Video Professor is trying to raise $10 million in convertible debt, according to an investor pitch document that was forwarded to us. The company “incurred substantial losses which depleted its cash reserves” in 2008, says the document, and is looking to use the new money to “retire its line of credit, purchase media, build strategic alliances, finalize the technical development and launch of the e-commerce platform and accelerate growth.”
The company’s product offering was one of the scams we called on in our ScamVille posts. The company lures in potential customers by offering free learning CDs. But they are then billed up to $290 for products they never intended to buy. We outlined how the scam works here, and also point to a number of other sites with thousands of consumer complaints.
According to a revenue chart, revenues for the company peaked in 2006 at around $135 million, but dropped to under $80 million in 2007 and were just $40 million in 2008. Projected 2009 revenues are nearly $100 million.
“VPI’s competitive advantage is the superior quality of its learning programs, its use of subject matter experts, and the trusted relationship that the brand has earned with consumers,” says the document. It fails to point out the hugely negative reviews and complaints in this article as well as Amazon and epinions.
The document also boasts:
STRONG BRAND EQUITY
Having maintained the longest running direct response marketing campaign in the history of television, the VIDEO PROFESSOR™ brand is highly recognized in both consumer and commercial markets with millions of satisfied customers. VPI has supplied computer learning to over 20 million unique customers, many of whom have
purchased multiple learning titles.
And to all those 20 million “customers” who’ve already been scammed one time by Video Professor: look out, they’re coming back for another dip at the well:
VALUABLE CONSUMER DATA
VPI has contact information for tens of millions of consumers who have responded to VPI’s offer to, as the commercials say, “Try My Product.” VPI has judiciously protected consumer information and has not allowed other marketers access to this valuable database. This consumer data, combined with the data mining technologies embedded in the new VideoProfessor.com, provide a valuable source of new revenue.
Our warning to potential investors – watch out. You may think you’re investing just $10 million in the company, but don’t be surprised when you’re billed for $300 million. And if you didn’t read the fine print, that’s your problem. The complete document is below: