People First RH is an early-stage startup that develops software to help resolve conflicts in the workplace. The company is also in the process of raising capital via the equity crowdfunding platform, Republic. The minimum to invest in People First RH is only $100.
The inspiration for the startup came from Shantanu Rana. When he created his previous startup, Louder Communications, he wanted to build a culture that was safe, fair and transparent. So, he searched for a software solution to help out with this.
But for the most part, there was nothing that was useful. Rather, there were mostly the typical HR videos.
Rana launched People First RH in October 2018. He also recruited other co-founders, including:
- Kamael Ann Sugrim (chief operating officer): For the past 20 years, she has helped with operations and new products at companies like Salesforce.com (NYSE:CRM), SAP (NYSE:SAP) and Impact Hub Network.
- Keath Chan (chief technology officer): He has led major digital transformation efforts for clients like Verizon (NYSE:VZ) and is the advisor to various startups.
How It Works
With the app, an employee will fill out a report that describes an incident and what resolution is being sought. This can be fairly detailed, with the identification of witnesses and the uploading of photos and files. And yes, the app has security systems for the data.
When the report is submitted, it goes to the HR department, where the issue can be evaluated. The employee can then get updates about the progress. Now even if the matter is resolved, the app can still be used to document any other problems, such as retaliation.
Then what if there is no resolution? Well, in this case, the employee can submit his or her claim to the EEOC.
The good news for those who are thinking of investing in People First RH is that the company has been showing some momentum. It launched its product in May 2019 with 12 customers. And as for this year, the projection is for revenues of about $450,000.
The market is also large. Spending on HR technology – including governance, risk and compliance – is projected to hit $64.2 billion by 2025.
In fact, with the rapid increase in those employees working from home because of the novel coronavirus, there will likely be more online forms of discrimination and harassment.
As for the business model, the company has two paid tiers. One is for $40 per employee per year for features like up to four escalation paths and HR analytics and reporting. Then there is the enterprise edition, which is for $100 per employee per year. This version has AI-powered insights and recommendation as well as a workplace inclusion score.
Invest in People First RH?
The company has already raised $355,000 from angel investors. Regarding the crowdfunding round, the amount of the funding is over $67,000 from more than 150 investors. The valuation on the deal is $6 million.
The structure is for a SAFE (Simple Agreement for Future Equity) instrument, which means that stock is not allocated until there is a trigger event. This is usually an acquisition or IPO.
Furthermore, the investment in People First RH comes with a variety of perks that are based on the amount. For example, if you invest $10,000, then your organization will get a 20% product discount for the first year.
Now as is the situation with any early-stage opportunity, there are major risks. The fact is that most of these companies either fail or stall out. And as for People First RH, it does seem like the product could be easily replicated. The way to get a competitive advantage would likely to be to raise substantial amounts of capital for marketing and sales so as to aggressively capture market share.
Thus, before you invest in People First RH, it’s important to do your own analysis and research.
Investing through equity and real estate crowdfunding or asset tokenization requires a high degree of risk tolerance. Despite what individual companies may promise, there’s always the chance of losing a portion, or the entirety, of your investment. These risks include:
1) Greater chance of failure
2) Risk of fraudulent activity
3) Lack of liquidity
4) Economic downturns
5) Dearth of investor education
Read more: Private Investing Risks
Tom Taulli (@ttaulli) is an advisor and author of various books and online courses about technology, including Artificial Intelligence Basics, The 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. As of this writing, he did not hold a position in any of the aforementioned securities.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.