heroic investor overview

HEROIC INVESTMENT OVERVIEW / 2012

THE EASIEST WAY TO FIND A TRUSTED HANDYMAN HOUSE CLEANER GARDENER

WINNER RUNNER-UP, TECH

NOVEMBER 2012

FINDING HOME IMPROVEMENT PROVIDERS IS FRUSTRATING

•  Runs a chaotic household •  Needs a handyman, but

doesn’t know where to look

•  Handyman for eight years •  Needs more work and current

marketing isn’t working

The Homeowner The Handyman

Mary


Jeff

2

HOMEOWNERS PREFER REFERRALS FROM FRIENDS & NEIGHBORS

“A bunch of my neighbors use the same person to mow their lawns, so we just used them.”

“What makes it hard for people to book my services? Establishing trust without the bene!t of a mutual contact.”

- Mary

- Jeff

YET SERVICE PROVIDERS ARE SPENDING AD DOLLARS ELSEWHERE

HEROIC INVESTMENT OVERVIEW / 2012 3

PAST PRESENT FUTURE

“I don’t trust the phonebook; there are no referrals to cross-check against the business’ claims, which is for me is huge!”

“Online search is overwhelming and does not do a good job at showing me people who work in my neighborhood.”

“I could be a great resource for my neighbors and they don’t even know it!”

THE FUTURE IS SOCIAL RELEVANCY

- Diane, homeowner - Courtney, homeowner - Meg, Homeowner


Mary tells Heroic what she needs and when she needs it done

Mary is matched with a Hero based on ratings, location and virtual referrals

Mary books Jeff after reviewing his pro!le. Jeff meets all of Mary’s quali!cations – a perfect match!

HEROIC PROVIDES AN INSTANT VIRTUAL REFERRAL

5

Now Mary can instantly view recommendations from her friends and neighbors


6

In 20 minutes Jeff creates a polished pro!le that helps homeowners discover his services

HEROIC HELPS PROVIDERS GET MORE BUSINESS

Jeff would like more business – Jeff clicks on the “Become a Hero” link

Jeff completes a six-step application that ends with a payment option

Jeff’s pro!le is complete; he’s now ready to receive leads!

User

HERO

FREE

Mary

Jeff

Handyman, Inc.

Enterprise

$29.99/MONTH

FREE FOR USERS - HEROES PAY MONTHLY FEES

Instant virtual referrals – see who your friends and neighbors recommend My Heroes page Find Heroes Contact Heroes

Full Hero pro!le page Email and text alerts for jobs Portfolio section for photos Appear in User dashboard and feed

Full Hero pro!le page Email and text alerts for jobs Portfolio section for photos Appear in User dashboard and feed

$99.99/MONTH

7 HEROIC INVESTMENT OVERVIEW / 2012

MANY MORE INDEPENDENT WORKERS ARE ON THE WAY

“By 2020, an estimated 50% of the US workforce will be made of independent or freelance workers. A stunning 400% increase in less than a decade.” - The Wall Street Journal

8

REPRESENTING A MAJOR OPPORTUNITY


HEROIC GENERATES HEALTHY MARGINS ON EACH SUBSCRIPTION

GROSS MARGIN OF 50% FOR INDIVIDUALS

GROSS MARGIN OF 85% FOR SMALL BUSINESS


ONE-YEAR SUBSCRIPTION ECONOMICS, INDIVIDUAL

9

FINDING MARY ONE MARY, MANY LEADS

HEROIC DRIVES CUSTOMER LEADS TO HEROES

SEM and SEO

Promotions

Partnerships

Referral Program

Open Graph


JUSTIN BARRETT CO-FOUNDER & CEO

DAN LINSTROTH CO-FOUNDER & CMO

ETHAN OTTERLEI CO-FOUNDER & CTO

REED ROBINSON CO-FOUNDER & CPO

THIS IS A TEAM WITH MARKETING AND TECHNOLOGY EXPERTISE

STARTUP EXPERIENCE

THIS IS A TEAM WITH MARKETING AND TECHNOLOGY EXPERTISE

- Founder Book a Lesson and Velolet - Development expertise in Ruby, PHP, JavaScript and MySQL - University of Minnesota, B.S.

•  - Founder Holy Cow, Dirty Work •  - 9+ years expertise B2B/B2C

marketing •  - University of Minnesota,

Carlson School

•  - Founder Usuits •  - Consumer research marketing

expertise, Iconoculture •  - University of Minnesota,

Carlson School

- Freelance marketing expert - 50+ team management at Edward Jones - Purdue University, B.A.

Suits

FORTUNE 500 EXPERIENCE


HEROIC BECOMES THE FIRST ONLINE REFERRAL ENGINE

TOP COMPETITION


$7M $970k

$1.1M

$20k

$1M

95

.2 .8

.9

3 42 62

35 620

941

2230 2812

HEROIC IS ON A PATH FOR RAPID GROWTH

SEED SERIES A

SERIES B

44,271

20

970

12,618

Revenue Operating Expenses

$60M

$20M

(96)

(1,115) (223)

(7,042) 5,460

(28,912) 14,981

1

3

13

33

$44.2M

$12.6M


$40M $28.9M

(110)

14

Unit economics

USES OF CASH AND MILESTONES


50,000+ leads thru 2013

5,000 active Heroes thru 2013 $1.1M

$450k

$100k

$60k

$240k

$250k

Minneapolis/St Paul market formula

15

GIVES MARY AND JEFF WHAT THEY WANT

16

NOW, BUYING HOME SERVICES IS EASY

…and it’s a connection worth $31 billion

More work at an affordable price

Free referrals from the people she trusts


APPENDIX


HEROIC IN THE PRESS


Raising an additional $630-930k Seed convertible offering •  Investors include Gene Munster, Rob Weber, Ryan Weber, Paul

Linstroth, and John Otterlei •  Discount rate of 25% to Series A •  Targeted closing in next 3-4 weeks

Use of proceeds / Product Roadmap / Goals •  $200k-$300k: hire 2-3 FT engineers, 1 PT Designer, 1 PT Marketing/

Customer Support •  $350-$500k: marketing campaigns and lead acquisition •  Get to 5k active Heroes; 50,000+ connections thru 2013 •  Minneapolis/St Paul market formula

FINANCING HEROIC GROWTH


Product Discovery Sharing

Market Minneapolis/St Paul Adding Denver/Chicago

Revenue Per Lead Subscription

Financing Seed Series A

Metrics 3,000 Hero Applicants, 2,000 Leads 5,000 Active Heroes/50,000+ Leads

ALPHA RELEASED, BETA IS IN PROGRESS

20

Alpha Beta


ADDITIONAL REVENUE STREAMS

ADDITIONAL REVENUE OPPORTUNITY: $45B+

MOBILE AD SPACE

EMAIL AD SPACE


HEROIC MARKET GROWTH

SEED

SERIES A

SERIES B

Hero applications: 2,754 Users: 1,500+ Heroic lead requests: 1,850 Sales email signups: 5,000+ Landing page conversion: 39%

Heroes active: 5,000+ Users: 50,000+ Heroic lead requests: 75,000 Sales email signups: 50,000+ Landing page conversion: 40%


•  1.5M subscribers, 40K reviews per month •  Revenue last !scal year was $90M •  Total venture funding $135M •  Valuation at IPO $805M

A good company…

But…

“The company made $38 million so far this year. Its selling costs - the cost of a call center full of sales persons pitching merchants for new business - was $22 million in the same period. (Those costs are rising, too, but at least Angie's spends less than it makes to acquire new merchants). All that suggests Angie's might be better off if it abandoned its unpro!table membership side and made its site free, and then simply sold ads to plumbers.”

11/11, Jim Edwards on Businessinsider.com

CASE STUDY


LISTENING TO CUSTOMERS


heroic investor overview

Documents

seedheroic investment

jeffheroic investment

heroic helps providers

financing heroic growth

heroic drives customer

business je je

virtual referrals profile

marketing campaigns