An MBL from a Credit Union Subscriber Gives Young Publisher of Financial Publication Sufficient Upfront Cash

CORVALLIS, Ore. – Welcome to the publishing school of hard knocks. Bryan Sims, publisher, founder and CEO of brass Media that plans to soon start putting out a quarterly, 4-color, glossy printed magazine targeted for the 18-25 age audience, has learned fast one very important lesson about the world of publishing – it requires a lot of upfront money to produce publications. Now he’s getting some help with a 90-day, $25,000 member business loan from one of his first subscribers and the credit union he belongs to – OSU FCU – to give him that needed cash flow and tie him over with money to pay for things like travel expenses and promotional mailings until January 2004 when he’ll close a funding round and begin tapping into money from investors that’s sitting in an escrow account. Sims intends to use that money to put out the first edition in Feburary 2004 of his magazine brass Young Today, Rich Tomorrow. He says he already has verbal commitment from two credit unions for that issue which amount to 50,000-100,000 subscriptions. He also received a bridge loan from investors that allows him to “borrow” some of the money in the escrow account and treat it as a loan to also be used to cover various business expenses. Instead of paying the money back to investors, the money will be converted into stock in the company. “There are a lot of `ifs’ in this business,” says the 20-year old Sims, who notes that his company recently completed a run of 10,000 promotional copies of brass Young Today, Rich Tomorrow which it sent to credit union CEOs and marketing staff. The magazine which focuses on money management issues and related topics, is written by young people for young people. He has a team of about 150 freelance writers from 20 states and five countries such as Malaysia (CU Times, Oct. 8 issue). “We have to raise enough money to print the publication, then be able to sell the magazine to subscribers for circulation so that we can attract advertisers. Everything depends on the `what ifs’ happening,” he says, noting that he’s trying to work with credit unions’ budget cycles, “so we need enough money to put out the magazine until the money start coming in,” he says. In addition to receiving a verbal subscription commitment from OSU FCU, Sim’s has also gotten one from Riverside County’s CU, Riverside Calif. He said O Bee CU in Tumwater, Wash., is “exploring its options”, and he’s also in the process of talking with about 30 other credit unions. The annual subscription price for the quarterly magazine is $5, and that cost decreases with multiple year contracts. “OSU FCU is working with us to make sure we’ll be successful on the cash flow side of the business,” says Sims. “I’m not just a member of theirs, they’re a client of mine.” He’s been a member of the $350 million credit union since fifth grade when his father, who is also a member of the credit union and who Sims hired as COO of the company, opened an account for him. “We can close the funding round anytime we want. We currently have five or six investors at varying levels and we still have a lot more that are interested in us,” Sims says, adding that the company has already hit the level it targeted, “but we want to raise more money and there are a couple of more investors who want to come in.” Sims wouldn’t specify how much money he’s raised so far for the publication which will be printed by Journal Graphics, Portland, Ore. He explained that he intends to print-on-demand for credit union subscribers, “so we’ll never have any waste.” Sims said he wasn’t personally involved in the MBL loan application process – he left that to his dad – but he said he had to provide information such as cash flow projections for the company, an executive summary, and a business plan explaining what the money was going to be used for. “OSU FCU went through its due diligence,” Sims said. He explained that brass young today rich tomorrow is designed to be an education piece and marketing tool written to appeal to the 18-25 year age group, but some credit unions he’s talked with have discussed using it to replace their quarterly newsletter. For $2,495 a year, the magazine can be customized to include a credit union magazine cover that features the credit union’s logo and colors. “Think how much it would cost a credit union to product a 4-color, glossy newsletter. This way they can get a slicker piece for less money,” he said. -