In early January, 15winks began its prelaunch phase under the campaign name "BeaFirstMover," selling subscriptions to a mobile dating app that does not yet exist. Marketing materials indicate a 24-month "Premium Service" subscription will cost $384, or $32 monthly. The company claims users will upload 15-second video clips for sharing with other subscribers via GPS-tracked dating profiles.
While the app concept and selling retail subscriptions pose no immediate issues, 15winks is actively soliciting capital investment from "Firstmovers" before its announced March 31st service launch date. The company states full details about its MLM compensation plan will be released later.
15winks draws comparisons to legitimate crowdfunding platforms like IndieGogo and Kickstarter in its promotional materials. It emphasizes "ground floor opportunity" and caps Firstmover positions.
However, a critical difference exists. Nick Clark, who directs 15winks, explains in a promotional video that traditional crowdfunding offers "no potential financial reward." Jeff Wilson, identified as 15winks President, elaborates, stating that while contributors to other projects might receive early releases or merchandise, 15winks Firstmovers "participate in a revenue-share of all future subscriptions."
Crowdfunding platforms intentionally avoid offering financial rewards to comply with securities regulations. This is not an oversight. 15winks offers five investment tiers, each promising shares in revenue pools funded by future app subscriptions.
The Bronze tier costs $250 for one share in a pool funded by 25 cents per monthly subscription, with 5,000 positions available. Silver costs $500 for one share in a 50-cent-per-subscription pool, with 4,000 positions. Emerald is $1,000 for one share in a 50-cent pool, with 2,000 positions. Gold requires $2,500 for one share in a 50-cent pool, with 800 positions. The Platinum tier costs $5,000 for one share in a 50-cent pool, with 400 positions.
If all positions fill, 15winks stands to raise $9.25 million. The company claims these pools will be funded by retail customer subscriptions. The immediate concern is the offering of revenue-sharing interests to individuals who only provide money, without any work required.
A search of the SEC's Edgar database for "15winks" and "15 winks" yielded no registration filings. The SEC states that any offer and sale of securities, even to a single person, must either be registered or meet a specific exemption under the Securities Act. Selling unregistered securities is a felony.
The SEC's guidance on crowdfunding specifies that such sites do not offer securities like ownership interests or profit shares. Instead, money is contributed as donations or in exchange for a product. 15winks asks for $250 to $5,000 based on an expectation of over 100% return on investment through revenue-sharing pools, with no product yet, and no work required from the investor.
The company further complicates matters by paying referral commissions on Firstmover deposits. Its Terms and Conditions state, "There are no required product purchases to participate in the 15winks Firstmover two-tiered affiliate launch partner commissions." It promises a 30% first-tier commission for personally referred launch partners and a 10% second-tier commission.
This means investors are asked to deposit capital, then recruit others to do the same, earning commissions on their deposits. This structure resembles a hybrid pyramid or Ponzi scheme.
In late 2012, Montana's Commissioner of Securities and Insurance (CSI) fined Funky Shark $40,000 for illegally selling investment opportunities. Funky Shark offered "founding member" positions for $1,000 and paid $500 referral commissions. Following regulatory action, Funky Shark shut down, refunded investors, and disappeared. 15winks' model, with higher investment amounts and a two-tiered recruitment commission, raises similar concerns.