Level Brands, Inc. (LEVB) utilizes a licensing and brand management business model designed to generate revenue through both upfront fees and long-term royalties. Their 2018 investor presentation showcases a portfolio of four distinct brands: kathy ireland Health & Wellness, Beauty & Pin-Ups, Ireland Men One (I’M1), and Encore Endeavor One (EE1). The company emphasizes a 'no cost, no inventory' recurring revenue model, leveraging strategic partnerships with entities like SG Blocks and artist Romero Britto. Financially, the deck reports significant momentum, with 1Q18 net sales increasing by 2…
Key takeaways
- The business model relies on a two-phase revenue structure: initial cash/equity fees and potential recurring royalties (Slide 7).
- Level Brands operates across four primary subsidiaries, including the millennial-focused lifestyle brand I’M1 (Slide 4).
- The company maintains a 'no cost, no inventory' approach for its recurring revenue streams (Slide 7).
- Strategic partnerships include a 9-year agreement with artist Romero Britto featuring 35% royalties (Slide 13).
- Financial growth is aggressive, with 1Q18 net sales up 244% and gross profit up 1,139% compared to the previous year (Slide 19).
- The company reported $0 in long-term debt as of December 31, 2017 (Slide 19).
- A complex 'Directional Decision-Making Matrix' governs the referral and licensing rights between Level Brands and kWW (Slide 25).
- Social responsibility is formalized through the adoption of ten specific development goals, including two added by Kathy Ireland (Slide 22).
Level Brands Investor Presentation: The 2018 Strategy
The Level Brands (LEVB) investor presentation from March 2018 outlines a corporate structure built on the pillars of licensing, marketing, and brand management. Rather than operating as a traditional consumer goods company that manages manufacturing and logistics, Level Brands positions itself as a lean, intellectual-property-focused entity. The deck emphasizes the scalability of this model, highlighting rapid financial growth and a diverse portfolio of lifestyle brands.
Slide 1: Title Slide
The presentation opens with a clean, corporate aesthetic featuring the Level Brands logo. It is dated March 2018. The simplicity of the title slide sets a professional tone, focusing on the brand identity rather than distracting imagery.
Slide 4: Level Brands Overview
This slide introduces the company's mission: to be an innovative licensing, marketing, and brand-management company. It displays the logos of four core brands: kathy ireland Health & Wellness , Beauty & Pin-Ups , Ireland Men One (I’M1) , and Encore Endeavor One (EE1) . The slide explicitly mentions a commitment to a "bold, unconventional image and social consciousness."
Slide 7: Licensing and Brand Management Business Model
Slide 7 is critical for understanding how the company generates value. It breaks the revenue model into two distinct phases: Initial Revenue and Potential Recurring Revenue . Initial revenue is derived from marketing fees, equity issuance, and upfront licensing fees. The recurring portion comes from royalties on every unit sold. A key selling point noted here is the "No cost, no inventory" nature of the recurring revenue, which suggests a high-margin, asset-light operation.
Slide 10: Ireland Men One (I’M1)
This slide focuses on the I’M1 brand, described as a lifestyle brand for "millennial men and the women who love them." Founded in 2017, the brand is led by co-founder Tommy Meharey. The stated goal is to lead in categories such as grooming, personal care, apparel, and jewelry. The slide uses Meharey's background as a Marine and millennial to establish brand authenticity.
Slide 13: Encore Endeavor One (EE1) - Romero Britto
Slide 13 details a specific brand management service under the EE1 umbrella. It highlights a 9-year agreement with world-renowned neo-pop artist Romero Britto . The terms disclosed include a 35% royalty rate for domestic product licensing and entertainment ventures. This slide serves as a case study for the type of high-value creative partnerships the company pursues.
Slide 14: Encore Endeavor One (EE1) - SG Blocks
Continuing the focus on EE1, Slide 14 showcases a partnership with SG Blocks (NASDAQ: SGBX) , a fabricator of container-based structures. The slide illustrates applications in medical centers, luxury housing, and retail (specifically showing a Starbucks Coffee structure). The agreement is listed as a 1-year renewable contract with a 3.5% royalty .
Slide 19: Financial Snapshot
This slide provides the quantitative proof of the company's trajectory. It features two bar charts. The first shows 1Q18 net sales and gross profit, noting that Net Sales are up 244% YoY and Gross Profit is up 1,139% YoY . The second chart tracks sales from 2015 to 2017, showing a steep upward curve. Crucially, the slide notes $0 in long-term debt as of December 31, 2017, indicating a strong balance sheet during this growth phase.
Slide 22: Socially Responsible to the Core
Level Brands formalizes its ESG (Environmental, Social, and Governance) commitments by requiring partners to support ten specific goals. These include standard UN Millennium Development Goals like eradicating poverty and promoting gender equality. The list includes two additions personally added by Kathy Ireland: supporting American veterans and stopping human trafficking. This slide aims to align the company with socially conscious investors.
Slide 25: Addendum | Directional Decision-Making Matrix
The final slide in this selection is a complex matrix detailing the relationship between Level Brands and kWW (Kathy Ireland Worldwide) . It outlines how opportunities are sourced and referred. For instance, Level Brands has a Right of First Refusal (ROFR) for up to 50% of investments sourced by kWW. Conversely, Level Brands pays referral fees (often 50% of compensation) for certain licenses or advisory roles sourced for kWW. This slide is essential for due diligence, as it explains the inter-company flow of deals and capital.
What Level Brands Does Well
The deck excels at explaining a complex corporate structure through clear categorization. By separating the business into four distinct brand pillars, the company demonstrates a diversified approach to the lifestyle market. The financial slide (Slide 19) is particularly effective, using massive percentage growth figures to create a sense of urgency and momentum. Furthermore, the disclosure of specific royalty percentages (35% for Britto, 3.5% for SG Blocks) provides a level of transparency that is often missing from early-stage or mid-stage growth decks.
What Is Missing from the Deck
While the deck provides a strong overview of the brands and the financial growth, several key elements are omitted in this nine-slide selection. There is no dedicated Team Slide detailing the executive leadership beyond Tommy Meharey. There is also no Market Size (TAM/SAM/SOM) analysis to justify the scale of the opportunity in the millennial or wellness sectors. Most importantly, there is no Specific Ask slide in this set, leaving the reader unclear on how much capital is being raised or the intended use of funds. Additionally, while unit economics are hinted at through royalty percentages, a deeper dive into the cost of acquisition for new brand partners would be beneficial.
Founder Takeaways
Asset-Light Messaging: If your company avoids manufacturing or inventory, emphasize the "no cost, no inventory" aspect as Level Brands does on Slide 7. This is highly attractive to investors looking for scalable margins. · Transparency in Partnerships: Disclosing specific contract terms, such as the 9-year duration and 35% royalty on Slide 13, builds significant credibility and shows the strength of your business development pipeline. · Visualizing Growth: Use year-over-year percentage increases for both top-line (sales) and bottom-line (profit) metrics to highlight operational efficiency. The 1,139% gross profit increase on Slide 19 is a powerful hook. · Governance Clarity: If your startup has a complex relationship with a parent company or a founder's other ventures, a decision-making matrix like the one on Slide 25 is a professional way to address potential conflicts of interest and referral structures.
Frequently asked questions
- What is the core revenue model for Level Brands?
- As detailed on Slide 7, the model is split into two phases. Phase one involves initial revenue from marketing fees, equity issuance, upfront licensing fees, and advisory fees. Phase two focuses on potential recurring revenue through royalties on every unit sold, which the company notes involves no inventory costs for Level Brands itself.
- Who are the primary brands in the Level Brands portfolio?
- Slide 4 identifies four main brands: kathy ireland Health & Wellness, Beauty & Pin-Ups, Ireland Men One (I’M1), and Encore Endeavor One (EE1). Each brand targets different segments, such as millennial men for I’M1 or experiential entertainment and brand management for EE1.
- What specific partnerships are highlighted in the deck?
- The deck highlights a partnership with Romero Britto for domestic product licensing and entertainment ventures (Slide 13) and a renewable 1-year agreement with SG Blocks (NASDAQ: SGBX) for container-based structures in retail and medical sectors, yielding a 3.5% royalty (Slide 14).
- How does Level Brands handle social responsibility?
- Slide 22 outlines a mandate where every partner and licensee must support ten goals. These include the eight original UN Millennium Development Goals plus two additions by Kathy Ireland: bringing opportunities to American veterans and stopping human trafficking.
- What is the relationship between Level Brands and kWW?
- Slide 25 presents a matrix showing that kWW (Kathy Ireland Worldwide) is obligated to refer certain opportunities to Level Brands. It also details Right of First Refusal (ROFR) terms, where Level Brands often has the right to up to 50% of certain investment or entity purchases sourced by kWW.
