Specific Risk Factors. M ARKET AND CUSTOMER RISK FACTORS There is a limited market for the Company’s product or services Although we have identified what we believe to be a need in the market for our products and services, there can be no assurance that demand or a market will develop, amongst both users ("Users") and the licensees (bars, restaurants and nightclubs, collectively, the "Partners") or that we will be able to create a viable business with those Partners. Our future financial performance will depend, at least in part, upon the introduction and market and Partner acceptance of our products and services. Potential customers may be unwilling to accept, utilize or recommend any of our proposed products or services. If we are unable to commercialize and market such products or services when planned, we may not achieve any market acceptance or generate revenue. We must correctly predict, identify, and interpret changes in consumer preferences and demand, offer new products to meet those changes, and respond to competitive innovation. Our success depends on our ability to predict, identify, and interpret the tastes and habits of Users and Partners and to offer services that appeal to consumer and our Partners' preferences. If we do not offer products that appeal to consumers and the Partners', our sales and market share will decrease. If we do not accurately predict which shifts in consumer preferences will be long-term, or if we fail to introduce new and improved products to satisfy those preferences, our sales could decline. If we fail to expand our product offerings successfully across product categories, or if we do not rapidly develop products and services in faster growing and more profitable categories, demand for our products or services could decrease, which could materially and adversely affect our product sales, financial condition, and results of operations. If we fail to earn revenue or revenues drop significantly, the Company may not have adequate revenue to repay investors in accordance with the terms of this offering. Failure to obtain new clients or renew client contracts on favorable terms could adversely affect results of operations. The Venue model depends on both (1) Users downloading and using the application; and (2) Partners agreeing to accept reservations from the application and agreeing to split revenue with Venue in exchange for reservations pursuant to a contract (the "Partner Contracts"). At present, there are no Partner Contracts that have been executed. Moreover, the application has not been completed and there are no Users. We may face pricing pressure in obtaining and retaining our Users and Partners. On some occasions, this pricing pressure may result in lower revenue from a Users and Partners than we had anticipated based on our previous agreement with those parties. This reduction in revenue could result in an adverse effect on our business and results of operations. Further, failure to renew Partner contracts on favorable terms could have an adverse effect on our business. If we are not successful in achieving a high rate of contract renewals on favorable terms, our business and results of operations could be adversely affected. Our business and results of operations may be adversely affected if we are unable to maintain our customer experience or provide high quality customer service. The success of our business largely depends on our ability to provide superior customer experience and high quality customer service, which in turn depends on a variety of factors, such as our ability to maintain our contracts with our Partners, to continue to provide a reliable and user-friendly application interface for our customers to make reservations with Partners, reliable use of the reservation features on the application, and superior after sales services. If our customers are not satisfied, our reputation and customer loyalty could be negatively affected. Our business involves alcohol and therefore may be subject to legal and regulatory oversight. Venue's primary service is connecting Users with Partners where alcohol will be served to Users and others. As a result of this business model, venue may be subject to each state's alcohol laws and regulations. Therefore, Venue will need to ensure compliance with each state's alcohol laws and regulations prior to expansion of the service into that state. Venue has initiated a dialogue with New Jersey's Alcoholic Beverage Commission, which continues, but as of December 2016, has not received formal approval to begin operations. There are other products in this space in New Jersey and New York that are operating without, to our knowledge, any enforcement actions being initiated against them. Therefore, we remain optimistic that venue will receive some form of conditional or full approval from New Jersey soon. Our business involves alcohol and therefore creates possible liability concerns. Venue's primary service involves connecting Users with Partners locations where alcohol will be served to Users. As with any business involving the provision of alcohol, there is a risk of potential liability for Venue, due to its relationship to the Users and Partners. Although this risk exists, we believe it is mitigated by the fact that Venue is not distributing alcohol to any individuals, and all Partners have a non-delegable duty to check for identification for Users and not to serve intoxicated Users. Venue will also reinforce these obligations in agreements with Partners, and seek indemnification from them as to suits or actions initiated by Users. Payment Chargeback vs Credit Given Tickets to Venue are only given upon payment through our portal. Since we're dealing with a service outside of our control, there's always the possibility of a User being unsatisfied with their experience with a Partner. We will thoroughly vet our Partners, to make sure the User is accessing the best Partners. In the same manner as Seamless or Xxxxxxxx.xxx, if a restaurant is late, wrong food is given, or unsatisfactory, they issue a credit then work it out with the restaurant. At the first phase, Venue will ask unsatisfied Users to contact the Partner for refund. On a case-by-case basis, Venue will refund Users directly and seek a refund directly from the Partners. The risk for Venue is chargebacks that are allowed. Some processors and gateways will allow a maximum 5% chargeback rate and will cancel contracts with those that exceed this limit. We're working with a payments consultant to minimize this issue. The amount of capital the Company is attempting to raise in the Offering is not enough to sustain the Company's current business plan. In order to achieve the Venue's near and long-term goals, Venue will need to procure funds in addition to the amount raised in this offering. There is no guarantee the Company will be able to raise such funds on acceptable terms or at all. If we are not able to raise sufficient capital in the future and the revenue streams from Users and Partners is insufficient, we may not be able to execute our business plan, our continued operations will be in jeopardy and we may be forced to cease operations. Our company may need additional funding in the future, which may not be available. The Company’s operations may require additional capital sooner than currently anticipated. If the Company is unable to obtain additional capital if needed, in the amount and at the time needed, this may restrict planned or future development; limit our company’s ability to take advantage of future opportunities; negatively affect its ability to implement its business strategies and meet its goals; and possibly limit its ability to continue operations. The company’s working capital requirements may significantly vary from those currently anticipated. Our company may be required to take on debt which could result in limitations on our business. Venue does not currently have plans to take on debt. However, if the Company incurs indebtedness, a portion of its cash flow will have to be dedicated to the payment of principal and interest on such indebtedness. Typical loan agreements also might contain restrictive covenants, which may impair the Company’s operating flexibility. Such loan agreements would also provide for default under certain circumstances, such as failure to meet certain financial covenants. A default under a loan agreement could result in the loan becoming immediately due and payable and, if unpaid, a judgment in favor of such lender which would be senior to the rights of shareholders of the Company. A judgment creditor would have the right to foreclose on any of the Company's assets resulting in a material adverse effect on the Company's business, operating results or financial condition. The Company has prepared only unaudited financial statements in connection with this offering, which may not be reliable. In addition to the unaudited financial statement presented, we expect to prepare financial statements on a periodic basis. The financial data presented has not been audited or reviewed. In preparing the financial statements, we have made certain assumptions concerning our business and the market which may not be accurate. Investors are encouraged to review any statements with an independent accountant and should not invest if they believe that they have insufficient information. The Company’s future revenue goals are unpredictable and may fluctuate. Venue has not yet launched its product. Consequently, its business model is completely untested and any projections of revenue are purely forecasts. The accuracy or inaccuracy of these forecasts will affect available cash and working capital, ultimately affecting the Company's financial condition. This could put the investor at risk of losing their investment. O PERATIONAL RISK FACTORS We have a limited operating history upon which you can e valuate our performance. Venue has not yet been used by any User or Partner. Consequently, we have no history upon which an evaluation of our prospects and future performance can be made. Our proposed operations are subject to all business risks associated with new enterprises. The likelihood of our creation of a viable business must be considered in light of the problems, expenses, difficulties, complications, and delays frequently encountered in connection with the inception of a business, operation in a competitive industry, and the continued development of advertising, promotions, and a corresponding client base. If the Company fails to achieve certain operational goals it may incur significant losses and there can be no assurance that the Company will become a profitable business. As noted above, Venue has not yet operated in any capacity and its application is still under development. Therefore, the Company’s ability to become profitable depends upon successfully executing on operational goals, such as gaining Users and Partners, successful marketing efforts and generating cash flow from operations. There can be no assurance that this will occur. Unanticipated operational problems and executional expenses may impact whether Venue is successful or profitable. If the Company sustains losses over an extended period of time, it may be unable to continue in business and may need to make significant modifications to its stated strategies. Although the management team may have had some success in the past in other businesses, they may be unable to meet future business objectives due to unanticipated operations challenges. Certain future relationships have not been established and existing relationships are not guaranteed to endure. The Company has established and will establish certain relationships with others. We will need to maintain such relationships and, in some cases, establish new ones or replace existing ones. There will be several agreements and documents that remain to be negotiated, executed, and implemented with respect to certain aspects of our planned operations. In some cases, the parties with whom we would need to establish a relationship may not yet be identified. If we are unable to enter into these agreements or relationships on satisfactory terms, our operations could be delayed or curtailed, expenses could be increased, and profitability and the likelihood of returns to investors could be adversely affected. Venue's business model depends on Partners entering into Partner Agreements that permit Users to access a Partner's establishment through the venue app. The negotiation and execution of these agreements is essential to the product's viability. There is no guarantee that Partners will agree to such agreements. We may experience defects and system failures which would harm our business and reputation and expose us to potential liability. Venue does not yet have an operational application. Therefore, Venue may encounter delays when developing its product and its services. Alternatively, any new products and services may in the future contain undetected errors or defects when first introduced. Defects, errors or delays in development of our products or services could result in an interruption of business operations; a delay in market acceptance; additional development and remediation costs; diversion of technical and other resources; a loss of customers; negative publicity; or exposure to liability claims. Any one or more of the foregoing occurrences could have a material adverse effect on our business, financial condition and results of operations, or could cause our business to fail. Previous Product Development In 2013-2014 we were in product development for over 13 months. We built both an iOS & Android app and Venue Portal (database). Due to exponential rising development cause and lack of faith in the development team, Instaparty terminated the project. Preliminary Tech/UX audit from a 3rd party shed concerning light on the products' functionality and ability to scale. The company has learned a lot through that experience, and this knowledge about lean product development to an Minimum Viable Product (MVP) is woven through our current product development. The Company may not be able to create and maintain a competitive advantage. Venue may have competitors in the future. The demand for our products or services may change and we may have difficulty maintaining a competitive advantage within our market. Venue's success could depend on the ability of management to respond to changing situations, standards and customer needs on a timely and cost-effective basis. In addition, any failure by the management to anticipate or respond adequately to changes in customer preferences and demand could have a material adverse effect on our financial condition, operating results and cash flow. New competitors may enter our market in a manner that could make it difficult to differentiate our Company. While the Company is aware of certain competitors in the market, there is the possibility that new competitors may enter and that they may be better funded. To the extent that the market becomes more crowded, this may make it more difficult for us to differentiate our value proposition or to get in front of right partners and customers. It may be difficult to compete with new entrants if there is pricing pressure or changes in market demand. The Company may also have a hard time competing against companies who can negotiate for better prices from suppliers, produce goods and services on a large scale more economically, or take advantage of bigger marketing budgets. P ERSONNEL AND THIRD PARTY RISK FACTORS The Company relies on third-parties over which the Company has little control; third party failures could negatively affect the Company's business. The Venue product relies heavily on partnering with Partners that will allow reservations to be made at their facilities through the Venue application. While the Company intends to implement standards in selecting third party relationships and vendors, if a licensee chooses not to sign up as a Partner, or, after signing up, fails to meet its obligations or provide the products or services required by the Company, Venue's operations and reputation may suffer.
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Samples: Revenue Share Agreement
