Gift Certificates.com

Division: Phoenix Capital Resources, Phoenix Management Services


Client

Gift Certificates.com was a $65 million privately held E-commerce Company located in Seattle, WA.

Problem

A venture-backed start-up that had become the leading provider of gift certificates and related services to corporate clients and consumers had spent the vast majority of a $50 million preferred stock issuance. Compounding problems was the fact that the IPO market, upon which it had been relying for future funding, had dried up. The Board had lost confidence in the CFO and recognized that it needed to augment the skill set of the CEO and Founder.

Solution

Phoenix assumed the role of CFO, developed a credible financial forecast, and raised $13 million of convertible debt just as the Company was both running out of cash and entering its busy holiday season. Phoenix introduced financial discipline at all levels within the organization and was able to maintain vendor, customer and shareholder support during this very difficult period. Phoenix renegotiated a number of on-line advertising contracts, resulting in savings to the Company of approximately $4.0 million. Phoenix was also instrumental in negotiating the cancellation of contracts for specialized printing equipment as well as telecommunications and marketing services, the combination of which relieved the Company of approximately $2.0 million in liability.

The Company shifted the focus from the consumer market to the corporate market, which has experienced exceptional growth and has superior cash flow characteristics. Inventory purchasing practices have been streamlined and improved. Aggressive revenue targets were achieved and the cost control measures sustained. The Company secured a $7.5 million line of credit facility from a commercial bank and more than $14 million of new equity and continues to be one of the success stories in the e-commerce industry.