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Risks Surround Shares of Reset IV

Reset IV, which provides a IV (intravenous hydration) therapy service, is running an equity crowdfunding campaign. So far, the company has raised over $640,000 from close to 2,000 investors. The minimum to invest in Rest IV stock is $100.88.

Gold and silver gears with the words "private equity" written on the gold gears. representing netcapital platform
Source: Pavel3d/ShutterStock.com

The founder and CEO of the company is Daniel Rubenstein. In terms of his background, he has served as the chief operating officer of Prestige Sourcing Group, a global sourcing company. During his tenure he helped to boost sales by 150% over a three year period. By the way, Daniel is also an ordained rabbi.

As for Reset IV, he started the company in 2016 and spent a year in developing the service. Rubenstein provided the initial startup capital of $70,000 and bootstrapped the operation.

The Platform

IV hydration therapy has been mostly about dealing with hangovers. But this treatment can also help with jet lag, migraines, immunity and even food poisoning. Keep in mind that – over the years – IV hydration has been quite popular with celebrities like Chrissy Teigen and Rihanna.

So how does this work? Well, in the case of Reset IV, a licensed medical professional will insert a small tube into your vein. This will send a saline, which includes various additives, into your body. In other words, you will get the full impact of the vitamins and other nutrients. Reset IV can also replace lost fluids and electrolytes.

The treatment can take about 25 to 45 minutes and costs a few hundred dollars. Currently, Reset IV is available in Las Vegas, South Florida and Los Angeles. Something else: The company can come to your location, whether it be your home, office, hotel or yacht. The service is available on a 24/7 basis.

In terms of traction, the company has been posting strong growth. From 2018 to 2019, revenue shot up by 86% to $2.3 million and the gross margins have been about 65%. More than 13,000 clients have been treated during this period.

For the next couple years, the company has ambitious plans for expansion. The goal is to have coverage in nine states by 2022 and 16 to 22 cities.

Invest in Reset IV Stock?

For the equity crowdfunding campaign, the company is issuing common stock at a price of $1.04 per share. The valuation has been set at $10 million (on a pre-money basis). Moreover, buying Reset IV stock comes along with various perks. For example, all investors will get a 5% lifetime discount on the service and early access to any new offerings.

Yet there are still some notable risks with this venture. Consider that there is skepticism in the medical industry about the benefits of IV hydration.

Next, the market size is far from clear. The company indicates that it is based on the growth of the global telemedicine category, which is expected to go from $40.11 billion in 2018 to $148.32 billion by 2025. But it seems like IV hydration would be a small part of this. After all, how many people want to get injections? Besides, the treatment seems more for those who have high incomes. There will also need to be large expenditures on marketing to give more visibility to IV hydration as well as investments in infrastructure to scale out the business.

Oh, and another red flag is that Rubenstein is still the COO of Prestige Sourcing. So does he really have the bandwidth for both? It could get difficult as Reset IV starts to expand even more.

Thus, while he has done a great job building the service – with a modest amount of capital – investors should still be cautious and take into account the various risks.

On the date of publication, Tom Taulli did not have (either directly or indirectly) any positions in any of the securities mentioned in this article.

Tom Taulli (@ttaulli) is an advisor/board member for startups and author of various books and online courses about technology, including Artificial Intelligence BasicsThe Robotic Process Automation Handbook and Learn Python Super Fast. He is also the founder of WebIPO, which was one of the first platforms for public offerings during the 1990s. 

Article printed from InvestorPlace Media, https://investorplace.com/2020/09/risks-surround-reset-iv-stock/.

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