Even though GoLite filed for bankruptcy late last year, co-founder Demetri Coupounas is hoping to reincarnate the company as My Trail. Coupounas purchased rights to all the GoLite product designs during the dissolution of the company, and is now looking to the public to raise funds to start his new company in order to bring the popular lightweight gear back to market.
Although Coupounas was unsuccessful raising money to save GoLite, he believes turning directly to the fans of the company’s products is now the answer. In a Direct Public Offering, My Trail is looking to raise $200,000 – $1,400,000 through your purchase of preferred shares directly from the company. The first $200,000 will fund production of the best-selling styles online (this will include tents, backpacks, technical outerwear, running and hiking tops and bottoms, sleeping bags, and accessories), an e-commerce website launch, opening a distribution center, and hiring core headquarters staff. The rest will fund production of styles that sell best in stores and opening and staffing the first stores in Colorado’s Front Range.
So what’s in it for you if you invest? My Trail claims you will earn 10% annual dividends and also receive a 20% discount on all product purchases. You get your initial investment back if My Trail sells to another company at a higher valuation or decides to buy your shares back after 5 years. If you read the offering document closely, you will see that there is currently no, and there may never be anyone who wants to buy the company and there is no guarantee that My Trail will still be operating in 5 years or, even if it is still operating, will be able to buy you out. And that dividend? The company is not required to, and there is no guarantee that the company will, pay dividends in any year.
So far the company has raised $28,500 of their $200,000 goal. As rules of the DPO dictate, the company can have up to 2000 total investors–you must be from Colorado to participate with a minimum investment of $1,000 to $5,000 depending on your accreditation status. The share price is set at an arbitrary $5, but will value the company around $700,000 to $1.9 million after the DPO.
The My Trail DPO begs the question–if it didn’t work the first time around why will this one be different? Coupounas claims higher margins, lower overhead costs, ditching the casual line, and smaller stores in select markets will be the key to success (note: only 4 of the 14 GoLite stores were ever profitable). For those interested, I would have a lawyer look over the offering document before investing and know that there is a very good chance you may not get any dividends let alone your money back in the end. But you will get 20% off on gear. Worth it? You decide.