Capsa is a relationship-based model that is acquiring consumers through Professional Employer Organizations (PEO) and will capture its revenue share via these partnerships. PEOs will credit wages of those employees without traditional bank accounts to Capsa debit cards which will reside on a National card platform. As these payments represent payroll, Capsa anticipates very low customer churn among these PEO-supplied customers. Additionally, consumers who use Capsa for payroll services, will have access to their money 2-3 days sooner than their current pay cycle. In its first year, Capsa believes it can successfully onboard 100K users to its platform from strategic PEO partnerships it expects to gain during its pre-launch period. Capsa will continue to grow by acquiring additional PEO partnerships over time. 

PEOs. These Organizations serve large corporations as well as small businesses whose workforce is largely comprised of low to moderate hourly-wage employees. Employees who receive payroll payments through a PEO are often non-or underbanked, and thus, cannot receive their payroll via direct deposits to a bank account. Further, these consumers often encounter large fees associated with check cashing levied by predatory Alternative Financial Service (AFS) providers.    Accordingly, these customers often prefer to receive payroll on preloaded, prepaid debit cards. 

Capsa believes its competitive advantage will be primarily through its strategic PEO partnership customer “push” acquisition model. Capsa believes this strategy to be unique and expects its “first mover” strategy will create a significant competitive moat. While the fintech marketplace continues to attract new entrants, the addressable number of consumers who remain underbanked remains large.

Capsa’s founding team includes prominent businessmen who have a history of building large organizations as well as helping forming and advising startups and established companies. The team also includes experienced advisors and has identified a short list of well-qualified industry experts who have expressed a willingness to join Capsa upon launch, thus increasing its chance of success. 

Capsa has identified and begun discussions with candidates for key roles whom it anticipates onboarding upon the completion of initial funding. 

Capsa’s compensation model for “front office” senior personnel will be tied to achieved revenue with clear, predetermined KPIs based upon defined contribution margins. Capsa will employ a “salary and bonus” structure for revenue-producing employees augmented by stock award programs for key hires. 

Capsa’s headquarters will be domiciled in Detroit, MI.  Customers will face Capsa via online and smartphone API platforms and as such, Capsa does not anticipate establishing additional offices beyond its headquarter’s location. 

Capsa will provide assistance to the non and under-banked in multiple ways. Primarily, it will help our consumers save money by providing a low cost debit card for payroll distribution which resides on an ACH bank master account, thereby avoiding fees generally incurred when using predatory AFS providers (payday lenders, check cashing services, etc). Additionally, Capsa will offer online financial literacy seminars to assist consumers in developing effective spending and saving behaviors. Further, Capsa’s app and online site will be bilingual with Spanish as the secondary language. Capsa seeks to address non and underbanked members of the LatinX community, who are challenged by the lack of available platforms specifically targeting the needs of these consumers.

Capsa has secured a beta-partnership agreement with one of the country’s largest, as well as, minority-owned PEOs, who will use Capsa’s services for payroll provisioning for its non-banked customers. The PEO has agreed to onboard its customers at such time that Capsa’s platform is ready to accommodate them. Regarding 3rd party “back office” service providers, Capsa’s founding team has performed substantial due diligence vetting potential partners, including ACH banks, compliance management providers, and web, API and app developers. Capsa’s list of 3rd party providers include third party vendors such as Galileo, Dualboot, Paladin, Lexis Nexis and Perfect Plastic.

Capsa is currently engaged in an initial “seed” capital round targeting $5 million which will be sufficient to launch and address cash burn until Capsa is operational and has on boarded the initial beta-partner PEO and anticipated PEOS Capsa expects to onboard within the FTM operations. We are targeting a closing date of June 1 to complete the initial raise.

Capsa believes it can be a valuable long-term partner for helping under and unbanked consumers improve their financial health. Capsa’s mission  is to help enable consumers save money on recurrent  financial management services and thereby enhance their ability to gain financial stability.

As with any “startup” investing in Capsa should be viewed as high risk and is open only to Qualified Investors. If successful, Capsa’s founders will be open to all opportunities to monetize the investments of its investors. This could include the sale of the company to an acquirer, a merger with another entity or helping accommodate the sale of privately placed equity capital to new or other existing Capsa shareholders. While Capsa’s highest priority is building the business, its founder’s goals are to do so with an eye toward long term value creation.  

Capsa’s believes its consumer acquisition model in collaboration with PEOs will generate substantial operational cash flow, reduce early stage cash burn and minimize customer churn vs. other underbanked debit card providers who rely principally on public customer acquisition. 

Following its initial “seed/Founders” round, Capsa anticipates raising additional capital to address anticipated working capital requirements including promotional efforts, staffing and general business development expenditures. Given the inability to forecast the level of success Capsa will achieve, the amount of capital required to be raised in subsequent periods is indeterminable. 

Capsa’s initial post-money valuation upon which the offering is based  is $50MM. While Capsa believes this valuation is consistent with the implied valuations of other FinTech businesses with revenue and earnings projections not dissimilar to Capsa’s early stage estimates, Capsa’s valuation will be justified only if it’s projections are met and valuation metrics remain consistent. No representation has or will be made by Capsa management or its advisors as to the reasonableness of the valuation implied by the seed raise asking price. Investors should perform their own due diligence and rely upon their own judgment when determining whether to participate in Capsa’s current or future financings.  

As Capsa will rely upon partner PEOs to supply a large number of “captive” customers, a failure to secure a significant number of PEO-contributed Capsa card users eliminates an anticipated source of stable and ongoing revenues. As Capsa cannot adequately predict its ability to acquire significant customers from the general public, nor determine the customer acquisition costs of public customers, a failure to secure large numbers of PEO-supplied clients may have adverse consequences to Capsa and reduce or eliminate its chance for success.