BOULDER — Demetri ‘Coup’ Coupounas’ reincarnation of his former outdoor-gear company GoLite is nearly complete. And it’s raising more cash to ramp up.
The Boulder entrepreneur’s new company, My Trail Co., is aiming to go live with website sales of a limited product line next week. The company also on Tuesday evening became one of the first to take advantage of new nationwide securities crowdfunding rules that went into effect on Monday.
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My Trail Co., which launched a direct public offering to Colorado investors last summer, launched a crowdfunding campaign on investment crowdfunding site Wefunder.com seeking to raise between $50,000 and $1 million between now and June 18. As of early Wednesday afternoon, the campaign had already pulled in $20,625, with a minimum investment of $1,000 required.
The new securities crowdfunding rules — passed as part of the JOBS Act in 2012 — allow companies to raise up to $1 million from both accredited and non-accredited investors alike through crowdfunding, opening a new door to capital for startups.
“It’d be even better if it was last year, but it’s great that it’s now,” Coupounas said of the new rules in a phone interview Wednesday. “So we’ll take it.”
MyTrail’s online launch comes less than 18 months after Coupounas shut down GoLite and went through a bankruptcy liquidation sale. That sale secured enough cash to pay off the company’s lone secured creditor but not enough to pay off the nearly $6 million owed to unsecured creditors, including a long list of suppliers and landlords.
In conjunction with the bankruptcy proceedings last year, Coupounas paid $5,000 for GoLite’s intellectual property and product designs. New versions of those same products, with a few minor improvements, Coupounas said, are what My Trail will be launching with later this month. Coupounas had to go with a new brand because he sold the GoLite brand to the parent company of apparel retailer Timberland in 2006 and leased it back. That licensing deal was terminated after Coupounas filed for bankruptcy.
Coupounas, who owns My Trail with his wife, Kim, said he’s pumped $168,000 in personal cash and assets into the new venture. But he’s also tapped into a passionate customer base that had helped GoLite become noted for technical gear such as jackets, backpacks, tents and sleeping bags, and grow to more than $17 million in annual revenue before the company became over-extended financially with an overly broad product mix and leases on stores that were too large to be sustainable.
Last summer’s direct public offering, which is ongoing until next month, offers investors shares of non-voting, non-convertible preferred stock for $5 each. The shares earn 10 percent annual dividends. After five years, investors can require My Trail to buy back their shares at the original price, plus any accrued but unpaid dividends. My Trail after 10 years has the right to buy back all shares under the same terms. Investors also will receive 20 percent off their purchases of all My Trail gear.
The shares being offered under the new Wefunder.com campaign have the exact same terms.
The direct public offering has raised more than $416,000 so far. Coupounas said 99 percent of My Trail’s investors are former GoLite customers.
“I find it gratifying that our customers agreed that we have great products, and we really want them back,” Coupounas said.
My Trail won’t be able to access the Wefunder.com campaign funds until the round closes next month. But the company has been able to access the direct offering funds since November after eclipsing a minimum $200,000 threshold, which Coupounas lowered from the original $500,000 minimum goal after he got better terms from suppliers and lenders to get production underway.
He said My Trail has deployed about $300,000 in the DPO funds into product so far, with another $300,000 in product, which is being made mostly in Vietnam and China, in process.
My Trail earlier this month moved into a 940-square-foot space at 6595 Odell Place in Gunbarrel that is serving as the company’s headquarters and distribution center. Customers will also be able to buy products at the site.
The company is launching initially with two backpack models, a pair of tents and some other camping accessories. He said the plan is to start selling down jackets by July. My Trail aims to open four small retail stores on the Front Range next year, but Coupounas has said the new company will focus only on the best of what worked with GoLite as it considers product mix and store locations.
With sales about to start, Coupounas said the amount raised by the new crowdfunding campaign will affect only how fast My Trail adds new products.
“We’ll be able to make more of our best products earlier the more investment we bring in,” Coupounas said.
My Trail so far has four employees, including Coupounas and former GoLite retail director Kale Klontz, who is chief operating officer of the new firm.
My Trail, according to a filing made with the U.S. Securities and Exchange Commission made this week, had $335,856 in assets at the end of its fiscal year and posted a net loss of $111,841 in 2015 as the company got off the ground.
“I expected to get to this point,” Coupounas said. “I expect to get a whole lot further. We’ve got a lot of great products and a lot of great customers. It was just a matter of figuring out how to get those two things back together. And we did.”
While My Trail is chugging forward, Coupounas is still facing at least one lingering side effect of GoLite’s bankruptcy. American Express, one of GoLite’s unsecured creditors, earlier this year sued Coupounas, arguing that he should be personally responsible for more than $100,000 in credit-card debt.
Coupounas said Wednesday that lawyers for himself and American Express are still working through that suit.
“It’s business debt,” Coupounas said. “That’s our position, and they shouldn’t have any more rights than anybody else.”