(Topic ID: 203700)

deeproot Pinball thread

By pin2d

6 years ago


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#18701 2 years ago
Quoted from benheck:

Ice there's a lot of known costs for DR (many discussed while you were away) such as labor costs, building rental, PPP loans etc.
Amount spent is easily 10+ mil and probably close to 20. It may not be the whole fund but it's still a shit ton.

I agree it’s a stupid wasted shit ton of $$

The PPP loans of over $1 mill are on top of the $41.5 mill raised

And you have to factor in the earnings on the money raised. It’s not sitting in a savings account.

Maybe they invested it all in Apple and have triple digit returns. Nobody really know.

$10 mill? Maybe

If it’s north of $20 mill the 575 can’t withstand that. Highly doubt it

Pinball has been a total disaster and they keep raising $5 mill a yr. Not sure it’s material or not.

Or maybe he’s sold the pinball unit as a material future revenue generator to the investment advisors and can’t afford to shut it down now for that reason. That would have been crazy though. Lol

Despite what a lot of people want I just don’t think they are going anywhere anytime soon

-2
#18702 2 years ago

Didn't Robert try to claim there were no investors in the project? I'm struggling to find the references, but hasn't RM tried to claim there was not a link between the investment funds and deeproot pinball?

The discussion of the investment funds has been brought up numerous times but I thought RM kept trying to deflect that away? Anyone remember the cites?

#18703 2 years ago

Here’s my best guess on money blown.

Gonna say all in here based on PPP payroll and what he’s said in the past

Rent $900 k x 5 yrs. $4.5 mill
Labor $2 mill x 2 yrs. $4 mill peak time
Labor. Before peak and now. $2 mill total
Supplies? No games so what? $500k

Labor based on his PPP payroll reporting

Is $11 mill off base? What am I missing?

On $41.5 mill the debt service is $2.8 mill

Principal come due in 5 years.

The biggest traunch of money, $16 mill
Was raised in 2019 pre Covid. Still has 3 more yrs before it’s due

Return on the $30 million left? 10%?

So that’s $3 mill in fund revenues if true which covers the debt service

Where are pinball funds coming from now?

Can you at least get to cash flow neutral and stop the cash burn? Which is what they should have focused on since day one

Doesn’t look promising. Overhead is still way too high and no real path to achieve mass production if they did have a hit

Still, they can limp pinball along for quite a long time if they want to or need to based on investor advisor expectations with the remaining $30 mill

#18704 2 years ago

Yeah if a Pinbar is stopping you from going under then it’s going away. Curious what exact items are short from turning out machines. Would be nice to know, the fact this isn’t transparent is sketchy AF

#18705 2 years ago
1vrnnt (resized).jpg1vrnnt (resized).jpg
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#18706 2 years ago

Raza will look great next to everyone’s Predator pins.

#18707 2 years ago
Quoted from flynnibus:

Didn't Robert try to claim there were no investors in the project?

If I remember correctly, RM did say there were no individual investors in Deeproot pinball.
That does not mean that Deeproot Funds can't invest in Deeproot pinball.
As Ice has been pointing out, Deeproot Funds investors are owed a specific return, and as long as that happens, they have no interest or say in how Deeproot Funds invests the money to make that return happen.
That said, investing significant amounts in a losing venture makes it harder to achieve the required return with the remaining funds.

#18708 2 years ago
Quoted from RCA1:

If I remember correctly, RM did say there were no individual investors in Deeproot pinball.
That does not mean that Deeproot Funds can't invest in Deeproot pinball.

I know, but it remains an oddity that RM has been so coy about the backing behind DR Pinball, and frankly I think the claims are even to the level of disingenuous and deceitful. I was trying to find the exchange.. as I thought it was in one of the website interviews... maybe it was a podcast.. Was hoping the collective had a better pinpoint than me

#18709 2 years ago
Quoted from flynnibus:

I know, but it remains an oddity that RM has been so coy about the backing behind DR Pinball, and frankly I think the claims are even to the level of disingenuous and deceitful. I was trying to find the exchange.. as I thought it was in one of the website interviews... maybe it was a podcast.. Was hoping the collective had a better pinpoint than me

I think you might be thinking of the Kaneda interview. That was the one where he referred to it as “my money”.

#18710 2 years ago
Quoted from flynnibus:

I know, but it remains an oddity that RM has been so coy about the backing behind DR Pinball, and frankly I think the claims are even to the level of disingenuous and deceitful. I was trying to find the exchange.. as I thought it was in one of the website interviews... maybe it was a podcast.. Was hoping the collective had a better pinpoint than me

Agreed. If true this is one of the more interesting investment vehicles for funding a pinball startup company or any startup company that I have been aware of. Heard of issuing debt, straight up investors (angel, VC, etc), grants, personal piggy bank, friends and family, SPACs, sweat equity, trusts, hell I suppose even issuing crypto coin. But I’ve never heard of this. I guess I would never qualify as an accredited investor. I throw money at a VC fund, I expect them to go high risk high return, they are obligated to. But fixed return on investment, you would think there would be some rules about what the fund can and cannot invest in to achieve that return. I suppose that has to be laid out in the prospectus, but perhaps not other than some vague wording that lets them invest in pretty much anything.

10
#18711 2 years ago
Quoted from frolic:

I think you might be thinking of the Kaneda interview. That was the one where he referred to it as “my money”.

I had to suffer through 53 minutes of his predictions and boasting... but yes, it was the Kaneda Interview
https://soundcloud.com/kanedapinball/episode-420-robert-from-deeproot

At the 53:30 mark
"...there are no investors in pinball"
(and he repeats that)

"It's company money. It's my money."

But given how he spends the first third of the podcast trying to backtrack and clarify what he meant with other rediculous claims... I'm sure he'd just say he really meant it's money HE controls... blah blah blah. Such a slimeball.

It's comical listening to his foreshadowing and boasting even from just 1 year ago.

#18712 2 years ago

I heard it referred to as “a money pipeline”. Not his money.

#18713 2 years ago

So, sounds Robert is using the fund to fund his personal pinball wet dreams, with the assumption that as long as the fund provides the needed return to the investors, no one will care.

Raza, no way they can ever recover what was spent on that, even if they capitalize the R&D, to spread out over X years/games. Assuming they have already ordered the parts for 160 games (although that is probably not a valid assumption), that cost is sunk, but the incremental labor cost to build the games is still there, but the incremental revenue of the sales should at least cover that and feed a few dollars back into the business, albeit it an insignificant amount. so why would you not want to make these games? Unless the goal is to never make games. I guess maybe they want to make as few as possible and then pretend this game never existed, as if it was just John's game and not a real Deeproot game (guess we will have to wait another four years before we see one of those).

BTW, the UL thing is total BS, not a requirement at all and seriously doubt any of the 130 buyers would cancel over it. FCC is probably required. CE is also required, and I could see them wanting to get out of those machines and maybe even pay off overseas buyers to cancel, so as to get out of that expense as it would probably be a lot cheaper.

#18714 2 years ago
Quoted from spoke:

So, sounds Robert is using the fund to fund his personal pinball wet dreams, with the assumption that as long as the fund provides the needed return to the investors, no one will care.
Raza, no way they can ever recover what was spent on that, even if they capitalize the R&D, to spread out over X years/games. Assuming they have already ordered the parts for 160 games (although that is probably not a valid assumption), that cost is sunk, but the incremental labor cost to build the games is still there, but the incremental revenue of the sales should at least cover that and feed a few dollars back into the business, albeit it an insignificant amount. so why would you not want to make these games? Unless the goal is to never make games. I guess maybe they want to make as few as possible and then pretend this game never existed, as if it was just John's game and not a real Deeproot game (guess we will have to wait another four years before we see one of those).
BTW, the UL thing is total BS, not a requirement at all and seriously doubt any of the 130 buyers would cancel over it. FCC is probably required. CE is also required, and I could see them wanting to get out of those machines and maybe even pay off overseas buyers to cancel, so as to get out of that expense as it would probably be a lot cheaper.

correct, UL is never needed. CE or ETL (most cheap chinese products are sold this way) is the minimum. UL is much more stringent, and if your product doesnt fail safe then either something wasnt assembled correctly, or the user modified something the way the product was never intended. if there's ever a lawsuit, UL certification certainly gives you a better leg to stand on. FCC testing is usually required not only for individual boards, but the system as a whole (crosstalk), but again i think that depends on what level of certs you are going after. i see a lot of companies that simply slap a sticker on that says (this device may transmit or receive beyond acceptable limits).

sidenote: If you don't have certifications, you better have a REALLY well written manual that covers you. Otherwise someone could be like "well there was nothing in the manual that said I couldn't hook my US pinball up to a 220V circuit that started a fire that burned my house down".. Case in judgement of the plaintiff.

#18715 2 years ago
Quoted from benheck:

I'm still thinking "strategic exit" but let's play Devil's Advocate with the PinBar rumor:
Q: Why would PinBar shut down everything else? If PinBar is the major issue then shouldn't the rest be figured out by now? Show us pics of the prepped cabinets!
Let's say your pinball company can't get, I dunno, speakers because of the shortages. You can still build all the games (until you run out of room) testing them with a speaker jig, then install the speakers once they come in.
Unlike speakers the PinBar seems pretty dimensionally integral to the deeproot platform. Removing it could affect the size of the glass lift, the cabinet, even the playfield (the area under the apron you don't see).
If those things are on hold what's left to build while you wait for the PinBar decision? The cabinet backbox? Pull the ramp molds? Wiring harnesses? Not all that much really.
So they're probably vomiting money trying to get PinBar to work while at the same time vomiting money on the backup plan oh and also the "small matter" of completely changing their RAZA game code. From Bowden's blog seems you were gonna spend way, WAY too much time on that f**king PinBar so what's the alternative?
All for 130 games. AGAIN.. . Could be worth it if they have a slam dunk killer LICENSED game ready to go once RAZA is done. But Food Truck? Machine Age? Yeti? Not gonna sell shit.

The only way I see them staying afloat is if they are concurrently building up licensed games to release in parallel with raza/other unlicensed themes. I have to imagine the goonies license (if they actually do have it) is going to expire before they can get one out the door.

#18716 2 years ago

The only strongly implied they had Goonies. They said they have The Who and still have that on their site. You’d think that would be imminent. And it’s an ok licensed theme. Dad rock sells. I’d think The Who does as well, if not better, than The Goonies.

14
#18717 2 years ago
Quoted from TreyBo69:

The only strongly implied they had Goonies. They said they have The Who and still have that on their site. You’d think that would be imminent. And it’s an ok licensed theme. Dad rock sells. I’d think The Who does as well, if not better, than The Goonies.

This all seems right.
However, none of it matters since they can't build and ship even a single game.

What do you call a dog with no legs?
It doesn't matter. He won't come to you anyway.

#18719 2 years ago
Quoted from RCA1:

What do you call a dog with no legs?

Matt if he is on your doorstep, Bob if he is in the pool.

#18720 2 years ago
Quoted from SantaEatsCheese:

Matt if he is on your doorstep, Bob if he is in the pool.

I was gonna say “a drag”

#18721 2 years ago

Anakin Skywalker if he's on a Volcano.

#18722 2 years ago

something crazy happened, let me try again

#18723 2 years ago
Quoted from iceman44:

Here’s my best guess on money blown.
Gonna say all in here based on PPP payroll and what he’s said in the past
Rent $900 k x 5 yrs. $4.5 mill
Labor $2 mill x 2 yrs. $4 mill peak time
Labor. Before peak and now. $2 mill total
Supplies? No games so what? $500k
Labor based on his PPP payroll reporting
Is $11 mill off base? What am I missing?
On $41.5 mill the debt service is $2.8 mill
Principal come due in 5 years.
The biggest traunch of money, $16 mill
Was raised in 2019 pre Covid. Still has 3 more yrs before it’s due
Return on the $30 million left? 10%?
So that’s $3 mill in fund revenues if true which covers the debt service
Where are pinball funds coming from now?
Can you at least get to cash flow neutral and stop the cash burn? Which is what they should have focused on since day one
Doesn’t look promising. Overhead is still way too high and no real path to achieve mass production if they did have a hit
Still, they can limp pinball along for quite a long time if they want to or need to based on investor advisor expectations with the remaining $30 mill

I think you may be missing a couple of things:
1) The believe the actual amended forms D provide a running total of funds collected vs allocated. For example, the 2016 D/A shows total offering of $25mm, ~1.7mm subscribed with ~23mm left. The 2017 D/A shows $25mm, ~6.7 sold and ~18.3mm remaining. Looks like there was a secondary offering in 2019 of $37.5mm, with about $4.9 sold per the 12/2020 D/A. Bottom line, seems like the $41.5mm may be high
2) Per the D/A, the finders fees and commissions looks to be ~6.5%
3) First funds collected in 2015, so they have hit maturity (although the vast majoirity is later)
4) Back in late 2018, RM said his burn rate was $750k a month or $9mm a year. This was before the pandemic and before the reduction of the SLC crew. Add that PPP can't include ees making over $100k so using PPP can be tricky. RM's run rate may have been grossly overstated; however, $11mm of total spend seems light. (Now I don't think it was $30mm, as some have suggested, but probably more than $11mm)

Looking at the numbers (and picking ones that favor Deeproot and make the math easy).... Say they raised $40mm. Less fees that leaves $37.4. If you take a spend of $12.4mm (which is much much closer to your guess than the RM's), you have $25mm left for investments paying a return. The challenge is you owe interest, bonus and return of principle based on $40mm invested and you are doing it with only $25mm. (You need to earn 60% on the $25mm just to get to the initial $40mm) I saw someone asked you in the other thread whether you would invest in the 575 fund. I agree with your take...when you look at the numbers, it's hard to see how this dog hunts. Of course, that's why this fund is not for the faint of heart. Of course, I'm probably missing something as well....and who knows...if they put the money in BTC starting back in 2015, they can blow through $50mm without batting an eye!

#18724 2 years ago
Quoted from RCA1:

What do you call a dog with no legs?

Spot

11
#18725 2 years ago

I know what I call a Baywatch with no legs. IMMACULATE.

#18726 2 years ago
Quoted from JodyG:

I know what I call a Baywatch with no legs. IMMACULATE.

IMMAMACULATE!!

#18727 2 years ago

Anybody have any new Haiku ?

#18728 2 years ago

deeproot is a sham you all
my epeen is muy largo
nothing more to say today

*fixed when I realized, I must have been on drugs.

#18729 2 years ago
Quoted from Oldgoat:

I think you may be missing a couple of things:
1) The believe the actual amended forms D provide a running total of funds collected vs allocated. For example, the 2016 D/A shows total offering of $25mm, ~1.7mm subscribed with ~23mm left. The 2017 D/A shows $25mm, ~6.7 sold and ~18.3mm remaining. Looks like there was a secondary offering in 2019 of $37.5mm, with about $4.9 sold per the 12/2020 D/A. Bottom line, seems like the $41.5mm may be high
2) Per the D/A, the finders fees and commissions looks to be ~6.5%
3) First funds collected in 2015, so they have hit maturity (although the vast majoirity is later)
4) Back in late 2018, RM said his burn rate was $750k a month or $9mm a year. This was before the pandemic and before the reduction of the SLC crew. Add that PPP can't include ees making over $100k so using PPP can be tricky. RM's run rate may have been grossly overstated; however, $11mm of total spend seems light. (Now I don't think it was $30mm, as some have suggested, but probably more than $11mm)
Looking at the numbers (and picking ones that favor Deeproot and make the math easy).... Say they raised $40mm. Less fees that leaves $37.4. If you take a spend of $12.4mm (which is much much closer to your guess than the RM's), you have $25mm left for investments paying a return. The challenge is you owe interest, bonus and return of principle based on $40mm invested and you are doing it with only $25mm. (You need to earn 60% on the $25mm just to get to the initial $40mm) I saw someone asked you in the other thread whether you would invest in the 575 fund. I agree with your take...when you look at the numbers, it's hard to see how this dog hunts. Of course, that's why this fund is not for the faint of heart. Of course, I'm probably missing something as well....and who knows...if they put the money in BTC starting back in 2015, they can blow through $50mm without batting an eye!

I understand zero percent of this and zero percent of the post to which it's responding. But since we're talking deeproot, I assume the one that says they screwed the pooch is on the mark.

#18730 2 years ago

This thread is as dead as Deeproots future

11
#18731 2 years ago
Quoted from okgrak:

This thread is as dead as Deeproots future

Haha. This thread will live on past Deeproot as I’m going to dump all I know at some point. It’s a wild ride with Jpoop.

#18732 2 years ago

I really don’t understand why anyone would come up with a Pin-bar and think it was a good idea but also why they decided it should be on the first pin. There’s a saying KISS (keep it simple stupid) that’s not wrong. Maybe they should have made a few pins first and worked up to whatever godawful idea of the pin-bar later.

#18733 2 years ago
Quoted from Oldgoat:

I think you may be missing a couple of things:
1) The believe the actual amended forms D provide a running total of funds collected vs allocated. For example, the 2016 D/A shows total offering of $25mm, ~1.7mm subscribed with ~23mm left. The 2017 D/A shows $25mm, ~6.7 sold and ~18.3mm remaining. Looks like there was a secondary offering in 2019 of $37.5mm, with about $4.9 sold per the 12/2020 D/A. Bottom line, seems like the $41.5mm may be high
2) Per the D/A, the finders fees and commissions looks to be ~6.5%
3) First funds collected in 2015, so they have hit maturity (although the vast majoirity is later)
4) Back in late 2018, RM said his burn rate was $750k a month or $9mm a year. This was before the pandemic and before the reduction of the SLC crew. Add that PPP can't include ees making over $100k so using PPP can be tricky. RM's run rate may have been grossly overstated; however, $11mm of total spend seems light. (Now I don't think it was $30mm, as some have suggested, but probably more than $11mm)
Looking at the numbers (and picking ones that favor Deeproot and make the math easy).... Say they raised $40mm. Less fees that leaves $37.4. If you take a spend of $12.4mm (which is much much closer to your guess than the RM's), you have $25mm left for investments paying a return. The challenge is you owe interest, bonus and return of principle based on $40mm invested and you are doing it with only $25mm. (You need to earn 60% on the $25mm just to get to the initial $40mm) I saw someone asked you in the other thread whether you would invest in the 575 fund. I agree with your take...when you look at the numbers, it's hard to see how this dog hunts. Of course, that's why this fund is not for the faint of heart. Of course, I'm probably missing something as well....and who knows...if they put the money in BTC starting back in 2015, they can blow through $50mm without batting an eye!

How long can pinball be a bottomless pit for their cash? If they have to keep enough to generate returns elsewhere, and the math already is looking really difficult on that front with what is left, pinball HAS to generate some money and 100 machines ain't going to do it.

#18734 2 years ago

I agree Deeproot is on life support but I'm not ready to count RAZA out just yet. If the rumor of getting rid of the Pinbar is true, I see that as a positive sign. A sign that they're willing to recognise a mistake or a severe obstacle and then pivot. That's always important for any start up.

I don't know and I keep going back and forth on it all. They've made so many ridiculous mistakes and had so many past failures it's hard to believe they haven't folded their tent all ready. And yet here they still are.

I have a hunch that Deeproot just might push RAZA out the door before calling it quits. And that would be nice for the pre-order guys to save face.

It's been a weird journey to follow no matter what happens.

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#18735 2 years ago

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#18736 2 years ago

It would be good for the buyers if Deeproot can manage to squirt out the RAZAs.

Then John just needs to trick a THIRD person into starting a pinball company to make AIW and finally the Zidware buyers will be made whole!

#18737 2 years ago
Quoted from benheck:

It would be good for the buyers if Deeproot can manage to squirt out the RAZAs.
Then John just needs to trick a THIRD person into starting a pinball company to make AIW and finally the Zidware buyers will be made whole!

I think you and the caterpillar have been smoking the same stuff...

#18738 2 years ago
Quoted from rai:

I really don’t understand why anyone would come up with a Pin-bar and think it was a good idea but also why they decided it should be on the first pin.

Either John thought it was incredible innovation and it would sell lots of games (hey you guys think a DMD under the glass is great wait til you see pinbar); or Robert really believed he was never going to make games and always planned to sell patents, ideas, or the whole company to another manufacturer.

I remember Robert’s braggadocio about licensing tech to other companies but figured he was just totally full of shit. Maybe Robert is such a good salesman he convinced himself he’d really be able to sell a pinball business without any games released to another company. You know, as if pinball companies even do acquisitions. Friggin Williams shut down their pinball business rather than sell it off because they believed it has zero value.

#18739 2 years ago
Quoted from woodworker:

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Post of the year!

#18740 2 years ago
Quoted from benheck:

It would be good for the buyers if Deeproot can manage to squirt out the RAZAs.

Is that even feasible? How much good money can be thrown after bad? How many more months can this possibly go on for? All for ~100 machines.

With what's been discussed about the deeproot fund in this thread, at some point a decision has to be made to cut bait to protect the rest of the fund.

#18741 2 years ago

surely the code for the pinbar not being there would have be done anyway for when some asshat^wjpopgroupie spill's their pint of Guinness on it and kills it?

If UL isn't needed why do Stern do it?

#18742 2 years ago
Quoted from NeilMcRae:

If UL isn't needed why do Stern do it?

Lots of reasons. They could have started doing it because one of the major FEC or arcade centers could require it on equipment they buy. For a shop with strong process it is probably a small part of a million different things they do.

-27
#18743 2 years ago
Quoted from rai:

Post of the year!

13 wrestling gifs? I'd say epic fail post of RM proportions.

16
#18744 2 years ago
Quoted from Tranquilize:

13 wrestling gifs? I'd say epic fail post of RM proportions.

5AE76978-AFCF-4B95-A1AC-1C200C35D21E.jpeg5AE76978-AFCF-4B95-A1AC-1C200C35D21E.jpeg
#18745 2 years ago
Quoted from woodworker:

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I so wish they allowed me to upvote this post twice

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#18746 2 years ago
Quoted from Tranquilize:

13 wrestling gifs? I'd say epic fail post of RM proportions.

Wrestling is real. RAZA is not.

24
#18747 2 years ago
Quoted from Bruce_Pickle:

Wrestling is real. RAZA is not.

giphy (16).gifgiphy (16).gif
#18748 2 years ago
Quoted from Bruce_Pickle:

Wrestling is real. RAZA is not.

3F04EE49-E1FF-403F-A8B4-F1CDEEAFF50A.gif3F04EE49-E1FF-403F-A8B4-F1CDEEAFF50A.gif
#18749 2 years ago

It's a Raza Smackdown coming soon in Texas

#18750 2 years ago
Quoted from Bruce_Pickle:

Wrestling is real. RAZA is not.

Smackdown! RAW VS RAZA!

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