Action sports brands woo investors at Capital Forum

Loop'd Networks Tom Nelms and Scott Tilton fielding
questions from Pascal Pakter, managing director
of WinGlobal, an apparel company and exporter.

Loop'd is positioned as a "Facebook of action sports," he said, with a core audience of boys 13-24 - "the most valuable demographic to most any advertiser in the U.S." It has 500,000 members.

Loop'd has four channels:
• It creates online communities for brands, which pay $20,000 to $600,000 a year. Users upload stories and photos and videos and read about brand team riders. The Monster energy drink "army' has 150,000 members, Nelms said.
• It builds ‘brand profile' marketing pages, and charges up to $3,600 a year for the service. So far, 400 brands are up.
• It runs advertising, sold through the third-party network Sportgenic, which guarantees Loop'd a $2 CPM.
• Its fastest-growing and highest potential leg is e-commerce. "The economy has really helped us here," Nelms said. "Where before, brands would worry about selling direct, now they don't care, they need to move product. We have 25 new stores, and 20 in the pipeline."

A little more about that e-commerce channel. The setup allows users to buy items directly out of each other's ‘gearbags,' rather than having to click through pages of product shots like you now find at ecommerce sites. So one friend can click on the other's sunglasses and jeans, and those items go to his shopping cart, which is powered by third-party provider Shopatron.

This "social merchandising" will yield $4 million in transactions this year - and Loop'd will take about a 10 percent commission. The average transaction is $130, "and the brands love that," Nelms said.

Loop'd is building its audience with media partnerships - a recent deal with Transworld Media's enthusiast titles gave it a lift of new members, and deals are pending with two large media companies.

It earned $1.9 million in 2008 and expects revenues of $2.7 million in 2009. It is looking for $60,000 now to complete a round of financing, and $3 million in a next round to finance mobile applications and international expansion.

A good sign: the toughest question was from an investor who wanted to know why Loop'd doesn't charge more.

Rhythm North America

PT and his son Jye, who is Rhythm's U.S. brand manager, pitched the brand on its roots.

Rhythm's product on display. The hot-yellow trunks drew
a lot of interest for their two-seam construction
and four-way stretch.