The Pitch: "Golf courses have been hit hard by the recession. They have high overhead and are largely empty during the week. We help them book more tee times. Golfers who buy the DivotCard get a free round of golf on nonpeak days at each participating course in their region as well as discounts on additional rounds. So far, we have received an enthusiastic response. Although the courses give away rounds of golf, they sell more equipment, lessons, and food. We offer the DivotCard in three cities and work with 28 courses, including two top-rated public courses. We want to quickly expand to other areas, including Naples, Florida, and Hilton Head, South Carolina."
OWNERS: Sean O'Brien, Scott Gaskins, and Peter Patton
LOCATION: Columbus, Ohio
2009 REVENUE: $336,000
2010 PROJECTED REVENUE: $500,000
PRICE OF A CARD: $59 to $89
WHAT GOLF COURSES GET: About 3 percent of revenue, plus $15 per card sold on-site
NUMBER OF PARTICIPATING GOLF COURSES: 28 in Columbus, Cincinnati, and Louisville
CARDS SOLD: 12,000
FUNDING SOUGHT: $1 million
Explore Other Markets
The DivotCard is addressing a need in this market and seems to have a very profitable business model. It is already generating revenue and growing. But the golf industry is small and shrinking, which won't excite venture capitalists. Still, golfers tend to be very passionate about their sport, so I think the company could find a few people who are willing to invest. The next step should be national expansion. Eventually, the owners might consider applying their business model to other segments, such as restaurants that have lots of open tables on weeknights.
A Promising Acquisition
Timing is everything. In a recession, the DivotCard is a win-win for golfers and the golf courses. I see this more as an opportunity to develop a product for acquisition than a chance to build a large company, but this could be well suited to an angel investor with a keen interest in golf. The key to the company's success will be rolling out the DivotCard to as many courses as possible and achieving deep market penetration in each region. The owners should focus on expanding efficiently and building strong name recognition. Then find a prospective buyer to take advantage of their being first to market.
New Vantage Group
Need More Proof
Today, there may be a market for this company. But as the economy turns, and people start golfing more regularly, will golf courses have the same need to attract people to their facilities? The good news is that the DivotCard appears to be growing steadily and has a group of golf courses that can vouch for the positive impact it has had on their businesses. I would want to see more proof that this company actually helps courses cover their fixed costs and increase their margins. Also, there doesn't seem to be a high barrier to entry, so I would like to know how the company plans to protect its idea.
Queen City Angels, Cincinnati