This new recommendation is one of the fastest-growing startups I’ve seen. The minimum investment is only $1,000, so I strongly encourage readers to take a look at this opportunity.
Magnises is a “black card” for young up-and-comers. The company transfers the magnetic strip from an existing credit or debit card onto a new Magnises one. The card is metallic and has a distinguished look.
Like an American Express black card, there are perks. Reservations at exclusive restaurants, VIP access to nightclubs. Cocktail parties and networking events.
Magnises is also a club of sorts. There’s a deluxe townhouse where members can hang out, even hold meetings. Here’s a slide from the listing on Wefunder.com.
Magnises charges $250 per year for its black card. This business model is known as “recurring revenue.” Over the life of the relationship, each member could be worth thousands.
Businesses that make this model work can be extremely profitable.
Magnises also makes money from benefits offered to members. This is commonly referred to as “affiliate” marketing. For example, a restaurant may offer Magnises members 10% off. Magnises tells members about the deal and drives more traffic to the business.
The restaurant would then pay Magnises a “finders fee” for bringing in diners. This stream of cash grows as more partners are added.
The business model is summed up in this slide from Magnises’ pitch deck on Wefunder.com.
Growth
Magnises’ membership is growing fast. Take a look at these charts.
The most recent data is even better. Here’s the latest update, from June 18.
“We accepted 300 members and had $75,000 in revenue in the past seven days. We’re also receiving over 70 applications every day.”
Very impressive numbers for such a new company.
Magnises’ growth was confirmed by our research. One of the things we look for in a startup is a rapid increase in interest for its product. A good way to gauge this is by seeing how many people search for it on Google. We use Google Trends for this task.
As you can see from the chart below, interest in this new black card is growing nicely.
Google Trends is just one of the tools we use in our research. Rising interest in a company’s product is always a good thing.
I asked several of my younger friends in NYC about this new black card. Two of them have heard about it and are considering joining. Another good sign.
The Velvet Rope
One of the most interesting aspects of Magnises’ business is that they screen applicants. Only 30% get in. This “velvet rope” approach is smart marketing. Like a nightclub with a long line out front. It must be a happening place!
The exclusive aspects of the card should help fuel Magnises’ growth. And the card itself is a conversation starter. It’s not often you see a black metallic credit card. The conversations that result will drive more members to sign up.
The Team
Magnises’ founder, Billy McFarland, is only 22. But he’s already built a number of successful businesses, his first at just 13 years old (he sold it two years later).
Billy just hired the co-founder of Marquis Jet, Matt Morchower, as COO. That’s a great hire. Matt helped build Marquis into a major lifestyle brand with $800 million a year in revenue. Marquis was later acquired by Warren Buffett’s Berkshire Hathaway.
Magnises’ investors are just as impressive as its leaders. Well-known Venture Capital firms Great Oaks VC and Deep Fork Capital are betting on the young company. As is Kevin Liles, former CEO of major music label Def Jam Recording, and Lance Weaver, former Chairman of Mastercard. All extremely well-connected folks who will help Magnises build its business.
How to Invest
First you’ll need to join Wefunder.com if you haven’t yet. You’ll need to verify that you’re an accredited investor, and answer a few questions.
Then go to Magnises’ page on Wefunder, and click the big green “Invest” button in the upper-right hand corner.
Deal Summary:
Type: Convertible Debt
Interest rate: 6% until converted into shares
Minimum investment: $1,000
Amount being raised: $750,000+
Amount raised so far: $278,000
Valuation cap: $7 million
Discount (on next round of financing): 20%
Good investing,
Adam Sharp
Founder, Early Investing
Startup Investor Portfolio
