Introduction And Opportunity:
Fathom Digital has rapidly become the premier partner for four of the top six Employee Retention Credit processors in the United States.
Our goal with the use of funding is to bring all processing in-house and generate leads at a rate that will allow for 100 plus ERC filings per month.
Doing the math, with an average ERC refund of $200,000 at a fee rate of 10% retained by our filing partner and 10% retained by ourselves, filing at this rate would yield $1,000,000 plus profit per month to Fathom Digital within the next sixty days.
This calculation is conservative and made based on the averages we see every day and the business we are currently generating. That said, with respect to businesses that are larger in size, refunds and the fees retained from their stand are excitingly more sizeable.
Currently, Fathom Digital charges our partners a fee per lead and a percentage of the refund amount if the lead results in a filing. 30% of the leads Fathom provides results to a filing. We currently see $70,000+ monthly profit margin operating in our existing model.
Employee Retention Credit (ERC) Overview:
- Payment issued from the CARES Act [like Paycheck Protection Program (PPP) but separate from PPP]
- Given in respect to any difficulties/losses a business may have related to the COVID pandemic and its associated mandates during 2020 and 2021
- Made as a grant/refund payment, not a loan.
- Paid directly to a business by the US Treasury.
- The amount is up to $26,000 per W2 employee that a business retained in the years 2020 and 2021 with respect to certain quarterly revenues (i.e. If an eligible business retained 6 employees in 2020 and 2021, they qualify for up to $312,000 in ERC aka up to $156,000 for each year.
- Businesses eligible for ERC must have had at least 5 W2 employees during the period they wish to file. This is a federally implemented base requirement.
- If a business received PPP, odds are high that they qualify for ERC.
ERC Filing Overview:
- Tends to be an intricate, tedious, and time-consuming process for the individual processing it.
- Less experienced licensed professionals often fail to properly qualify or disqualify businesses, outright hope to avoid being tasked with the filing and its associated work even if they have a client whom is qualified, or they lack adequate familiarity with the opportunity or filing process in general.
- Our partners are ERC specialists, licensed professionals (CPAs and Tax Attorneys) well-versed with the filing, transacting it quickly, efficiently, seamlessly
- Once ERC is filed, the refund process takes an average of 4-6 months.
ERC Opportunity Overview:
- One of the largest business opportunities to existing in decades, as over $400 Billion dollars has been earmarked by the US government for this program.
- ***MAJORITY OF ELIGIBLE BUSINESSES HAVE YET TO FILE***
- Average ERC refund is over $200,000.
- Our partners typically charge 15-20% of the refund as their fee, making the average filing fee retained ranging anywhere from $30,000-$40,000 per business.
- Though the ERC refund process takes an average of 4-6 months, our agency receives payment from our partners immediately at the time of filing, the amount being an assigned percentage of the filing fee retained by the processor.
Our Team:
- Noah Lee: Fathom Digital Founder & CEO
Noah spent 17 years as a Strategic Account Executive for some of the largest Fortune 500 tech companies (Dell/EMC, Citrix) and billion-dollar unicorn tech companies (InVision, HackerRank), selling over $70M in software and services to Fortune 1,000 companies.
Noah founded Fathom Digital 3 years ago and utilized his experience in lead generation to consult business owners on utilizing LinkedIn to acquire new clients. This expertise quickly helped Noah gain the insight and ability to deliver highly qualified leads at scale to the top ERC processors in the country. Noah continues to perform on behalf of his clients, having earned their respect as a trusted resource for quality leads.
Jordan has spent 11 years as an independently contracted Sales Specialist, transitioning from Insurance sales (Allstate, New York Life Insurance Company) into what is now nearing 5 years of experience in Medical Device sales. She is also owner and founder of an online ecommmerce store.
Skilled in bridging relationships and strategic marketing, Jordan provides oversight in the areas of team training and client/lead prospect communications. She consults leadership and the sales team on best practices and marketing technique.
Gerrard is the founder of Methodized Solution, a lead generation agency, and has spent the last 12 years perfecting the art of lead generation and cold prospecting. Gerrard’s talents and skills have been transferred to our staff yielding significant results in our ERC lead-generation efforts.
Our entire team, including our Agent Lead Generation Team, is comprised of 8 individuals.
Problem:
99% of ERC processors don’t know how to generate leads at scale or don’t have a dedicated marketing team for ERC–that’s why they hire us. It is currently understood that most eligible businesses have yet to file ERC, leaving a wide-open market to capture and deliver leads for potential filings.
Solution:
We, Fathom Digital, are the solution. Already generating ERC leads for four of the top six of the highest-volume ERC processors, we are relied upon to produce ERC lead generation at scale. What makes us unique is our ability to generate quality leads at scale and efficiently, thanks to our in-house call team, ad spend strategy and other lead sources.
Business Model:
We have brought the entire ERC processing life cycle in-house ourselves.
Instead of selling our leads and receiving a small commission on the backend of closed ERC deals, we’ve directly partnered with licensed CPAs and Tax Attorneys who are experts at ERC filings. The relationship is mutually beneficial–they need us to generate the leads, and we need them to work the filings.
We have also created an affiliate program, which drives additional filings and revenue our way without spending additional costs on marketing.
Competition:
There are six main players in the ERC space and numerous smaller CPA and Tax Attorney firms. The “Big Six” we are currently delivering leads to four of them. Our contracts are non-exclusive, and by simply delivering leads and doing our processing in-house, we’d gain a sizeable market share.
Based on our estimates, these firms have filed on behalf of close to 90,000 businesses. At least 60% of eligible businesses have yet to file.
Innovation Refunds
Bottom Line Concepts
Get My Funds
Jorns & Associates
ERC Help Desk
ERC Specialists
We are seeking funding to increase marketing spend and bridge more partnerships directly with CPAs and retain most of the ERC fee earned, and reduce expenses, which will immediately increase the profit margin on the leads we provide and exponentially increase the number of leads we can generate for our partners.
Time is of the essence for this opportunity as there is a deadline to file for the ERC credit, so we are looking to raise funds quickly.
Vision:
Capture as much of the ERC market share as possible via acquiring and processing high-quality; convertible ERC leads en masse. Help as many businesses as possible receive what is due to them from this government-earmarked funding, as most eligible businesses have yet to file.
Traction:
We are already daily generating top-quality leads for this market for six equipped and efficient processors and are being approached daily by other firms for our services.
Funding Ask:
We are seeking $500,000. The funds will be used to increase our already successful lead generation efforts to increase the number of ERC files we can process monthly.
Projections:
We project, at a conservative level, that we can process 100-plus ERC files per month. Our profit is close to $800 per W2 employed filed. An average of ten employees per ERC file is $800,000-$1,500,000 in monthly profit, depending on the file sizes.
Closing : Fathom Digital is poised to capture a share of the ERC market with our already successful strategies, and now we are seeking the right partner to help execute of vision.