Investors assessing the opportunity to buy shares in Knightscope always have a good amount of questions – especially now that practically anyone can invest in our Reg A+ IPO. They do their homework, comb through every available document, ask more questions and perhaps then rinse & repeat! But sometimes it is good for the CEO to offer a slightly different perspective.
So that is what I’m going to share here – the reasons why I personally think you should consider investing from my vantage point as the CEO of Knightscope. Of course, the decision is all yours after having considered everything – but these are hopefully more than just my 2 cents.
To put help put things in context you can also read “Why Did You Build Knightscope?” here so you have both my personal and professional motivations in clear sight.
1. Massive Unaddressed Market – over $500 billion is spent annually on security across the globe in both the private and public sectors and it is likely that $300 billion of that is addressable by our long-term plans. The security industry is not just large – it is highly fragmented with very little innovation and very little risk capital going into the industry to affect positive, meaningful change. In my view, it is one of those ‘sleepy sectors’ ripe for disruption and starving for innovation.
2. Recurring Revenue for a Recurring Need – sometimes investors worry, “will the market for your product collapse?” Are sedans, coupes or station wagons in this year? Will the flip phone, smart phone or no phone be the new trend? Are disappearing photos and messages really a thing? Well, I can assure you the ‘market for crime’ will likely never collapse! It’s not like 7 billion people on the planet are all going to wake up tomorrow, decide to get along and everything is going to run smoothly with no incidents, no threats, no problems. What if a company came up with a recurring revenue business model for a recurring societal need? Well, that is exactly what our Machine-as-a-Service (MaaS) does. It addresses an important need that society faces on a daily, recurring basis – better securing the places you work, study and visit.
3. Right Time, Right Place, Different Path – we are based in the heart of Silicon Valley in Mountain View, California and strongly believe that self-driving technology, robotics and artificial intelligence are going to make a profound impact on society in the coming decades. Although still in their infancies, the technologies have matured just enough to begin to create some real value for society. But what I find interesting is that over $80 billion has been invested in self-driving technology alone with a couple of hundred companies working on it – but did you arrive today at work or home in a self-driving car? Not likely. So, $80 billion goes into 1 sector and nothing comes out? Well, we’ve taken a different path with a ‘crawl, walk, run’ approach – and I believe Knightscope is literally the only company in the world operating fully autonomous 24/7/365 across an entire country – without human intervention.
4. We Have Clients – we have 10 of the Fortune 1000 as clients and hold contracts in 15 states across 4 time zones. We have repeat customers that have renewed their respective annual contracts. What we are doing is technically extremely difficult. What I tell other Founders is that it is easy to build a demo, it might be easy to build a prototype, and you might get lucky and sell one or two. But to get a major corporation to pay you full price, work with you for a year, renew the contract and add more machines – then you’ve got something special!
5. Profitability on the Horizon – we have 60+ machines under contract. We should be profitable once we reach around 300 machines-in-network, which is not too far away. What I ask my team is when we have the additional resources from this financing and can properly staff a marketing, sales, and service team – do we think we can sell at least 6 machines in each of the 50 states? Yes, that is possible and more than commercially reasonable.
6. Investment Efficient – we’ve raised over $40 million to build all of the technology we’ve built pretty much from scratch over the last 6 years. Slow and steady growth – and not burning through billions of dollars with growth at all costs. That is not how to build a proper business and minimize the execution risks – most people don’t realize that hockey stick growth curves look great on a PowerPoint presentation but are an execution nightmare, especially if you are talking about hardware + software. Most larger investors that have visited Knightscope Headquarters (KHQ) readily admit that their own portfolio companies would have easily blown through several hundred million dollars to get to where are at now. We are very careful with our investors’ money – and one of the reasons we have folks that continually and repeatedly back our efforts.
7. “Pre-IPO” – this is an opportunity to buy shares in a promising company before a possible public listing. The media and the public like to focus on the latest shiny IPO, but some of the real gains can be made prior to a public offering. For long-term investors, it can also help set a very low-cost basis for the investment while the company is in the public markets. I wonder how many folks would love to have had the opportunity to invest in Apple, Google, Facebook, Amazon, etc. before they went public?
BONUS: Ok, now it’s time to let the crazy Founder have his moment of dreaming about the future! Imagine if we are right – what if we could literally make the United States of America the safest country in the world. Suspend reality for a moment and think about the massive, positive impact on home values, infrastructure, municipal budgets, taxes, insurance rates, school safety, the volatility of financial markets and the viability of a local businesses… and most importantly, the safety of your family. We can literally change the world, and we have the honor and privilege of working on that challenge every day here at Knightscope…..for love of country.
If you’d like to learn mor
e and how to buy shares in our Reg A+ IPO click here. We can accept investors in the U.S. as well as internationally and you may invest from $1,000 minimum to a $10 million maximum completely online. Over 7,000 investors have already done so! Join us and be a force for good.