including Scooby-Doo. Thanks!

    #58 1 year ago
    Quoted from xTheBlackKnightx:

    Any potential investor should read the risks page on the TPC WeFunder page very carefully. Promissory notes are NOT stock, or vice versa. Rules governing such options are not protected. Investors cannot redirect company policies or management. Success can be entirely dependent on external factors in pinball such as ability to acquire examples of titles of games that in most cases have not be made for over 25-30 years. This essentially is free disposeable capital to TPC with crossed fingers to individuals, despite supposed limitations of non-secured investors, which is specifically designed to protect a parent company, not an investor themselves.
    People have a right to be skeptical when offers are asked to invest in a luxury, non essential commodity (pinball) or a company that offers this commodity as primary part of their sales model that historically has been determined to be questionable during poor economic periods. That also comes with experience. Many long time distributors had to further diversify their equipment sales significantly for this exact reason to survive in the past for the same above reasons.
    I don't have any issues with TPC or their sales, I only dislike investment pitches that make it sound like it a dream come true when the reality of the numbers of pinball game distributors dwindle to a handful during fluctuations of economy. Most resalers have not even been around since the last game sales depression.

    All points spot on. No control, high risk, they give up a little equity but not much. It’s a fine line to tow running a business that you have to promote and at the same time appropriately representing all possible risks. In my mind one would only do this with highly disposable income, if you believed in the vision and the leader, not if you thought you would make a boatload of money here. Personally if given the option I’d just go with the loan from the bank. Less hassle, as long as the debt load isn’t massive you control all levers. If this is going to be some massive $100M company then why give up the equity if you don’t have to.

    #59 1 year ago
    Quoted from Frax:

    Yeah, I was fine with your response. It's the arse-headgear quoting me like I was the one trolling, when the people above me did a far better job of fitting that description. I didn't say a damn word about the financial thing. Ridiculous.

    If you didn’t intend this as some trolling comment and we’re just asking a question, then yeah my bad. Sorry, it didn’t read this way to me and given the tone of the other thread it seemed a continuation of the same bashing he was taking left and right here.

    #60 1 year ago

    Nic, best of luck! Let the haters hate.

    #61 1 year ago
    Quoted from Frax:

    Jesus fucking christ.

    I’m guessing you didn’t go to church today...

    #62 1 year ago
    Quoted from RandomGuyOffCL:

    I’m guessing you didn’t go to church today...

    LMAO!
    Nic has purchased several games from me over the years. Always a quick, no muss, no fuss transaction.

    24
    #63 1 year ago

    The community has been burned several times with investment and pre-order opportunities, many of which have collapsed and/or imploded.

    To overcome the disbelief and suspicion as a result of that, you're probably going to have to be incredibly transparent about everything. Vague statements, verbal promises, high hopes, and hand waving from an unproven project aren't going to cut it anymore. For a lot of people, it's too much of a risk after seeing or having experienced previous pinball-related ventures go down in flames.

    #64 1 year ago

    If Scooby Doo gets made as a pinball, it has to be the early years - 1969 - 1975. It was never as good after this date.

    And it deserves to be made by a company that can do the theme justice, with a legendary coder on board.

    Could be awesome if above.

    #65 1 year ago
    Quoted from PinballCompany:

    This is a true story. So it’s not too good to be true. Sheesh. I offered a guy 25% of the Pinball Company idea for $50,000. He was on board but the wife was not. This was 12 years ago before we made our first sale. We have taken over $2 million in owners draws since opening. So 25% of that would have been his. Using a 1x sales valuation, his stock would be worth roughly $2 million. I started with $10,000 credit card debt instead so yeah glad he didn’t invest and I have done very well. However, having investors who believe in us will push me to continue to work hard to grow the company.

    Notwithstanding the fuzzy math here, how would that investor get his $2 million if he wanted out today?

    The pinball community has been burned far too many times in recent years. I am not saying this company will be among those ranks, but people need to be asking a lot more questions before “investing.”

    Do you have a link or can you provide on your funding page audited financial statements for the past 5 years?

    #66 1 year ago
    Quoted from TigerLaw:

    That may have some antitrust facets if it were true. If Stern did indeed do that I’d be interested to see what the arguement would be from Stern for why it isn’t anti-competitive.
    I do not believe Stern put any rule like this in place.

    It's very common on this side of the pond (not sure about EU) and actually makes good business sense. It's quite common for manufacturers have non-competing line requirements in their distribution agreements (ie: new car dealers, electronics distributors, heating companies, etc). There are business structures and loopholes to get around it but it happens. But, it's really only realistic to do when the market is large and there are distributors competing to carry you. If this is happening in pinball, then that definitely says something about the industry!

    Jaz

    #67 1 year ago
    Quoted from Lermods:

    Notwithstanding the fuzzy math here, how would that investor get his $2 million if he wanted out today?

    The pinball community has been burned far too many times in recent years. I am not saying this company will be among those ranks, but people need to be asking a lot more questions before “investing.”

    Obviously, there is no liquidity and they ain't paying you $2mm for your stock.

    I'm more curious about the fuzzy math, which I assume is in reference to the statement that the person would have received 25% of $2mm taken out by the principles. The 25% would only come into play if funds were a distribution of earnings as a dividend paid to shareholders as opposed to salary. While there can be tax advantages to paying a dividend in lieu of salary, I suspect the numbers don't work out if you you only get 75 cents on the dollar due to the need to pay the dividend to this investor. Specifically, if the principles needed $2mm over those dozen years, the company would have had to pay out $2.67mm since the other investor gets $670k (25%). If the $2mm was a distribution/dividend paid over and above salary, that raises other questions. If the principles believed in the story, you would assume they would insist the $ be reinvested in the company and not distributed. (By the way, any reasonable investor would expect the principles to get paid a fair salary.)

    #68 1 year ago

    I like the spirit of this guy who apparently made it on his own when no one believed in him. That's what makes America so special. Why take it to social funding then?

    The majority of the time I hear the company explain they want to share it with folks who believe in them, sharing this inevitable wealth that is bound to come in. When I hear that, and I hear it hear too - it just comes off like a sales pitch.

    For the person who says folks here don't know what these financial terms are - a lot of us are well educated. I have an Accounting degree and IT certification and I'm sure they're even smarter folks here than me so believe me - we're more than qualified to see what's going on here.

    As they say, invest wisely folks.

    #69 1 year ago
    Quoted from Shapeshifter:

    If Scooby Doo gets made as a pinball, it has to be the early years - 1969 - 1975. It was never as good after this date.
    And it deserves to be made by a company that can do the theme justice, with a legendary coder on board.
    Could be awesome if above.

    100% agree!!! But that is not what the licensor wants to do with the license

    16
    #70 1 year ago

    It seems like a weird, questionable business decision to pass up a loan at lower points than offering this investment, just to try to make other unknown people money?

    That just seems like a pretty thin veil over something else. Managing the investments this way feels like a way for the pinball company to dodge certain things about having investors, with no real benefit or protection to the investor.

    #71 1 year ago
    Quoted from Wolfmarsh:

    It seems like a weird, questionable business decision to pass up a loan at lower points than offering this investment, just to try to make other unknown people money?
    That just seems like a pretty thin veil over something else. Managing the investments this way feels like a way for the pinball company to dodge certain things about having investors, with no real benefit or protection to the investor.
    Was there another round of funding done through wefunder in 2015?

    bingo

    seems pretty obvious.

    Why would anyone "invest" in any company that is supposedly making a bad business decision to take on a higher interest rate in order to allow their friends and family enjoy in their success, lol.

    Read the fine print before anyone hands over money.

    The pinball community has gone down this road far too many times. This guy is not even offering you a pinball machine for your efforts. Puts hime one notch below Jpop IMHO.
    Also, among many collectors, they have had very bad experiences on both sales and purchases from this company.

    His reputation proceeds him. Buyer beware.

    #72 1 year ago
    Quoted from Jazman:

    It's quite common for manufacturers have non-competing line requirements in their distribution agreements (ie: new car dealers, electronics distributors, heating companies, etc). There are business structures and loopholes to get around it but it happens.

    I can’t speak for electronics distributors or heating companies (there can be some limited exceptions in small or vulnerable industries where the product wouldn’t exist at all but for the anticompetitive practice, would seem strange but maybe those two industries are exceptions)...but I was the closing attorney on sixth new car dealership for a client I’ve represented for fifteen years last week (I also closed on their fourth and fifth dealerships at different points over the last ten years).

    If, during the course of our dealings leading up to the closing, General Motors even gave a hint of requiring an exclusive dealing agreement I would I turned them in for violating the Clayton Act to the attorney general immediately. You - as a general rule (subject to exceptions) - can’t stifle competition through exclusive distribution agreements on third party distributors. Manufacturers may try it and they eventually get turned in and dealt with once people realize it may be antitrust violation.

    #73 1 year ago
    Quoted from Lermods:

    Notwithstanding the fuzzy math here, how would that investor get his $2 million if he wanted out today?
    The pinball community has been burned far too many times in recent years. I am not saying this company will be among those ranks, but people need to be asking a lot more questions before “investing.”
    Do you have a link or can you provide on your funding page audited financial statements for the past 5 years?

    https://wefunder.com/thepinballcompany

    Click on our Form C that was filed with the SEC. We paid a lot of money to have reviewed GAAP financials prepared for 2016 and 2017. As an LLC we are not required to prepare GAAP financials. We will also be filing an annual report every April with financials.

    #74 1 year ago
    Quoted from Lermods:

    Notwithstanding the fuzzy math here, how would that investor get his $2 million if he wanted out today?

    Most likely I would have offered to buy his shares many years ago at a substantial premium to what he paid. Today I still believe the cash flows he would be receiving would be attractive enough to keep his shares. There will be a liquidity event down the road though.

    #75 1 year ago
    Quoted from Oldgoat:

    Obviously, there is no liquidity and they ain't paying you $2mm for your stock.
    I'm more curious about the fuzzy math, which I assume is in reference to the statement that the person would have received 25% of $2mm taken out by the principles. The 25% would only come into play if funds were a distribution of earnings as a dividend paid to shareholders as opposed to salary. While there can be tax advantages to paying a dividend in lieu of salary, I suspect the numbers don't work out if you you only get 75 cents on the dollar due to the need to pay the dividend to this investor. Specifically, if the principles needed $2mm over those dozen years, the company would have had to pay out $2.67mm since the other investor gets $670k (25%). If the $2mm was a distribution/dividend paid over and above salary, that raises other questions. If the principles believed in the story, you would assume they would insist the $ be reinvested in the company and not distributed. (By the way, any reasonable investor would expect the principles to get paid a fair salary.)

    Not sure how the math is fuzzy. The business would have paid out much of the cash flows in the form of dividends either way. We also collect salaries for the work we do. Our salaries are far below where they would be if we had similar positions in other companies. I was just giving rough numbers of what this person would have received if he didn't listen to his naysayer (the wife). Or if I had listened to the naysayers 12 years ago, where would I be? We keep a very low debt to asset ratio. There is no reason to keep a lot of cash in the business. We will continue to pay out most of the cash flow to equity holders. I think the big issue is that is a WeFunder campaign do to the size of the offering and to allow small investors to get involved. Our next round will be larger and underwritten by a bank, but for now it is what it is.

    Once again, I am not interested in any Pinsiders investing unless they are supports of me and our company. If the campaign does not reach $500k, I'm off the hook and it will not make one difference to the company's growth story.

    #76 1 year ago
    Quoted from Whysnow:

    Also, among many collectors, they have had very bad experiences on both sales and purchases from this company.
    His reputation proceeds him. Buyer beware.

    Not sure about others experience but I have dealt with nic a few times and he has been absolutely amazing.

    @pinballcompany pm me. I may be willing to put up some cash.

    #77 1 year ago
    Quoted from Wolfmarsh:

    It seems like a weird, questionable business decision to pass up a loan at lower points than offering this investment, just to try to make other unknown people money?
    That just seems like a pretty thin veil over something else. Managing the investments this way feels like a way for the pinball company to dodge certain things about having investors, with no real benefit or protection to the investor.
    Was there another round of funding done through wefunder in 2015?

    I have already been introduced to many investors who can contribute ideas and serve on our board. It's tough running a business with the two executives. There is another benefit that we have not discussed, but here you go. We have been approached by a few individuals and companies who expressed interest in buying our company or merging. However, valuing a small business in this niche industry is very difficult because there are no comparable sales. Best way to do it is to use sales, earnings, or cash flow multiples. This offering will establish a baseline valuation for any suitors in the future. Hard to put a pricetag on the talent and relationships were are getting and be able to have this valuation established.

    #78 1 year ago
    Quoted from PinballCompany:

    https://wefunder.com/thepinballcompany
    Click on our Form C that was filed with the SEC. We paid a lot of money to have reviewed GAAP financials prepared for 2016 and 2017. As an LLC we are not required to prepare GAAP financials. We will also be filing an annual report every April with financials.

    Thanks.

    #79 1 year ago
    Quoted from Whysnow:

    bingo
    seems pretty obvious.
    Why would anyone "invest" in any company that is supposedly making a bad business decision to take on a higher interest rate in order to allow their friends and family enjoy in their success, lol.

    Bank rates are tied to prime. So they will likely be above 6% within 2 years. Notes pay 6% for only 2 years then can be converted to equity with no interest required.

    Quoted from Whysnow:

    This guy is not even offering you a pinball machine for your efforts.

    So you want a pinball machine and ownership? Now that would be a "bad business decision".

    Quoted from Whysnow:

    Also, among many collectors, they have had very bad experiences on both sales and purchases from this company.
    His reputation proceeds him. Buyer beware.

    Just not true. We have done thousands of deals and only a handful have been "bad experiences".

    You do not know me. Call my office and have a chat. Talk to me at Expo. Badmouthing me here only makes you look bad.

    #80 1 year ago
    Quoted from Whysnow:

    Also, among many collectors, they have had very bad experiences on both sales and purchases from this company.
    His reputation proceeds him. Buyer beware.

    I have dealt with Nic in the past, and it literally has been some of the smoothest transactions ever.

    18
    #81 1 year ago
    Quoted from Whysnow:

    bingo
    seems pretty obvious.
    Why would anyone "invest" in any company that is supposedly making a bad business decision to take on a higher interest rate in order to allow their friends and family enjoy in their success, lol.
    Read the fine print before anyone hands over money.
    The pinball community has gone down this road far too many times. This guy is not even offering you a pinball machine for your efforts. Puts hime one notch below Jpop IMHO.
    Also, among many collectors, they have had very bad experiences on both sales and purchases from this company.
    His reputation proceeds him. Buyer beware.

    This whole wefund thing is a Terrible idea, and it’s always lame when someone strolls in here telling us what a fabulous success their entire life has been (doesn’t he know every single pinsider is rich, successful, and lives in a mansion with a supermodel wife?), but you really need to supply
    Some evidence before you trash someone like this.

    I’ve never heard anything bad about them and I still haven’t. Just Hilton taking cheap shots at someone’s company and livelihood.

    What’s the opposite of knee pads? Kicking a guy in the balls when he isn’t looking?

    If anybody’s reputation precedes them it’s Hilton so I’d suggest anybody thinking
    Of basing their opinion on The Pinball Company on Hilton’s unsubstantiated slander take that into account.

    #82 1 year ago

    Agreed. I might not support his approach here on funding but don't slander the guy unless you have some facts to back it up. Even then, I'm not sure this is the place to put it out there unless it was something so egregious.

    #83 1 year ago
    Quoted from PinballCompany:

    We have been approached by a few individuals and companies who expressed interest in buying our company or merging.

    Quoted from PinballCompany:

    This offering will establish a baseline valuation for any suitors in the future.

    Quoted from PinballCompany:

    There will be a liquidity event down the road though.

    I'm a complete financial layman, but here's my take after cherry-picking a few quotes that jumped out at me. Sounds like you plan to expand until the valuation can be nailed down at $X (presumably enough to retire on), then cash out for yourself and the investors. Establishing the beginning of a national footprint in Chicago would certainly put dollar signs in the eyes of potential suitors who could imagine dozens of locations nationwide.

    Seems like a fine plan to me. Of course I could be completely off-base, as anything more complicated than my HSA is above my pay grade.

    -3
    #84 1 year ago
    Quoted from Methos:

    I have dealt with Nic in the past, and it literally has been some of the smoothest transactions ever.

    glad to hear it.

    You are the first person I know that has said that.

    #85 1 year ago
    Quoted from Whysnow:

    You are the first person I know that has said that.

    Really? Several have said the same thing in this topic.

    #86 1 year ago
    Quoted from Whysnow:

    glad to hear it.
    You are the first person I know that has said that.

    I said it above too so I guess he isn’t the first but second

    #87 1 year ago
    Quoted from Whysnow:

    glad to hear it.
    You are the first person I know that has said that.

    While I personally feel there are some significant concerns and questions with capital raising in the manner the OP is doing, his customer service reputation has always been positive as far as I know (though granted, I know little about this group). Your accusations to the contrary seem out of place unless either you personally or someone you can identify can substantiate them in some meaningful way. As a rout operator yourself I’m sure you understand how statements such as these you have made here can be negative to someone’s business.

    Anyway, a couple random thoughts, it’s an interesting idea the OP has to set a valuation formula for a larger transaction via this sale. That wouldn’t work for any institutional investors (they would give no consideration to a transaction such as this one for value, in fact, they likely would frown upon it because it is outside of normal and possibly complicated their deal by introducing potential dissenters). It might pass muster as a valuation tool for other individuals or possibly even the IRS for gift tax calculations...

    If I had to proffer a quick speculative theory id say the absence of a personal guarantee by going this rout over a traditional lender is possibly viewed as a positive. Perhaps they have a larger debt deal lined up but the lender wanted to see more equity in the company, who knows.

    #88 1 year ago

    Give cash, buys pins, opens store, buy more pins, open more stores, has a monopoly, transfers all to new company, let old die, investers fucked or even need to pay since they have a share.

    If I would find the holygrail, fuck everybody, I'm doing this on my own, nn to share that zillion dollars profit.

    #89 1 year ago
    Quoted from Only_Pinball:

    Really? Several have said the same thing in this topic.

    I also have had a few good experiences with them. Brooke hired me to do setup or minor adjustments on NIB games a few times over previous decade and paid my (generous, to me) asking rate with zero negotiation and promptly. No issues.

    #90 1 year ago
    Quoted from yancy:

    I'm a complete financial layman, but here's my take after cherry-picking a few quotes that jumped out at me. Sounds like you plan to expand until the valuation can be nailed down at $X (presumably enough to retire on), then cash out for yourself and the investors. Establishing the beginning of a national footprint in Chicago would certainly put dollar signs in the eyes of potential suitors who could imagine dozens of locations nationwide.
    Seems like a fine plan to me. Of course I could be completely off-base, as anything more complicated than my HSA is above my pay grade.

    Bingo. Shedding some equity today at X valuation and tripling (or more) that over 10 years makes for a great story. There is interest in acquiring us today, but wait until they see Chicago. Not bad for a financial "layman".

    #91 1 year ago
    Quoted from PinballCompany:

    I have already been introduced to many investors who can contribute ideas and serve on our board. It's tough running a business with the two executives. There is another benefit that we have not discussed, but here you go. We have been approached by a few individuals and companies who expressed interest in buying our company or merging. However, valuing a small business in this niche industry is very difficult because there are no comparable sales. Best way to do it is to use sales, earnings, or cash flow multiples. This offering will establish a baseline valuation for any suitors in the future. Hard to put a pricetag on the talent and relationships were are getting and be able to have this valuation established.

    As a potential investor the only valuation I would be interested in, is the straight forward P/E ratio.

    For a company trading over 10 years, P/E ratio is the main method I would use.

    Other valuations are typically use for blue sky investments, tech companies, where potential profits can be huge ( as can the losses ).

    #92 1 year ago
    Quoted from Shapeshifter:

    As a potential investor the only valuation I would be interested in, is the straight forward P/E ratio.

    For a company trading over 10 years, P/E ratio is the main method I would use.

    Other valuations are typically use for blue sky investments, tech companies, where potential profits can be huge ( as can the losses ).

    Well, this company doesn't have a traded stock price to utilize in that manner...you'd have to go off revenue to determine a value but you'd still have to determine a multiple or other type of formula to apply.

    The various formulas are totally different industry to industry and can even differ based on the type of operation that is making the acquisition. If you are buying a water distribution company (for example), only their gross annual sales matter (they generally sell off a 1x of gross model with some minor adjustments)...if you are buying a flower shop, they'd have their own multiples. OP has indicated his industry doesn't have many like sales to determine a standardized formula, which is probably true, so a buyer would look at a related industry and borrow from that formula.

    #93 1 year ago
    Quoted from PinballCompany:

    I have already been introduced to many investors who can contribute ideas and serve on our board. It's tough running a business with the two executives. There is another benefit that we have not discussed, but here you go. We have been approached by a few individuals and companies who expressed interest in buying our company or merging. However, valuing a small business in this niche industry is very difficult because there are no comparable sales. Best way to do it is to use sales, earnings, or cash flow multiples. This offering will establish a baseline valuation for any suitors in the future. Hard to put a pricetag on the talent and relationships were are getting and be able to have this valuation established.

    That is the more traditional investment route that I would have expected you to go. Selling equity and board seats to a very small select group of investors who share your vision.

    That said, I do wish you the best of luck. It's always a risk to do something like this and hope it works out for you and your investors.

    More pinball is a good thing, especially if you can maintain your business model.

    -1
    #94 1 year ago
    Quoted from TigerLaw:

    While I personally feel there are some significant concerns and questions with capital raising in the manner the OP is doing, his customer service reputation has always been positive as far as I know (though granted, I know little about this group). Your accusations to the contrary seem out of place unless either you personally or someone you can identify can substantiate them in some meaningful way. As a rout operator yourself I’m sure you understand how statements such as these you have made here can be negative to someone’s business.
    Anyway, a couple random thoughts, it’s an interesting idea the OP has to set a valuation formula for a larger transaction via this sale. That wouldn’t work for any institutional investors (they would give no consideration to a transaction such as this one for value, in fact, they likely would frown upon it because it is outside of normal and possibly complicated their deal by introducing potential dissenters). It might pass muster as a valuation tool for other individuals or possibly even the IRS for gift tax calculations...
    If I had to proffer a quick speculative theory id say the absence of a personal guarantee by going this rout over a traditional lender is possibly viewed as a positive. Perhaps they have a larger debt deal lined up but the lender wanted to see more equity in the company, who knows.

    sorry, I should have been more clear in that my "buyer beware" was in regards to this "investment" opportunity.

    As for pinball buying and selling, Dung commented about his experience and mine (and others I have spoken with) have been similar.
    Granted some of that is because they a a retail outfit looking to buy as low as possible and sell as high as possible.

    #95 1 year ago
    Quoted from Shapeshifter:

    As a potential investor the only valuation I would be interested in, is the straight forward P/E ratio.
    For a company trading over 10 years, P/E ratio is the main method I would use.
    Other valuations are typically use for blue sky investments, tech companies, where potential profits can be huge ( as can the losses ).

    I have a Bachelors in Finance and an MBA. I am also an investor. I hold a 12% stake in PRKA (see my SEC filings for that company). We also invest in real estate and have a successful amusement company. Both of these are referenced in our form C filed with the SEC and posted on WeFunder.

    For valuing The Pinball Company is used DCF (Discounted Cash Flow) Model. I projected our future cash flows and applied a 10% required rate of return (discount rate). I get around $10 million present value. Ultimately, our company is worth what cash flows it brings to us going forward. For a buyer, it is worth what they are willing to pay for those cash flows or to acquire our talent and brand. It is quite possible that we sell the company within 10 years and we become part of a much bigger one.

    #96 1 year ago
    Quoted from Whysnow:

    sorry, I should have been more clear in that my "buyer beware" was in regards to this "investment" opportunity.
    As for pinball buying and selling, Dung commented about his experience and mine (and others I have spoken with) have been similar.
    Granted some of that is because they a a retail outfit looking to buy as low as possible and sell as high as possible.

    Ah, understood. Yes, a retail outfit buying used pins can frequently rub some the wrong way.

    #97 1 year ago

    Bump for a fellow Columbian! Go Mizzou!

    #98 1 year ago

    Can someone please explain why, in this day and age, a company needs a distributor network?

    I think this job, for a pinball company, has morphed into exactly what TPC is trying to offer... sales and service at the point of delivery. As far as I can tell, this has historically been the reason to have a distributor network, divided up into sales and service territories so as to not step on each others toes.

    What a distrubutor did in the past was bring in the product, set it up, and then arrange delivery to the customer, wether that was on site, or direcly to their location. They provided sales, service, and had a fully stocked parts department. They reacted to the operators needs because every day a machine was broke was a lost day of revenue for them.

    Now, the distributor handles the sale, but the product is actually drop shipped to the customer. Since to beat the taxman, everyone orders from a non-local distributor, when issues arise, there is no “we’ll send out a tech and get that taken care of right away” anymore, but the “we have to call somebody local to handle that for us”.

    So I see TPC filling this void, however, not sure how long the status quo will be the status quo... the need to order from non local distributor/vendors will soon be going away, since they are now starting to collect the taxes that made everyone order online/out of state in the first place. This will allow the original paradigm to shift back, and maybe full service local distributorships will become a thing again, and this is not a good investment for a company trying to contract for manufacture, show, sell, and maintain game room equipment to higher end buyers at the end of the supply chain? Why wouldnt the local vendors just ramp up their game? I know I like to keep my money local when I can, wouldn't most people if they could?

    Just some food for thought.

    #99 1 year ago
    Quoted from Bublehead:

    Can someone please explain why, in this day and age, a company needs a distributor network?
    I think this job, for a pinball company, has morphed into exactly what TPC is trying to offer... sales and service at the point of delivery. As far as I can tell, this has historically been the reason to have a distributor network, divided up into sales and service territories so as to not step on each others toes.
    What a distrubutor did in the past was bring in the product, set it up, and then arrange delivery to the customer, wether that was on site, or direcly to their location. They provided sales, service, and had a fully stocked parts department. They reacted to the operators needs because every day a machine was broke was a lost day of revenue for them.
    Now, the distributor handles the sale, but the product is actually drop shipped to the customer. Since to beat the taxman, everyone orders from a non-local distributor, when issues arise, there is no “we’ll send out a tech and get that taken care of right away” anymore, but the “we have to call somebody local to handle that for us”.
    So I see TPC filling this void, however, not sure how long the status quo will be the status quo... the need to order from non local distributor/vendors will soon be going away, since they are now starting to collect the taxes that made everyone order online/out of state in the first place. This will allow the original paradigm to shift back, and maybe full service local distributorships will become a thing again, and this is not a good investment for a company trying to contract for manufacture, show, sell, and maintain game room equipment to higher end buyers at the end of the supply chain? Why wouldnt the local vendors just ramp up their game? I know I like to keep my money local when I can, wouldn't most people if they could?
    Just some food for thought.

    Wow. This guy is smart. Seriously. If I was starting a pinball manufacturing company today, I would not have any (or many) distributors. But I am also a marketing guy and believe 95% of customers would find my products through my efforts. However, you do need to establish relationships with installers and servicers in major markets. That can be done by working with distributors and compensating them for their role or creating that network of distribution hubs/service points in house. I never understood why out of state customers did not pay some kind of federal sales tax that got distributed to states. The Supreme Court decision could make things difficult if we have to file tax returns in 50 states. Maybe they will come up with some other way of collecting tax on sales that doesn't involve that. The ruling did play a role in our expansion plans and now we are lot less hesitant to have "nexus" in other states.

    #100 1 year ago
    Quoted from PinballCompany:

    Not sure how the math is fuzzy. The business would have paid out much of the cash flows in the form of dividends either way. We also collect salaries for the work we do. Our salaries are far below where they would be if we had similar positions in other companies. I was just giving rough numbers of what this person would have received if he didn't listen to his naysayer (the wife). Or if I had listened to the naysayers 12 years ago, where would I be? We keep a very low debt to asset ratio. There is no reason to keep a lot of cash in the business. We will continue to pay out most of the cash flow to equity holders. I think the big issue is that is a WeFunder campaign do to the size of the offering and to allow small investors to get involved. Our next round will be larger and underwritten by a bank, but for now it is what it is.
    Once again, I am not interested in any Pinsiders investing unless they are supports of me and our company. If the campaign does not reach $500k, I'm off the hook and it will not make one difference to the company's growth story.

    I was speculating on what the previous poster called fuzzy math.

    So, if I understand your post correctly, it sounds like you took a salary, albeit below market, and then augmented with an additional $2mm in dividends. My question was based on the fact that you would have had to pay out an additional $667k for you to get that $2mm. This resulted in the second musing that small companies looking to grow would not typically draw out an additional $2.7mm. They would reinvest earnings into the company since they believe they can get a better return investing in themselves than something else. This is why, in my experience, the BDC's, VC's, etc. look for complete commitment by the principles. Basically, if the principles don't believe enough in the story as evidenced by taking as little money as possible out of the firm, why should they (the VC/BDC's)? Now all that being said, I wish you success and I will take a quick gander at the financials. Heck it might be something I'd toss a couple of dollars at as a flyer. Unfortunately, that would be terrible news for you as I have an amazing ability to pick losers and buy high/sell low.

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