Description
Rollout is a cloud-based drawing management software platform built for Architecture, Engineering, and Construction professionals.
Current Valuation
Rollout has a valuation of
$5,000,000 for this round
based on a previous
transaction.
Capital Requirements
$250,000
Offering Type
Reg-D 506(c), Convertible
Note
Timeline
45-60 days
Capital Raised to Date
Rollout has raised $230,000
cash, and $90,000 through
local pitch competitions.
Contact Information
Matt Hinson, CEO
Cell: (832) 385 – 3511
Email: [email protected]
Alejandro Jacobo
Cell: (979) 676 - 1663
Email: [email protected]
Business Model Overview
Rollout is a cloud-based drawing management software platform built for
Architecture, Engineering, and Construction professionals. The platform allows
for viewing and managing drawings and blueprints online, intelligent markups
to help track changes, and collaboration tools to make the entire process
significantly more efficient. The company generates revenue by charging
$100.00 per project per month for their web application, and by charging $5.00
per user per month for their mobile app. Rollout also has a prototype hardware
business called PaperLight, which uses projection technology and a touch
screen surface to entirely eliminate paper documents fromthe workplace.
General Information
Value Proposition
Rollout provides three pillars of
value: sheet management, intelligent
mark-ups, and social collaboration.
Rollout ensures that the entire
project team is working off of the
latest set of drawing revisions by
utilizing dedicated slots for each
sheet. Users can turn on markups
made by other team members for
better communication and to track
markup history. Rollout acts like a
social media application for work
where every user has a perpetual
account allowing for quickly sharing
revisions and posting comments.
Industry Technology
Sector AEC
Venture Stage Seed
Current
Revenue
$500/month
Current Share
Price
$0.56
Entity Type C-Corp
State of
Formation
Delaware
Rollout - Issuer Report
Company Website
http://www.rolloutaec.com/
Rollout ‘s Objective
To become the de facto standard
drawing management software in
the construction industry.
Product Demo Video
http://bitly.com/RolloutVid
Product
Does it solve a burning need?
Have we seen a live demo and does it work?
Has a patent application been submitted?
Scalability of the product?
Supplier risk rating?
Cost to support the product?
Key product differentiators? Rollout’s competitive edge:
• Different pricing model allowing for easy onboarding.
• Industry specific software for greater functionality.
• Greater emphasis on intelligent markup mechanisms and
collaboration tools than their competitors.
How does the quality compare to
competing products?
List the primary product features • Quickly upload .pdf files, which are converted into
Rollout’s own file format.
• Easily change supporting information about each file to
better track versions and changes.
• Make a variety of markups and notes online to be shared
with clear version control.
• Ability to easily share changes and begin comment threads
on specific changes or entire revisions.
• Download documents in moments.
• Integration with Box and Dropbox coming soon.
Product Summary
Rollout is a cost effective alternative to hardcopy drawing
management tools and processes. The industry is primarily
reliant on applications like box.com to share .pdf files while
still using a variety of editing software and heavily relying on
paper. This product makes the workplace more efficient and
each AEC project cheaper.
Product Life Cycle Stage Introduction
Pricing Strategy: $100/Project/Month (Web)
$5/User/Month (Mobile)
Pricing Strategy Rational Competitive Analysis
Cost of Production N/A
Rollout is a cloud-based software platform that allows architects, engineers, and contractors to access and
manage drawings from any device.
Supporting Issuer Provided Documentation:
“Executive Summary.pdf”
People
Management Team
First impression of the principals
The Rollout team made a very positive first impression, showing
high enthusiasm in pitching their product. This is clearly a team
that can sell, as demonstrated by their successful results in pitch
competitions.
Experience in space and with startups
Rollout’s management team is comprised of Matt Hinson and
Alejandro Jacobo. While these two individuals previously
collaborated on a startup called BrainFund, their overall startup
experience is minimal. However, Matt Hinson has seven years of
construction and consulting experience in the AEC space, and has
experienced the frustrations and inefficiencies of the industry
firsthand. Alejandro Jacobo has a sales background and is
primarily responsible for business development.
Plans for change
There are currently no plans for a change in management. There
is a clear division of labor that matches the skillsets of each
manager.
Track record of success
Rollout has won several pitch competitions with their
cumulative winnings being more than approximately $90,000.
They are currently in a beta with select users testing their
product. They are already experiencing conversion to paying
customers, despite being in beta. They have more than 70 firms
signed up that want to test the platform, and potentially
become long-termpaying customers.
Review of compensation
To date, management has been taking nearly nothing in salaries
and the firm’s current burn rate is under approximately $5,000.
This funding round is expected to increase the burn rate to more
considerable levels to fuel higher growth. The company has
been effectively bootstrapped, and their provided use of funds
lists only $26,040 in salaries for all three founders through
March of 2016.
Incentivized management
Management appears to have appropriate incentives in place in
the form of equity arrangements, no salaries, and considerable
time spent building the business.
Matt Hinson
Alejandro Jacobo
Supporting Issuer Provided Documentation:
“Management Bios.pdf”
Desired communication level with investors
People
Is the founder a serial
entrepreneur?
Did we receive resumes for the
founder and key personnel?
No, but Alejandro Jacobo and Matt Hinson previously collaborated on
BrainFund.
No. However we did receive detailed bios of the founders, and
reviewed their Linkedin profiles.
Supporting Team Management’s supporting team is comprised of two individuals,
including one software development intern. See below for more
detail.
Are founders and key employees
vesting overtime?
Key hires and candidates:
James Wagner
• Software Engineer
• 2 years professional experience at Entrust, Inc.
• B.S. in computer engineering from UTD
Kirk Ballou
• 10 years software development experience
• Chief Architect at Touch Titans, LLC
• B.S. Computer Information Systems
Management Team
Level of education
Domain expertise
Was a background check performed?
Were references provided and checked?
Prior direct selling experience?
Unsettled management team conflicts?
Compatibility of team members
Willingness to share equity?
Outside activities/distractions
Matt Hinson has seven years of construction and consulting
experience in the AEC industry.
Matt Hinson has an MBA and a Master’s Degree in Innovation and
Entrepreneurship. Alejandro Jacobo has a B.S. in Business
Management.
To be determined.
Industry
Relevant Industries: Reprographics and AEC
Current AEC Overview
Economic Outlook: The industry is projected to continue a positive trend that started in 2011, and is
expected to generate approximately $1,072.1 billion in 2016.
1
Industry Trends: The AEC industry has gradually been moving towards undertaking more complex and larger
scale projects every year. An apparent industry demand for proven business management tools has arisen
as increased need for transparency and adaptability cause bottlenecks to develop within AEC industry
ventures.
2
Adoption trends of cloud-based and digitized management tools has begun to take traction
among AEC institutions.
3
Demographic Shifts: The construction industry is on the verge of a seismic shift in workforce demographics.
There is a large generation gap among construction professionals, and as the “Baby Boomer” generation
begins retiring, its replacements are largely flowing in from “Generation Y,” or the “Millennials.” This
generation of young professions has grown up with technology, social media, and has already begun
incorporating it in other industries.
Includes architects, project managers, engineers, superintendents,
estimators, real estate professionals, and subcontractors.
Reprographics (Technology) Industry Size: $4.5 billion
Architecture, Engineering,
and Construction (AEC)
Industry Size: $960 billion
Relationship between the Reprographics and AEC Industries
Since construction documents are the primary medium of communication within the AEC industry, demand
for reprographics products and services in the AEC market is closely tied to the level of activity in the
construction industry.
The reprographics industry is a technology industry that specializes in the
reproduction of graphics through mechanical or electrical means.
Current Reprographics Overview
The reprographics industry has become a more important technology sector in the past decade. Trends
towards that digitization of formerly tangible means of documentation have been apparent across various
industries.
1
http://www.statista.com/statistics/226368/projected-value-of-total-us-construction/
2
http://www.reportlinker.com/p03007405-summary/Engineering-Software-CAD-CAM-CAE-
AEC-EDA-Market-Global-Industry-Analysis-Size-Share-Growth-Trends-and-Forecast-.html
3
https:/www.to-increase.com/blog/posts/aec-industry-trends/#.VdUpy_SLHqV
Current Outlook
Analysts are predicting a looming credit tightening and market turnaround in the near future. Such a
movement would negatively impact the AEC space and reduce new construction and renovation projects.
However, Rollout management stresses that they are a cost saver and that while the number of projects per
client will decrease, they do not expect to lose clients or market share during any economic downturn.
Market
Market Plan
Rollout is starting with construction firms because they are the “low hanging fruit” and have the greatest
need for their product. These clients will then serve as a reference for other customer segments, including
Oil & Gas P&IDs, the U.S. Army, home builders, and city and municipalities building inspection departments.
Market opportunity
The total addressable market for Rollout products is approximately 847,000 US firms or 12 million
individuals in the U.S., and approximately 3,000,000 firms worldwide or 25 million individuals worldwide.
This equates to a total addressable market opportunity of $100 billion dollar worldwide for Rollout
products.
Customers
Rollout’s initial customers are construction management firms. Rollout has done extensive customer
discovery, and met with several construction and architecture firms, including Austin Commercial, Hunt
Construction, Rogers O’Brien, Mycon Construction, EMJ, Structure Tone, Beck, Turner, HKS Architects,
Mario Sinacola and Sons, and Webber. Furthermore, Rollout already has several customers with additional
letters of intent to purchase.
Rollout is currently in the late beta stage, where it has 70 firms signed up to be beta users. The first beta
users have already begun converting into paying clients.
How is this product purchased? Directly through the website
Are customers ready to purchase
this product?
Yes
Are there any switching costs? No
Likelihood of adoption High
Likelihood of retention High
Complementary Products Computers, tablets, and smart
phones
Supporting Issuer Provided Documentation:
“Go to Market Strategy.pdf”
Marketing Strategy
Marketing
Direct selling
& word-of-
mouth
Search
engine
optimization
Advertising
in industry
journals
Article
showcases
Rollout plans to market itself by word-of-mouth, search engine optimization, article showcases, extensive
cold calling, and advertising in industry journals. To date, Rollout has been primarily relying on site and office
visits to gain Beta testers and introduce their product to the market. However, they plan to allocate a
significant portion of their revenues towards marketing over the next 3 years. Their primary growth plan is
dependent on cold calling and referrals.
• Advertise in magazines such
as AEC Bytes, AEC Business
Magazine, and American
Institute of Architects
• Target publications such as
Engineering News Record,
Constructech Magazine, and
The Associated General
Contractors of America for
informational articles to reach
customers.
• Cold calls/ Emails
• Warm calls/ Emails/ Social media
• Site visits
• Office visits
• Industry expos and conferences
• SEO to become more visible
through organic searches
on Google and other search
engines.
Supporting Issuer Provided Documentation:
“Go to Market Strategy.pdf”
Competition
Competitors:
? Bluebeam
? Aproplan
? PlanGrid
? Procore
? SmartUse
? Latista
Ability to compete and competitive advantage
Rollout has a different pricing model, higher ease of use, and greater collaboration within projects. The
Rollout platform is priced at a significant discount to their nearest competitors, as the other firms are
charging customers up to several hundred dollars per user per month while Rollout charges per project per
month. There is a greater emphasis on collaboration and document markup, versus simply editing and
sharing .pdf files. These differences give Rollout the ability to compete and be a practical solution for smaller
firms and individuals in the AEC space as well as industry leaders; however, these differences do not
represent a sustainable competitive advantage. Continued product development will be necessary for
sustained growth.
Scoring Rubric Alt 1 Alt 2 Alt 3 Alt 4 Alt 5 Alt 6
Value Creation Elements Score 0-10 Rollout PlanGrid Latista SmartUse Aproplan Procore
1Enterprise Management Max = 10 8 5 9 9 9 9
2Open API Max = 10 8 1 1 7 1 9
3Ease of Use Max = 10 9 9 5 5 5 5
4Pricing Model Max = 10 10 3 3 3 9 4
5"Whole Product" Ecosystem Max = 10 9 1 3 7 1 1
6Database Querying Max = 10 10 3 5 5 5 5
7Markup Collaboration Max = 10 10 1 1 1 1 1
8Markup Filtering Max = 10 10 1 1 1 1 1
9Training Required Max = 10 9 9 2 5 5 5
Defendable Market
It is worth noting that Rollout’s price point and features make it an affordable and practical solution for
smaller businesses, including independent handymen, contractors, and the smallest construction firms. These
smaller clients appear to be underserved by the current industry competitors, who are targeting major
construction and architecture firms. While Rollout is also targeting the large companies in the space, they
have an exclusive appeal for smaller businesses at the current time.
Supporting Issuer Provided Documentation:
“Rollout Pitch Deck.pdf”
Risk Factors
Risk 1:
Adoption by the construction industry,
which has historically been a laggard in
technology adoption.
Mitigating the risk
Rollout has spent the past year meeting face to face with
potential customers in the AEC industry. The sizes of the
companies ranged from a five-person shop to ENR Top 100 firms.
Rollout’s team has developed industry relationships and gauged
the pain and need posed by their current solutions and
processes. Rollout has validated that these companies are willing
to test and eventually purchase Rollout, having signed up over 70
companies for beta trials, including names such as Austin
Commercial, the Beck Group, Mycon General Contractors, Mario
Sinacola Companies, Rogers-O’Brien, Whiting-Turner, Webber,
among many others.
The shift of the “Millennial” generation into the industry also
contributes to the likelihood of adoption by AEC institutions.
Risk 2:
Execution risk
Mitigating the risk
Rollout’s Founder & CEO, Matt Hinson, is a veteran of the
construction industry with 7+ years of experience in commercial
and residential construction. Matt has an MBA and a Master’s
Degree in Innovation and Entrepreneurship, and he is very well-
connected in the construction industry. He knows how Rollout’s
customers make purchase decisions and what drives those
decisions.
Rollout contracted a reputable software development firm to
build out the bulk of the core feature set and back end to ensure
timely delivery, and has a development team led by Advisor Kirk
Ballou, who has over ten years of software development
experience, and lead software developer and CoFounder, James
Wagner, who has three years of experience in data security and
software architecture.
Risk 3:
Competition risk
Mitigating the risk
Rollout has a few competitors in the industry, each with a
different business model and pricing strategy. Rollout has
gathered customer feedback about AEC solutions and what keeps
them from using them or what would make them switch to
Rollout. Rollout used this feedback to provide a product better
suited, better priced, and better featured for the construction
industry. They looked at what points of parity to similar platforms
they needed to offer, as well as what differentiating factors to
incorporate. The result is a system that is easier to use, with
differentiating collaboration and versioning features that set
Rollout apart, all at a more affordable and better-structured
price-point for our customers.
Supporting Issuer Provided Documentation:
“Risk Factors.pdf”
Rollout: Secondary Review Financial Review
Capital raised to date, valuation
To date, Rollout has raised
$230,000 in cash, $90,000
through local pitch competitions,
and $166,667 through in-kind
investments.
Current Investors
To date, investors in Rollout
include venture capital firms,
directors at the University of
Texas at Dallas, Rollout’s
founders, various individuals,
and a family member.
Has previous capital been effectively deployed?
To date, capital appears to have been relatively effectively deployed and the firm’s bootstrapping has been
effective. Previous funds have primarily been used on software and hardware development, patents,
trademarks, marketing, equipment, and payroll. They also did an in-kind arrangement with Touch Titans,
trading $166,667 worth of equity for development services.
Smart money investors
Rollout does not need smart
money investors due to its
experienced advisory board, all
of whom are AEC professionals.
Additionally, Matt Hinson has
approximately seven years of
direct experience in the
construction and consulting
industry. Any investors with
meaningful real estate,
construction, or architecture
connections are valuable, but
not strictly necessary.
Exit possibilities – IPO,
acquisition, earn out
Rollout expects an exit through
acquisition by a technology firm
that offers software solutions such as Autodesk, Google, and American Reprographics Corporation (ARC).
Management reports that exits by similar technology companies in their sector have been primarily
acquisitions at considerable valuations.
Supporting Issuer Provided Documentation:
“Rollout Financial Summary.pdf”
Cash In Kind Combined
Seed Round 1 117,000 166,667 283,667
Seed Round 2 90,000 10,000 100,000
Total 207,000 $ 176,667 $ 383,667 $
Round 1 Funds Allocation:
Hardware Development 47,272
Software Development 215,556
Marketing 11,595
Computers & Equipment 3,264
Patents & Trademarks 18,343
Payroll Liabilities 637
Total 296,667 $
Time Period: 05/2014 - 07/2015
Monthly Burn Rate (Salaries & Overhead): $3,040
Annual Burn Rate: $36,480
Round 2 Funds Allocation:
See "Use of Funds" document
Date: 09/2015 - Present
Payroll Tax Payable
Development Costs
Development Costs
Machinery & Goodwill
Goodwill
Investor Class Percent of Total Raised
Individual Investors 46.1%
Other 7.8%
In Kind 46.0%
Total 100.0%
Projected use of funds
Usage of funds is primarily comprised of continued product development, preparing PaperLight for
consumer use, marketing, and additional employees.
Rollout: Secondary Review Financial Review
Cap table
Supporting Issuer Provided Documentation:
“Cap Table.pdf”
“Funding Usage.pdf”
Rollout, Inc. Capitalization Table
10/8/2015
Owners Current Equity
Founders
Convertible Debt Val Cap
Convertible Notes Round 1 3,333,333
Convertible Notes Round 2 5,000,000
283,667
100,000
25%
25%
Common Shares Preferred Shares
6,000,000
Value Discount Terms
STATEMENT OF OPERATIONS In Dollars (000)
Year 1 Year 2 Year 3 Year 4 Year 5
Revenues
Rollout Project 399 3,010 9,847 20,506 36,453
Rollout Pro
TM
389 3,795 16,804 40,536 76,693
Rollout Enterprise
TM
Info Mgmt - - - 3,516 6,407
Rollout PaperLight
TM
- 798 3,464 8,464 15,200
Gross Revenues 788 7,603 30,114 73,023 134,754
Credit card processing fees (24) (228) (903) (2,191) (4,043)
Net Revenues $764 $7,375 $29,211 $70,832 $130,711
Direct Cost of Sales
Rollout Project $35 $272 $919 $1,983 $3,534
Rollout Pro
TM
$58 $581 $2,626 $6,469 $12,238
Rollout PaperLight
TM
$0 $0 $0 $281 $511
Rollout Enterprise
TM
Info Mgmt $0 $345 $1,630 $3,784 $6,796
Total Direct Cost of Sales $94 $1,198 $5,174 $12,516 $23,079
Gross Profit $670 $6,177 $24,037 $58,316 $107,632
Percent of Total Revenues 85.1% 81.2% 79.8% 79.9% 79.9%
Operating Expenses
Sales & Marketing 1,016 2,338 6,385 11,777 19,052
Product & Technology Development 309 2,452 7,531 13,277 20,766
General & Administrative 146 749 1,767 3,060 4,729
Total Operating Expenses $1,470 $5,540 $15,682 $28,115 $44,546
Percent of Total Revenues 186.7% 72.9% 52.1% 38.5% 33.1%
Net Income Before Bonus & Taxes (800) 637 8,354 30,201 63,086
Bonuses (15% of Net Income) 0 96 1,253 1,837 2,290
Pretax Income (800) 732 9,608 32,038 65,376
Provision for Federal Income Tax 0 0 (3,363) (11,213) (22,881)
Net Income (800) 732 6,245 20,825 42,494
Percent of Total Revenues -101.6% 9.6% 20.7% 28.5% 31.5%
Business and Financial Model
Responsiveness of issuer
The issuer’s management has been extremely responsive, providing all the information requested within a
couple of days in an organized manner. They have been easy to schedule meetings and calls with, and have
been able to quickly and thoroughly address any questions as they have come up.
Comprehensive business plan review
This issuer does not have a formal business plan, at least they do not have an up-to-date business plan.
MassCatalyst requested and received the following information: general description of the company and
summary of operations, historical financials, management bios, investor pitch deck, projected financials,
company bylaws, articles of incorporation, investment term sheet, offering documents from previous round,
company cap table, list of primary risk factors facing the business, descriptions of any subsidiaries and joint
ventures, detailed use of funds, a list of potential exit opportunities, and a video.
Collectively, these created a clear picture of the business plan and corporate strategy.
Business financial model
1. Rollout Enterprise: $100.00 per
project, per month with
unlimited users.
2. Rollout Pro: $5.00 per user, per
month
3. PaperLight: Estimated $2,500
per unit
Financial model / statement review
• Rollout’s financial model details
their financial projections and
assumptions.
• They formed growth estimates by
building up the number of cold
calls their sales team could
perform per month with an
estimated conversion rate.
• Each cold call was broken into a
set of outcomes: webinar, free
trial, face to face meeting, or no
interest. Each outcome has an
assumed conversion rate.
• They also built up estimates of
referrals, transitioning from a cold
calling model to a client referral
model by Year 5.
• These estimates were used to
build up the number of active
clients.
• These figures were broken down
into estimates for their product
lines: Rollout Enterprise, Rollout
Pro, and PaperLight.
• They did a separate analysis of
future staffing needs, direct cost
of sales, office expenses, and
other operating expenses.
• Rollout also provided a
projected balance sheet,
cash flow statement, and
ultimately a valuation.
Supporting Issuer Provided Documentation:
“Projected Financials.xlsx”
Rivalry
Amongst
Existing
Competitors
Threat of
New
Entrants
Bargaining
Power of
Buyers
Threat of
Substitutes
Bargaining
Power of
Suppliers
Threat of new entry:
• Rollout has a few competitors
in the industry, each with a
different business model and
pricing strategy.
• Rollout's technology appears
to be competitive in
functionality compared to
their competitors and threat
of new entrants is relatively
low because of the product
development timeline,
industry experience required,
and niche nature of the
product.
Competitive Rivalry:
• Competitive rivalry is low.
Their competitors have
different business models
and value propositions.
• The industry is very large
and there is no one
company with commanding
market share.
Bargaining power of suppliers:
• The bargaining power of
suppliers is low. Rollout’s
main forecasted revenue
source is technology based
and not capital intensive.
Bargaining power of buyers:
• The bargaining power of
customers is relatively low.
• The pricing model of Rollout
allows for the product to be
streamlined as a line item in
a General Contractor’s
project budget, and permits
free use for subcontractors.
• The technology shows the
potential to become an
inelastic need of the
industry.
Porter’s 5 Forces Analysis
Threat of Substitution:
• The threat of substitute
products or services is
moderate.
• Rollout has significant
competitive advantage in
providing an easy to use
system, with differentiating
collaboration and
versioning features that
other products and services
do not have.
Supporting Issuer Provided Documentation:
Discussions with Management
Examine third-party reports
There are no third parties
involved.
Reference checks (in and out of
sample):
• Reference checks with
members of Dallas startup
community (with Rollout)
performed
• Reference checks with
company’s advisors at UT
Dallas performed
• Rollout Enterprise and
PaperLight were demoed for
the MassCatalyst team
• Rollout is willing to let
potential investors talk to
their early adopter clients.
FINRA regulation notice 10-22 reasonable
investigation practices checklist
Obtaining and reviewing expert
opinions (if an energy and
exploration program):
N/A
Review contracts, leases,
financing arrangements and
other similar documents:
Satisfactory.
Review affiliates and any
financial reliance on issuer:
Rollout currently has no
affiliates or joint ventures.
Review issuer's credit
creditworthiness:
Completed.
Visit issuer's facilities and
inspect assets (if necessary):
A site visit has been conducted
by the MassCatalyst venture
team. The issuer is working out
of the incubation center at the
University of Texas Dallas
campus. They are receiving
considerable resources for free,
beyond simply their physical
facilities.
Red flags
None at this time.
Willingness to pay Broker-
dealer:
High.
NCPS issuer review meeting
Approved by broker-dealer.
Document Review &
execution
Verified
Additional Data
Execute Placement Agreement
Review of Offering Materials
Discuss / Revise Deal Terms
Execute CrowdCheck Due Diligence
Execute bad actor, reps, and warranties Pre-marketing, Indication of Interest
Develop risk disclosures
Review of offering materials
Reference Checks (In and out of sample)
Company Documents Deal Documents
Investment Committee approval
Approved
Approval of materials
Approved
Status
Offering is live.
Reporting Items
Launch Offering
NCPS Deal Summary
PPM / Term Sheet
Purchase Agreement
Escrow Agreement
Subscription Document
NCPS Fee Notice
CrowdCheck Summary
Pitch book / deck
Use of Proceeds
Historical Financials
Financial Projections
Financial Models
Certificate of Incorporation
Capitalization Table
doc_507013608.pdf
Rollout is a cloud-based drawing management software platform built for Architecture, Engineering, and Construction professionals.
Current Valuation
Rollout has a valuation of
$5,000,000 for this round
based on a previous
transaction.
Capital Requirements
$250,000
Offering Type
Reg-D 506(c), Convertible
Note
Timeline
45-60 days
Capital Raised to Date
Rollout has raised $230,000
cash, and $90,000 through
local pitch competitions.
Contact Information
Matt Hinson, CEO
Cell: (832) 385 – 3511
Email: [email protected]
Alejandro Jacobo
Cell: (979) 676 - 1663
Email: [email protected]
Business Model Overview
Rollout is a cloud-based drawing management software platform built for
Architecture, Engineering, and Construction professionals. The platform allows
for viewing and managing drawings and blueprints online, intelligent markups
to help track changes, and collaboration tools to make the entire process
significantly more efficient. The company generates revenue by charging
$100.00 per project per month for their web application, and by charging $5.00
per user per month for their mobile app. Rollout also has a prototype hardware
business called PaperLight, which uses projection technology and a touch
screen surface to entirely eliminate paper documents fromthe workplace.
General Information
Value Proposition
Rollout provides three pillars of
value: sheet management, intelligent
mark-ups, and social collaboration.
Rollout ensures that the entire
project team is working off of the
latest set of drawing revisions by
utilizing dedicated slots for each
sheet. Users can turn on markups
made by other team members for
better communication and to track
markup history. Rollout acts like a
social media application for work
where every user has a perpetual
account allowing for quickly sharing
revisions and posting comments.
Industry Technology
Sector AEC
Venture Stage Seed
Current
Revenue
$500/month
Current Share
Price
$0.56
Entity Type C-Corp
State of
Formation
Delaware
Rollout - Issuer Report
Company Website
http://www.rolloutaec.com/
Rollout ‘s Objective
To become the de facto standard
drawing management software in
the construction industry.
Product Demo Video
http://bitly.com/RolloutVid
Product
Does it solve a burning need?
Have we seen a live demo and does it work?
Has a patent application been submitted?
Scalability of the product?
Supplier risk rating?
Cost to support the product?
Key product differentiators? Rollout’s competitive edge:
• Different pricing model allowing for easy onboarding.
• Industry specific software for greater functionality.
• Greater emphasis on intelligent markup mechanisms and
collaboration tools than their competitors.
How does the quality compare to
competing products?
List the primary product features • Quickly upload .pdf files, which are converted into
Rollout’s own file format.
• Easily change supporting information about each file to
better track versions and changes.
• Make a variety of markups and notes online to be shared
with clear version control.
• Ability to easily share changes and begin comment threads
on specific changes or entire revisions.
• Download documents in moments.
• Integration with Box and Dropbox coming soon.
Product Summary
Rollout is a cost effective alternative to hardcopy drawing
management tools and processes. The industry is primarily
reliant on applications like box.com to share .pdf files while
still using a variety of editing software and heavily relying on
paper. This product makes the workplace more efficient and
each AEC project cheaper.
Product Life Cycle Stage Introduction
Pricing Strategy: $100/Project/Month (Web)
$5/User/Month (Mobile)
Pricing Strategy Rational Competitive Analysis
Cost of Production N/A
Rollout is a cloud-based software platform that allows architects, engineers, and contractors to access and
manage drawings from any device.
Supporting Issuer Provided Documentation:
“Executive Summary.pdf”
People
Management Team
First impression of the principals
The Rollout team made a very positive first impression, showing
high enthusiasm in pitching their product. This is clearly a team
that can sell, as demonstrated by their successful results in pitch
competitions.
Experience in space and with startups
Rollout’s management team is comprised of Matt Hinson and
Alejandro Jacobo. While these two individuals previously
collaborated on a startup called BrainFund, their overall startup
experience is minimal. However, Matt Hinson has seven years of
construction and consulting experience in the AEC space, and has
experienced the frustrations and inefficiencies of the industry
firsthand. Alejandro Jacobo has a sales background and is
primarily responsible for business development.
Plans for change
There are currently no plans for a change in management. There
is a clear division of labor that matches the skillsets of each
manager.
Track record of success
Rollout has won several pitch competitions with their
cumulative winnings being more than approximately $90,000.
They are currently in a beta with select users testing their
product. They are already experiencing conversion to paying
customers, despite being in beta. They have more than 70 firms
signed up that want to test the platform, and potentially
become long-termpaying customers.
Review of compensation
To date, management has been taking nearly nothing in salaries
and the firm’s current burn rate is under approximately $5,000.
This funding round is expected to increase the burn rate to more
considerable levels to fuel higher growth. The company has
been effectively bootstrapped, and their provided use of funds
lists only $26,040 in salaries for all three founders through
March of 2016.
Incentivized management
Management appears to have appropriate incentives in place in
the form of equity arrangements, no salaries, and considerable
time spent building the business.
Matt Hinson
Alejandro Jacobo
Supporting Issuer Provided Documentation:
“Management Bios.pdf”
Desired communication level with investors
People
Is the founder a serial
entrepreneur?
Did we receive resumes for the
founder and key personnel?
No, but Alejandro Jacobo and Matt Hinson previously collaborated on
BrainFund.
No. However we did receive detailed bios of the founders, and
reviewed their Linkedin profiles.
Supporting Team Management’s supporting team is comprised of two individuals,
including one software development intern. See below for more
detail.
Are founders and key employees
vesting overtime?
Key hires and candidates:
James Wagner
• Software Engineer
• 2 years professional experience at Entrust, Inc.
• B.S. in computer engineering from UTD
Kirk Ballou
• 10 years software development experience
• Chief Architect at Touch Titans, LLC
• B.S. Computer Information Systems
Management Team
Level of education
Domain expertise
Was a background check performed?
Were references provided and checked?
Prior direct selling experience?
Unsettled management team conflicts?
Compatibility of team members
Willingness to share equity?
Outside activities/distractions
Matt Hinson has seven years of construction and consulting
experience in the AEC industry.
Matt Hinson has an MBA and a Master’s Degree in Innovation and
Entrepreneurship. Alejandro Jacobo has a B.S. in Business
Management.
To be determined.
Industry
Relevant Industries: Reprographics and AEC
Current AEC Overview
Economic Outlook: The industry is projected to continue a positive trend that started in 2011, and is
expected to generate approximately $1,072.1 billion in 2016.
1
Industry Trends: The AEC industry has gradually been moving towards undertaking more complex and larger
scale projects every year. An apparent industry demand for proven business management tools has arisen
as increased need for transparency and adaptability cause bottlenecks to develop within AEC industry
ventures.
2
Adoption trends of cloud-based and digitized management tools has begun to take traction
among AEC institutions.
3
Demographic Shifts: The construction industry is on the verge of a seismic shift in workforce demographics.
There is a large generation gap among construction professionals, and as the “Baby Boomer” generation
begins retiring, its replacements are largely flowing in from “Generation Y,” or the “Millennials.” This
generation of young professions has grown up with technology, social media, and has already begun
incorporating it in other industries.
Includes architects, project managers, engineers, superintendents,
estimators, real estate professionals, and subcontractors.
Reprographics (Technology) Industry Size: $4.5 billion
Architecture, Engineering,
and Construction (AEC)
Industry Size: $960 billion
Relationship between the Reprographics and AEC Industries
Since construction documents are the primary medium of communication within the AEC industry, demand
for reprographics products and services in the AEC market is closely tied to the level of activity in the
construction industry.
The reprographics industry is a technology industry that specializes in the
reproduction of graphics through mechanical or electrical means.
Current Reprographics Overview
The reprographics industry has become a more important technology sector in the past decade. Trends
towards that digitization of formerly tangible means of documentation have been apparent across various
industries.
1
http://www.statista.com/statistics/226368/projected-value-of-total-us-construction/
2
http://www.reportlinker.com/p03007405-summary/Engineering-Software-CAD-CAM-CAE-
AEC-EDA-Market-Global-Industry-Analysis-Size-Share-Growth-Trends-and-Forecast-.html
3
https:/www.to-increase.com/blog/posts/aec-industry-trends/#.VdUpy_SLHqV
Current Outlook
Analysts are predicting a looming credit tightening and market turnaround in the near future. Such a
movement would negatively impact the AEC space and reduce new construction and renovation projects.
However, Rollout management stresses that they are a cost saver and that while the number of projects per
client will decrease, they do not expect to lose clients or market share during any economic downturn.
Market
Market Plan
Rollout is starting with construction firms because they are the “low hanging fruit” and have the greatest
need for their product. These clients will then serve as a reference for other customer segments, including
Oil & Gas P&IDs, the U.S. Army, home builders, and city and municipalities building inspection departments.
Market opportunity
The total addressable market for Rollout products is approximately 847,000 US firms or 12 million
individuals in the U.S., and approximately 3,000,000 firms worldwide or 25 million individuals worldwide.
This equates to a total addressable market opportunity of $100 billion dollar worldwide for Rollout
products.
Customers
Rollout’s initial customers are construction management firms. Rollout has done extensive customer
discovery, and met with several construction and architecture firms, including Austin Commercial, Hunt
Construction, Rogers O’Brien, Mycon Construction, EMJ, Structure Tone, Beck, Turner, HKS Architects,
Mario Sinacola and Sons, and Webber. Furthermore, Rollout already has several customers with additional
letters of intent to purchase.
Rollout is currently in the late beta stage, where it has 70 firms signed up to be beta users. The first beta
users have already begun converting into paying clients.
How is this product purchased? Directly through the website
Are customers ready to purchase
this product?
Yes
Are there any switching costs? No
Likelihood of adoption High
Likelihood of retention High
Complementary Products Computers, tablets, and smart
phones
Supporting Issuer Provided Documentation:
“Go to Market Strategy.pdf”
Marketing Strategy
Marketing
Direct selling
& word-of-
mouth
Search
engine
optimization
Advertising
in industry
journals
Article
showcases
Rollout plans to market itself by word-of-mouth, search engine optimization, article showcases, extensive
cold calling, and advertising in industry journals. To date, Rollout has been primarily relying on site and office
visits to gain Beta testers and introduce their product to the market. However, they plan to allocate a
significant portion of their revenues towards marketing over the next 3 years. Their primary growth plan is
dependent on cold calling and referrals.
• Advertise in magazines such
as AEC Bytes, AEC Business
Magazine, and American
Institute of Architects
• Target publications such as
Engineering News Record,
Constructech Magazine, and
The Associated General
Contractors of America for
informational articles to reach
customers.
• Cold calls/ Emails
• Warm calls/ Emails/ Social media
• Site visits
• Office visits
• Industry expos and conferences
• SEO to become more visible
through organic searches
on Google and other search
engines.
Supporting Issuer Provided Documentation:
“Go to Market Strategy.pdf”
Competition
Competitors:
? Bluebeam
? Aproplan
? PlanGrid
? Procore
? SmartUse
? Latista
Ability to compete and competitive advantage
Rollout has a different pricing model, higher ease of use, and greater collaboration within projects. The
Rollout platform is priced at a significant discount to their nearest competitors, as the other firms are
charging customers up to several hundred dollars per user per month while Rollout charges per project per
month. There is a greater emphasis on collaboration and document markup, versus simply editing and
sharing .pdf files. These differences give Rollout the ability to compete and be a practical solution for smaller
firms and individuals in the AEC space as well as industry leaders; however, these differences do not
represent a sustainable competitive advantage. Continued product development will be necessary for
sustained growth.
Scoring Rubric Alt 1 Alt 2 Alt 3 Alt 4 Alt 5 Alt 6
Value Creation Elements Score 0-10 Rollout PlanGrid Latista SmartUse Aproplan Procore
1Enterprise Management Max = 10 8 5 9 9 9 9
2Open API Max = 10 8 1 1 7 1 9
3Ease of Use Max = 10 9 9 5 5 5 5
4Pricing Model Max = 10 10 3 3 3 9 4
5"Whole Product" Ecosystem Max = 10 9 1 3 7 1 1
6Database Querying Max = 10 10 3 5 5 5 5
7Markup Collaboration Max = 10 10 1 1 1 1 1
8Markup Filtering Max = 10 10 1 1 1 1 1
9Training Required Max = 10 9 9 2 5 5 5
Defendable Market
It is worth noting that Rollout’s price point and features make it an affordable and practical solution for
smaller businesses, including independent handymen, contractors, and the smallest construction firms. These
smaller clients appear to be underserved by the current industry competitors, who are targeting major
construction and architecture firms. While Rollout is also targeting the large companies in the space, they
have an exclusive appeal for smaller businesses at the current time.
Supporting Issuer Provided Documentation:
“Rollout Pitch Deck.pdf”
Risk Factors
Risk 1:
Adoption by the construction industry,
which has historically been a laggard in
technology adoption.
Mitigating the risk
Rollout has spent the past year meeting face to face with
potential customers in the AEC industry. The sizes of the
companies ranged from a five-person shop to ENR Top 100 firms.
Rollout’s team has developed industry relationships and gauged
the pain and need posed by their current solutions and
processes. Rollout has validated that these companies are willing
to test and eventually purchase Rollout, having signed up over 70
companies for beta trials, including names such as Austin
Commercial, the Beck Group, Mycon General Contractors, Mario
Sinacola Companies, Rogers-O’Brien, Whiting-Turner, Webber,
among many others.
The shift of the “Millennial” generation into the industry also
contributes to the likelihood of adoption by AEC institutions.
Risk 2:
Execution risk
Mitigating the risk
Rollout’s Founder & CEO, Matt Hinson, is a veteran of the
construction industry with 7+ years of experience in commercial
and residential construction. Matt has an MBA and a Master’s
Degree in Innovation and Entrepreneurship, and he is very well-
connected in the construction industry. He knows how Rollout’s
customers make purchase decisions and what drives those
decisions.
Rollout contracted a reputable software development firm to
build out the bulk of the core feature set and back end to ensure
timely delivery, and has a development team led by Advisor Kirk
Ballou, who has over ten years of software development
experience, and lead software developer and CoFounder, James
Wagner, who has three years of experience in data security and
software architecture.
Risk 3:
Competition risk
Mitigating the risk
Rollout has a few competitors in the industry, each with a
different business model and pricing strategy. Rollout has
gathered customer feedback about AEC solutions and what keeps
them from using them or what would make them switch to
Rollout. Rollout used this feedback to provide a product better
suited, better priced, and better featured for the construction
industry. They looked at what points of parity to similar platforms
they needed to offer, as well as what differentiating factors to
incorporate. The result is a system that is easier to use, with
differentiating collaboration and versioning features that set
Rollout apart, all at a more affordable and better-structured
price-point for our customers.
Supporting Issuer Provided Documentation:
“Risk Factors.pdf”
Rollout: Secondary Review Financial Review
Capital raised to date, valuation
To date, Rollout has raised
$230,000 in cash, $90,000
through local pitch competitions,
and $166,667 through in-kind
investments.
Current Investors
To date, investors in Rollout
include venture capital firms,
directors at the University of
Texas at Dallas, Rollout’s
founders, various individuals,
and a family member.
Has previous capital been effectively deployed?
To date, capital appears to have been relatively effectively deployed and the firm’s bootstrapping has been
effective. Previous funds have primarily been used on software and hardware development, patents,
trademarks, marketing, equipment, and payroll. They also did an in-kind arrangement with Touch Titans,
trading $166,667 worth of equity for development services.
Smart money investors
Rollout does not need smart
money investors due to its
experienced advisory board, all
of whom are AEC professionals.
Additionally, Matt Hinson has
approximately seven years of
direct experience in the
construction and consulting
industry. Any investors with
meaningful real estate,
construction, or architecture
connections are valuable, but
not strictly necessary.
Exit possibilities – IPO,
acquisition, earn out
Rollout expects an exit through
acquisition by a technology firm
that offers software solutions such as Autodesk, Google, and American Reprographics Corporation (ARC).
Management reports that exits by similar technology companies in their sector have been primarily
acquisitions at considerable valuations.
Supporting Issuer Provided Documentation:
“Rollout Financial Summary.pdf”
Cash In Kind Combined
Seed Round 1 117,000 166,667 283,667
Seed Round 2 90,000 10,000 100,000
Total 207,000 $ 176,667 $ 383,667 $
Round 1 Funds Allocation:
Hardware Development 47,272
Software Development 215,556
Marketing 11,595
Computers & Equipment 3,264
Patents & Trademarks 18,343
Payroll Liabilities 637
Total 296,667 $
Time Period: 05/2014 - 07/2015
Monthly Burn Rate (Salaries & Overhead): $3,040
Annual Burn Rate: $36,480
Round 2 Funds Allocation:
See "Use of Funds" document
Date: 09/2015 - Present
Payroll Tax Payable
Development Costs
Development Costs
Machinery & Goodwill
Goodwill
Investor Class Percent of Total Raised
Individual Investors 46.1%
Other 7.8%
In Kind 46.0%
Total 100.0%
Projected use of funds
Usage of funds is primarily comprised of continued product development, preparing PaperLight for
consumer use, marketing, and additional employees.
Rollout: Secondary Review Financial Review
Cap table
Supporting Issuer Provided Documentation:
“Cap Table.pdf”
“Funding Usage.pdf”
Rollout, Inc. Capitalization Table
10/8/2015
Owners Current Equity
Founders
Convertible Debt Val Cap
Convertible Notes Round 1 3,333,333
Convertible Notes Round 2 5,000,000
283,667
100,000
25%
25%
Common Shares Preferred Shares
6,000,000
Value Discount Terms
STATEMENT OF OPERATIONS In Dollars (000)
Year 1 Year 2 Year 3 Year 4 Year 5
Revenues
Rollout Project 399 3,010 9,847 20,506 36,453
Rollout Pro
TM
389 3,795 16,804 40,536 76,693
Rollout Enterprise
TM
Info Mgmt - - - 3,516 6,407
Rollout PaperLight
TM
- 798 3,464 8,464 15,200
Gross Revenues 788 7,603 30,114 73,023 134,754
Credit card processing fees (24) (228) (903) (2,191) (4,043)
Net Revenues $764 $7,375 $29,211 $70,832 $130,711
Direct Cost of Sales
Rollout Project $35 $272 $919 $1,983 $3,534
Rollout Pro
TM
$58 $581 $2,626 $6,469 $12,238
Rollout PaperLight
TM
$0 $0 $0 $281 $511
Rollout Enterprise
TM
Info Mgmt $0 $345 $1,630 $3,784 $6,796
Total Direct Cost of Sales $94 $1,198 $5,174 $12,516 $23,079
Gross Profit $670 $6,177 $24,037 $58,316 $107,632
Percent of Total Revenues 85.1% 81.2% 79.8% 79.9% 79.9%
Operating Expenses
Sales & Marketing 1,016 2,338 6,385 11,777 19,052
Product & Technology Development 309 2,452 7,531 13,277 20,766
General & Administrative 146 749 1,767 3,060 4,729
Total Operating Expenses $1,470 $5,540 $15,682 $28,115 $44,546
Percent of Total Revenues 186.7% 72.9% 52.1% 38.5% 33.1%
Net Income Before Bonus & Taxes (800) 637 8,354 30,201 63,086
Bonuses (15% of Net Income) 0 96 1,253 1,837 2,290
Pretax Income (800) 732 9,608 32,038 65,376
Provision for Federal Income Tax 0 0 (3,363) (11,213) (22,881)
Net Income (800) 732 6,245 20,825 42,494
Percent of Total Revenues -101.6% 9.6% 20.7% 28.5% 31.5%
Business and Financial Model
Responsiveness of issuer
The issuer’s management has been extremely responsive, providing all the information requested within a
couple of days in an organized manner. They have been easy to schedule meetings and calls with, and have
been able to quickly and thoroughly address any questions as they have come up.
Comprehensive business plan review
This issuer does not have a formal business plan, at least they do not have an up-to-date business plan.
MassCatalyst requested and received the following information: general description of the company and
summary of operations, historical financials, management bios, investor pitch deck, projected financials,
company bylaws, articles of incorporation, investment term sheet, offering documents from previous round,
company cap table, list of primary risk factors facing the business, descriptions of any subsidiaries and joint
ventures, detailed use of funds, a list of potential exit opportunities, and a video.
Collectively, these created a clear picture of the business plan and corporate strategy.
Business financial model
1. Rollout Enterprise: $100.00 per
project, per month with
unlimited users.
2. Rollout Pro: $5.00 per user, per
month
3. PaperLight: Estimated $2,500
per unit
Financial model / statement review
• Rollout’s financial model details
their financial projections and
assumptions.
• They formed growth estimates by
building up the number of cold
calls their sales team could
perform per month with an
estimated conversion rate.
• Each cold call was broken into a
set of outcomes: webinar, free
trial, face to face meeting, or no
interest. Each outcome has an
assumed conversion rate.
• They also built up estimates of
referrals, transitioning from a cold
calling model to a client referral
model by Year 5.
• These estimates were used to
build up the number of active
clients.
• These figures were broken down
into estimates for their product
lines: Rollout Enterprise, Rollout
Pro, and PaperLight.
• They did a separate analysis of
future staffing needs, direct cost
of sales, office expenses, and
other operating expenses.
• Rollout also provided a
projected balance sheet,
cash flow statement, and
ultimately a valuation.
Supporting Issuer Provided Documentation:
“Projected Financials.xlsx”
Rivalry
Amongst
Existing
Competitors
Threat of
New
Entrants
Bargaining
Power of
Buyers
Threat of
Substitutes
Bargaining
Power of
Suppliers
Threat of new entry:
• Rollout has a few competitors
in the industry, each with a
different business model and
pricing strategy.
• Rollout's technology appears
to be competitive in
functionality compared to
their competitors and threat
of new entrants is relatively
low because of the product
development timeline,
industry experience required,
and niche nature of the
product.
Competitive Rivalry:
• Competitive rivalry is low.
Their competitors have
different business models
and value propositions.
• The industry is very large
and there is no one
company with commanding
market share.
Bargaining power of suppliers:
• The bargaining power of
suppliers is low. Rollout’s
main forecasted revenue
source is technology based
and not capital intensive.
Bargaining power of buyers:
• The bargaining power of
customers is relatively low.
• The pricing model of Rollout
allows for the product to be
streamlined as a line item in
a General Contractor’s
project budget, and permits
free use for subcontractors.
• The technology shows the
potential to become an
inelastic need of the
industry.
Porter’s 5 Forces Analysis
Threat of Substitution:
• The threat of substitute
products or services is
moderate.
• Rollout has significant
competitive advantage in
providing an easy to use
system, with differentiating
collaboration and
versioning features that
other products and services
do not have.
Supporting Issuer Provided Documentation:
Discussions with Management
Examine third-party reports
There are no third parties
involved.
Reference checks (in and out of
sample):
• Reference checks with
members of Dallas startup
community (with Rollout)
performed
• Reference checks with
company’s advisors at UT
Dallas performed
• Rollout Enterprise and
PaperLight were demoed for
the MassCatalyst team
• Rollout is willing to let
potential investors talk to
their early adopter clients.
FINRA regulation notice 10-22 reasonable
investigation practices checklist
Obtaining and reviewing expert
opinions (if an energy and
exploration program):
N/A
Review contracts, leases,
financing arrangements and
other similar documents:
Satisfactory.
Review affiliates and any
financial reliance on issuer:
Rollout currently has no
affiliates or joint ventures.
Review issuer's credit
creditworthiness:
Completed.
Visit issuer's facilities and
inspect assets (if necessary):
A site visit has been conducted
by the MassCatalyst venture
team. The issuer is working out
of the incubation center at the
University of Texas Dallas
campus. They are receiving
considerable resources for free,
beyond simply their physical
facilities.
Red flags
None at this time.
Willingness to pay Broker-
dealer:
High.
NCPS issuer review meeting
Approved by broker-dealer.
Document Review &
execution
Verified
Additional Data
Execute Placement Agreement
Review of Offering Materials
Discuss / Revise Deal Terms
Execute CrowdCheck Due Diligence
Execute bad actor, reps, and warranties Pre-marketing, Indication of Interest
Develop risk disclosures
Review of offering materials
Reference Checks (In and out of sample)
Company Documents Deal Documents
Investment Committee approval
Approved
Approval of materials
Approved
Status
Offering is live.
Reporting Items
Launch Offering
NCPS Deal Summary
PPM / Term Sheet
Purchase Agreement
Escrow Agreement
Subscription Document
NCPS Fee Notice
CrowdCheck Summary
Pitch book / deck
Use of Proceeds
Historical Financials
Financial Projections
Financial Models
Certificate of Incorporation
Capitalization Table
doc_507013608.pdf