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Peak Skis Investment opportunity

AltaSkier

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Can anybody explain to me how "investing" in Peak "democratizes" the ski industry? Also, say I invest in their company, how do I benefit, err, profit? As I am not really buying stock, I am trying to figure out how this gives me a benefit for my money.

FWIW, I own a pair of Peak 98's that I like very much.
 

fatbob

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You don't benefit in $ terms. You straight lose. Think of it like a store loyalty card that you've spent $1000 on. You're possibly emotionally locked in for the hope of some future benefit. Maybe you'll be a captive audience for more "deals".

If you want to give them $1000 buy another pair of skis. Then at least you'll have something for your money rather than keeping Bode's show on the road for a few more hours.

AIUI most crowdfunding is for products people want to see get to market and their " investment" is really for the product at an early bird price. Here the skis already exist so you're flat out paying to subsidize their business model.
 

dovski

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I bet there is potential for a high return if the company is successful. Ultimately, the decision is up to you based on your risk tolerance and financial situation.

I mean Bode's endorsement carries weight in the ski world, but his endorsement alone is not enough to guarantee the company's success...
The structure of the investment is such that there is no clear path to exit for an investor and if your read the small print they are pretty clear about that. Also when you use a platform like this they take anywhere from 10-20% of the funds that come in so a significant portion of these funds don't even go to Peak. The point being there are better ways to ask someone to invest in your company where they actually real ownership stake with a defined path to monetization and the ability to resell set set stake should want to exit before the monetization event.

To be clear I like Bode and think he has excellent brand equity and from what I hear Peak Ski are great, the problem is that financially this company is in serious trouble and this crowd funding effort is not a good investment. Even if the company stays in business, which could be a big if based on their disclosures, it is not clear when or how an investor will get any of their money back. So if you think of this as a GoFundMe effort to save Peak Skis, and invest with that expectation you won't be too disappointed. Don't get me wrong, I hope this works and the company is hugely successful, but even in that case it is unlikely you will see a huge return on this investment and the chances of that happening are pretty low based on all the data they have shared with us on their sales and financial situation.
 

AngryAnalyst

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@HardDaysNight @ctsnowplow


i don't disagree with the sentiment although I don't think the filings refer to the actual valuation as $36 million. I think what it refers to is if by some miracle a triggering event happens then the formula for the payout for this offering is capped at a valuation of $36 million for the company. So if they IPO at more than $36 million values for the company then there is no more upside to the payout formula of the offering. Note that was my initial understanding of it, but to be certain I am correctly interpreting it I would have to spend more time going through it all.

So it's basically (quick scan) a VC style SAFE doc. I think it's not that different than the template Y Combinator one (I think? I'd need to read more carefully). That stands for Simple Agreement for Future Equity. You should think of it as a $36 million dollar valuation buy in subject to some flexibility.

Fun fact this type of offering only recently became a legal thing to offer to the public.

I said this a while ago in April of 2022:
1700691382114.png


Frankly the way he's apparently run his business by paying himself and his friends generous salaries and now doing a dodgy retail offering seems too similar to the worst predictions I had in mind when I wrote that. Not impressed. I have way more respect for what almost literally every other entrepreneur that started a ski brand has done.
 

locknload

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The structure of the investment is such that there is no clear path to exit for an investor and if your read the small print they are pretty clear about that. Also when you use a platform like this they take anywhere from 10-20% of the funds that come in so a significant portion of these funds don't even go to Peak. The point being there are better ways to ask someone to invest in your company where they actually real ownership stake with a defined path to monetization and the ability to resell set set stake should want to exit before the monetization event.

To be clear I like Bode and think he has excellent brand equity and from what I hear Peak Ski are great, the problem is that financially this company is in serious trouble and this crowd funding effort is not a good investment. Even if the company stays in business, which could be a big if based on their disclosures, it is not clear when or how an investor will get any of their money back. So if you think of this as a GoFundMe effort to save Peak Skis, and invest with that expectation you won't be too disappointed. Don't get me wrong, I hope this works and the company is hugely successful, but even in that case it is unlikely you will see a huge return on this investment and the chances of that happening are pretty low based on all the data they have shared with us on their sales and financial situation.
Well summarized. Stay away unless you want to be a Peak Fan and want some pride at helping this company raise $ to try and stay afloat. I personally am really turned off by the salaries he and his team are paying themselves...that's not how you operate lean and fund your startup. Get the business off the ground before you start reaping the benefits. I've done this with my own business. Not something I would give $ to.
 

AngryAnalyst

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  1. This crowd sourcing deal is a bad investment and they basically tell you that you will likely lose your money at least that is my interpretation of their fine print which also probably protects them legally if you do lose all your money
This part is less damning than you think. Plenty of legitimate investments have similar fine print, it's basically required for many kinds of investment offerings. Having said that, few of them are good ideas for retail investors.


I bet there is potential for a high return if the company is successful. Ultimately, the decision is up to you based on your risk tolerance and financial situation.
Buy a lottery ticket. I think it has better odds when the jackpots are high. If you want to get the rewards (like the vest) for investing and/or this is chump change for you, go for it.

However, this is a really shitty deal. You are investing without control in an amount that doesn't save the business at a valuation that seems insane based on historical financial performance. Moreover, management seems dedicated to looting the company.
 

dovski

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This part is less damning than you think. Plenty of legitimate investments have similar fine print, it's basically required for many kinds of investment offerings. Having said that, few of them are good ideas for retail investors.
True all investments carry a certain degree of risk for sure, even my broker has us sign something to this effect. I think the big difference here as you stated is that "you are investing without any control" into a business that is clearly not doing well. Add to that the lack of any tangible ownership, exit strategy and an astronomical valuation and it is clearly a very bad deal.
 

Roundturns

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There are very few sure things, but I’m pretty sure per the previous comments above the prospects of seeing a return on investment are about nil.

Peak has already had to offer a two for one ski promotion. Doubtful they will be able to significantly increase sales at higher margin retail price points going forward.
 

HardDaysNight

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However, this is a really shitty deal. You are investing without control in an amount that doesn't save the business at a valuation that seems insane based on historical financial performance. Moreover, management seems dedicated to looting the company.
One could replace the Form C with this succinct and accurate summary!
 

tomahawkins

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In any of these documents is there an indication of how much they paid to Elan for fabrication? Quality wise, the factory turns out good products. Elan might be a good choice for future ski startups.
 

Tom K.

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I try not to read financial stuff unless I'm getting paid, so haven't looked at the docs.

But my history and what I've read here leads me to observe that they need serious money.

Does this crowdfunding-esque thing not wrinkle the noses of potential serious investors that actually have the $$$ to potentially pull Peak back from the brink?
 
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Wasatchman

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In any of these documents is there an indication of how much they paid to Elan for fabrication? Quality wise, the factory turns out good products. Elan might be a good choice for future ski startups.
They don't disclose it directly. You can come up with a decent ballpark estimate by taking cost of goods sold divided by number of skis sold (they said over 4,000 skis sold so maybe guess 4200 skis sold ). Then back out an estimated cost of shipping which I believe should also be included in COGS and you'll get a pretty good estimate. I'm not at my desk right now or I'd calculate it. If someone doesn't beat me to it I'll take a stab it when I get a chance.

@AngryAnalyst i don't have experience with crowd sourcing but that fine print is much worse then I'm typically used to seeing in filings. Is it really standard practice to indicate you will likely lose your entire investment and substantial going concern doubts in crowd sourcing ventures? That is definitely not standard practice in typical filings unless it's a really distressed situation.

You are right that only relatively recently was such an offering even legal to sell to the general public. Before, these types of offerings could only be sold to qualified investors. Again, I don't have experience dealing with crowdsourcing but after seeing something like this I'm beginning to wonder if they got a bit too loose and need to tighten up regulations a bit. This example is absolutely ridiculously shitty. Like bad joke shitty.
 
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AngryAnalyst

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@AngryAnalyst i don't have experience with crowd sourcing but that fine print is much worse then I'm typically used to seeing in filings. Is it really standard practice to indicate you will likely lose your entire investment and substantial going concern doubts in crowd sourcing ventures? That is definitely not standard practice in typical filings unless it's a really distressed situation.
I've never seen a crowdsourcing OM either, I have seen some SAFEs for traditional VC things and I do see lots of regular way OMs for equity and debt instruments. I am used to encountering language like the caps lock disclosures on the cover ("Peak Ski Company" logo at the top) in 144a bond issuances, distressed company investment offerings whether for securities or loans and sometimes unregistered equity deals. Without reading them more carefully than I'm going to do for free they seem kind of similar to the standard language.

If you are referring to "going concern qualification" on the not quite an audit on page 40 and discussed more fully in note 8, that is not normal in any context outside a restructuring or a very distressed public company. I think there was probably more extreme language in the Hertz equity issuance the bar stool sports guy tried to do after it filed for bankruptcy, but a judge stopped that one.

I'm also going to go through it as time allows with the holiday, this is one of the funnier OMs I've seen in a while.

By the way, has anyone in this thread (I haven't read all of it or all of the OM) reviewed the business description section? The customer demographic descriptions are amazing and vivid! "The Aspirational Skier", "The Cruiser" and "The Aficionado" each get "perceived ability" and "actual ability" callouts as well as favorite resorts and preferred ski passes (pdf pg. 24-25, numbered page 17-18).

They don't disclose it directly. You can come up with a decent ballpark estimate by taking cost of goods sold divided by number of skis sold (they said over 4,000 skis sold so maybe guess 4200 skis sold ). Then back out an estimated cost of shipping which I believe should also be included in COGS and you'll get a pretty good estimate. I'm not at my desk right now or I'd calculate it. If someone doesn't beat me to it I'll take a stab it when I get a chance.
I can't find a unit sales in there by searching, where is it?

I did find a "use of proceeds" section that addresses this question somewhat directly on pg.19 (numbered)/26 (pdf) : "Inventory purchases of up to $875,000 will allow Peak to acquire up to an additional 4,000 skis to sell in the 23/24 season including the newly launched Peak 77s in Europe." Simple division suggests they are paying $218.75/ski on average given they use an average cost method for inventory. This seems like a sane ballpark to me but if any of the people on here (I think there was a Swiss guy?) who've actually run ski businesses could comment I'd be curious.

I am beginning to feel a little bad about this though, maybe I should confine my enjoyment of this offering to PMs from here on out.

I will say I do hope his business succeeds, I understand plenty of people like his products. I just think this offering is a really bad way to go about building a business. I stand by that statement.
 
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MikeHunt

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Question for you: would Japan been a better target region for their 2nd phase of expansion than Europe?

Euros are piste oriented and prefer sub 80 skis. Japan is Pow heaven and looks more in tune with their 80mm+ offerings.

I don't know anything about the size of European ski market vs Japan. I know that Europe as a whole is bigger than US. Don't know Japan's ski market size relative to Europe.
 

dovski

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I've never seen a crowdsourcing OM either, I have seen some SAFEs for traditional VC things and I do see lots of regular way OMs for equity and debt instruments. I am used to encountering language like the caps lock disclosures on the cover ("Peak Ski Company" logo at the top) in 144a bond issuances, distressed company investment offerings whether for securities or loans and sometimes unregistered equity deals. Without reading them more carefully than I'm going to do for free they seem kind of similar to the standard language.

If you are referring to "going concern qualification" on the not quite an audit on page 40 and discussed more fully in note 8, that is not normal in any context outside a restructuring or a very distressed public company. I think there was probably more extreme language in the Hertz equity issuance the bar stool sports guy tried to do after it filed for bankruptcy, but a judge stopped that one.

I'm also going to go through it as time allows with the holiday, this is one of the funnier OMs I've seen in a while.

By the way, has anyone in this thread (I haven't read all of it or all of the OM) reviewed the business description section? The customer demographic descriptions are amazing and vivid! "The Aspirational Skier", "The Cruiser" and "The Aficionado" each get "perceived ability" and "actual ability" callouts as well as favorite resorts and preferred ski passes (pdf pg. 24-25, numbered page 17-18).


I can't find a unit sales in there by searching, where is it?

I did find a "use of proceeds" section that addresses this question somewhat directly on pg.19 (numbered)/26 (pdf) : "Inventory purchases of up to $875,000 will allow Peak to acquire up to an additional 4,000 skis to sell in the 23/24 season including the newly launched Peak 77s in Europe." Simple division suggests they are paying $218.75/ski on average given they use an average cost method for inventory. This seems like a sane ballpark to me but if any of the people on here (I think there was a Swiss guy?) who've actually run ski businesses could comment I'd be curious.

I am beginning to feel a little bad about this though, maybe I should confine my enjoyment of this offering to PMs from here on out.

I will say I do hope his business succeeds, I understand plenty of people like his products. I just think this offering is a really bad way to go about building a business. I stand by that statement.
I think most of us are hoping Peak succeeds as for all intents and purposes they have developed a good product, unfortunately it is going to have to be without my $$ for all the reasons many of us have sited on this thread. Aside from that I do also want to call out the fact that it is expensive to bring a new product to market and more importantly it is also expensive to enter new Geos. Their new ski targeted at the European market when they have not even established a stable business with their current line of skis in NA is also concerning. The more skus and the more markets you have the greater your expenses and the complexity of your business. 20/20 hindsight is a beautiful thing, and given where they are it may have been wise to make one great skis to launch the company and expand out from there.
 

AngryAnalyst

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Question for you: would Japan been a better target region for their 2nd phase of expansion than Europe?
In truth, I don’t understand why they are expanding geographically at all. They have a tiny slice of the US market. If I had a meeting with him that would be one of my first questions. Like maybe someone had the “smart” idea that they could save on shipping from Elan by selling in Europe but that person ignored the logistics expense managing the distribution creates? Honestly I’m drawing a blank, possibly it’s in there somewhere but it makes no intuitive sense to me.
I don't know anything about the size of European ski market vs Japan. I know that Europe as a whole is bigger than US. Don't know Japan's ski market size relative to Europe.

The OM has a table. It says 3.8 million pairs annually, 1 million in the US, 2.2 million in Europe, 200K each in Canada and Japan.
 

fatbob

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As we've said on other threads Europe is unlikely to wet its knickers and scream at the prospect of skiing something rad designed by Bode that's not available in ski stores.

I might be wrong. He certainly garnered some coverage over here but with a luxury discretionary purchase against a high cost of living inflationary environment I suspect few will be rushing to buy an unproven ( by any of the skiers they know) premium priced new brand.
 

dovski

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In truth, I don’t understand why they are expanding geographically at all. They have a tiny slice of the US market. If I had a meeting with him that would be one of my first questions. Like maybe someone had the “smart” idea that they could save on shipping from Elan by selling in Europe but that person ignored the logistics expense managing the distribution creates? Honestly I’m drawing a blank, possibly it’s in there somewhere but it makes no intuitive sense to me.


The OM has a table. It says 3.8 million pairs annually, 1 million in the US, 2.2 million in Europe, 200K each in Canada and Japan.
While Europe is the bigger market on paper, it is much more challenging to penetrate give the 30+ countries there with unique cultures, languages, laws and brands. In other words you need to localize both language, marketing and distribution for each country or at the very least you needed to do so in French, German, English (UK not US English) and possibly Spanish. There is a huge expanse to this and complexity. I am also not clear how Bose’s brand equity holds up overseas and against the European skiing super stars.

Bottom line this feels like the wrong move for a company that is struggling to establish themselves in North America, it also sounds very expensive.

Now to play devils advocate maybe Bode is taking on European partner who is already established there and likes his skis, in that case things could be different. Even better maybe he has secured Candide as the European face of the brand and is making him a new signature ski - we all know what that did for Faction! The reality is that we don’t know and nothing like this has been announced which means it is not happening this year, which takes us back to where we started with this conversation and the premise that this is too much too soon.
 

fatbob

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Partner is these guys.


Lovely little town. Absolutely beautiful Istrian harbour on the very narrow part of the Slovenian coast ( no I didn't know until I went this year)

But it's not the throbbing heart of Euro ski country and while they seem to rep Poc, Vist and Colmar they seem more aligned to watersports and I doubt they are distributing those retail brands for all Europe.

Maybe they only need to transactionally run the Euro clone of the US website and remit most of receipts to Peak US. So they don't necessarily need to that hands on with product but who is doing tuning, packing, dispatch. And more importantly the softer ongoing marketing beyond interwebz ads.
 

tomahawkins

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I can't add much in terms of analysis except to say that Bode looks like a kid hauled down to the principal's office in the Republic video. I like their skis and hope they make it through.

Started watching this video, then I released Bode isn't talking about what I thought he was talking about...

 

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