Since its founding in 2016, StartEngine has raised over $125 million for over 325 companies.   CEO Howard Marks co-founded what is now Activision Blizzard (NASDAQ:ATVI), but most people couldn’t pick him out of a line-up. Look for him on Wikipedia and you’ll find a different Howard Marks, a billionaire whose Oaktree Capital Management specializes in distressed securities.   To gain star power, StartEngine recruited “Mr. Wonderful,” investor and Shark Tank talent Kevin O’Leary, as a strategic advisor and investor. StartEngine calls itself the largest equity crowdfunding program.   But don’t let that stop you from taking this incubator and crowdfunding enterprise seriously.  

StartEngine Review: What’s Under the Hood

  StartEngine is a full-featured crowdfunding enterprise that takes advantage of every opportunity.   Launched to do equity crowdfunding under the JOBS Act, StartEngine was approved as a broker-dealer in 2019 and accepts bitcoin as well as dollars from investors.   StartEngine crowdfunds itself. It closed its first Reg A+ round for $8.6 million, at $7.50 per share, then began a second round of $41 million at a price of $11.25, and it has filed for a regular CF offering at truCrowd, listing its valuation at $190 million.   Marks says he got interested in initial coin offerings in 2017 and launched its first ICO, for tZero, founded by Overstock.com (NASDAQ:OSTK) founder Patrick Byrne, in 2018.   StartEngine launched its first investor meeting, called the StartEngine Founders Summit, in 2018. The most recent one was virtual, a March webinar.  

The O’Leary Connection

  Marks said several of his companies had already been on Shark Tank before he approached O’Leary. In addition to acting as a strategic advisor and face of the franchise — with advice for entrepreneurs and StartEngine publicized through his fame — O’Leary is also a shareholder.   It’s Marks who runs the show. His aim is to provide a new base for companies, helping them sell equity from startup through public offering. He has an interest in every type of crowdfunding vehicle and wants crowdfunding to be as legitimate as Goldman Sachs (NYSE:GS).  

Some StartEngine Successes

  StartEngine calls its crowdfunding efforts online public offerings.   One of past successes is BioClonetics, working on a cure for HIV using monoclonal antibodies. It raised $256,000 on a valuation of $15 million.   Farm.One uses vertical farming, hydroponics and LED lighting to grow rare produce in New York’s Tribeca neighborhood. It raised $446,000 on a valuation of $7 million.   A third funding winner, Mycroft AI, offers a voice interface that isn’t controlled by a large platform such as Amazon (NASDAQ:AMZN). It raised $1.07 million at a valuation of $19.9 million.  

Current Offerings

  Here are some of the 76 current offerings:   TerraCycle says it can recycle the “unrecyclable,” turning things like toothbrushes and laundry bottles into plastic feedstock. The company made $1.1 million on revenue of $20 million in 2018 and pays a dividend.   IX Water converts industrial containment water, the kind you find around oil wells, into usable water. Drillers produced 150 billion barrels of this water last year, which IX calls a $75 billion opportunity. So far, it has raised $133,000 at a valuation of $13.1 million.   Knightscope offers crime-fighting robots in the form of machine-as-a-service tech. They range from stationary and indoor models to one that can roll across a variety of outdoor terrains. So far, it has raised $7.1 million at StartEngine, out of a total investment of $40 million.  

The Bottom Line on StartEngine

  While most StartEngine offerings are for equity, the company does host other types of offers, including those for a revenue share, convertible stock and debt. Investor money is held in escrow until closing, then disbursed to the offering company. The equity is in the form of a subscription agreement.   StartEngine is, like the companies whose offerings it sponsors, a startup seeking both a leadership position within its niche and legitimacy for that niche. It has already taken large strides toward that aim.   Dana Blankenhorn has been a financial and technology journalist since 1978. His latest book is Technology’s Big Bang: Yesterday, Today and Tomorrow with Moore’s Law, essays on technology available at the Amazon Kindle store. Follow him on Twitter at @danablankenhorn. As of this writing he owned shares in AMZN.      

TerraCycle stock is the first equity crowdfunding idea I’ve seen on InvestorPlace that I might invest in. The company probably doesn’t need crowdfunding at all. While you can still buy shares at $100 each through StartEngine, TerraCycle stock has already issued its first dividend, $2.09 per share. The recycling disruptor earned $3.2 million in 2019 on $27.1 million in revenue, up 35% from the previous year. It’s currently seeking $14.8 million on a $50 million valuation. TerraCycle isn’t flying under the radar. It was called the “Coolest Start-up in America” back in 2006. At the time its main business was converting food waste into fertilizer using worms. Now it’s focused on hard-to-recycle plastic, building networks that collect packaging, process it and sell it back as new packaging.

TerraCycle stock is the first equity crowdfunding idea I’ve seen on InvestorPlace that I might invest in. The company probably doesn’t need crowdfunding at all. While you can still buy shares at $100 each through StartEngine, TerraCycle stock has already issued its first dividend, $2.09 per share. The recycling disruptor earned $3.2 million in 2019 on $27.1 million in revenue, up 35% from the previous year. It’s currently seeking $14.8 million on a $50 million valuation. TerraCycle isn’t flying under the radar. It was called the “Coolest Start-up in America” back in 2006. At the time its main business was converting food waste into fertilizer using worms. Now it’s focused on hard-to-recycle plastic, building networks that collect packaging, process it and sell it back as new packaging.

In our consumer-driven culture and economy, we rarely give a second thought about our waste footprint. Yet according to industry experts, per-capita waste generated in North America is approximately 2.5 kilograms daily. Worldwide, the figure will only increase, inspiring recycling firm TerraCycle to offer a bold new solution: scale up the recycling infrastructure to include virtually any product that we touch. This groundbreaking proposition is at the heart of why you should invest in TerraCycle stock.   Currently, the broader recycling industry has massive end-result inefficiencies. Yes, we have a “culture” of recycling in the sense that we separate unrecyclable garbage from recyclable goods, putting waste into their appropriate containers. However, this creates two problems: first, the garbage that we throw away ends up in landfills, and second, our recyclable goods often end up in someone else’s landfill.   Indeed, the waste problem has severe geopolitical implications. Last year and prior to the novel coronavirus pandemic, The Atlantic sounded the alarm, noting that for decades, Chine has taken the bulk of our recycling raw materials. But increasingly, China and many other developing nations have restricted or rejected America’s trash.   Therefore, we may eventually find ourselves being suffocated with our own waste, recyclable or otherwise. Further, most waste products are traditionally considered unrecyclable, thus accelerating our trash crisis. Hence, this is why forward-thinking investors have sought how to invest in TerraCycle stock.   To summarize, here are the three key reasons why you should consider this particularly compelling equity crowdfunding opportunity:  

• 10 Growth Stocks That Could Seriously Double

• Help solve a rapidly accelerating waste production crisis
• Partnerships with major corporations
• Purpose-driven business for a purpose-driven generation

  Below, we’ll discuss in greater detail why this private investing offer can change the trajectory of waste management.  

Invest in TerraCycle Stock to Advance a Necessary Cultural Shift

  As I mentioned above, every person in North America on average produces 2.5 kilograms (that’s slightly more than five-and-a-half pounds) of waste every day. What may surprise people is that much of this collective garbage gets sent to other countries. However, as developing parts of the world grow their economies, they don’t want to put up with this indignity.   Who can blame them? But that’s not the worst problem. When these nations shift their economies from elemental, agrarian- or commodity-based commerce to advanced manufacturing or even technological, their consumer base will be elevated in terms of purchasing power.   As we saw with the almost miraculous ascent of China, when people have money to spend, they consume. And when they consume, that leads to greater waste. Therefore, the idea to invest in TerraCycle stock isn’t just centered on profitability concerns, as is the case with many equity crowdfunding opportunities. No, we desperately need a solution.   What separates TerraCycle from the crowd is its unique ability to repurpose previously unrecyclable goods that would ordinarily end up in landfills into economically viable end products. Better yet, this mission statement isn’t just pie in the sky. Multiple blue-chip organizations, including Colgate-Palmolive Company (NYSE:CL) and PepsiCo (NASDAQ:PEP), have partnered with the innovative firm.   Really, even taking aside the profit motivation, both corporations and regular people see the writing on the wall. According to Rubicon.com, 90% of all solid waste in the U.S. does not get recycled. Thus, TerraCycle’s CEO, Tom Szaky, believes his underlying business is “the biggest and most powerful tool for change.”   But it’s not just the operational side of recycling that he’s concerned about. Rather, with his concept, Szaky would like everyone to rethink the idea of the consumption and waste process. By eschewing one-use containers for multi-use ones, individual consumers can participate in meaningful social change.   For example, think about Starbucks (NASDAQ:SBUX) and its reusable coffee cup policy: consumers save a little and Starbucks can mitigate some of their overhead costs. As well, we have collectively less waste. Bring this concept to scale and you’ll likely promote wholesale efficiencies. Thus, you can also see why so many want to invest in TerraCycle stock.  

Repurposed Risks

  Like any equity crowdfunding opportunity, there are many risks involved with TerraCycle. First, private investing offers are usually illiquid. Therefore, if you invest in TerraCycle stock, you’re basically committed for the long haul.   Further, due diligence is a must for any investment. But for equity crowdfunding, this takes on greater importance due to the lack of information available relative to blue-chip investments. Therefore, you should think carefully before diving into private investing.   On the business end, the catalyst to invest in TerraCycle stock seems like a no-brainer. As detailed above, you have a critical crisis driving the narrative. If we don’t solve the problem, at some point, our rabid consumption will be our downfall.   Here, the purpose-driven millennial generation is a major plus for TerraCycle. This and the emerging Gen Z will likely lay the groundwork for positive climate change policies. With TerraCycle’s myriad solutions, the company offers easy, perhaps even fun ways to participate in ethical climate-friendly behaviors.   But the problem is getting the rest of America – including millennials – to get on board with the program. Again, according to Rubicon.com, “The U.S. recycling rate is around 34.5%. If we’re able to get the rate to 75%, the effect will be like removing 50 million passenger cars from U.S. roads.”   Clearly, for those who are on the fence on whether they should invest in TerraCycle stock or not, this recycling participation rate must move higher. Supposedly, the people are willing. However, the coronavirus has thrown a wrinkle into this assumption.   As you know, we have quite a few Americans that are raising a fuss about wearing a face mask. If such a simple thing causes uproars, recycling initiatives may not achieve much participation.  

A Groundbreaking Solution

  At the end of the day, I believe many will come to the conclusion that the good far outweighs the bad, and therefore invest in TerraCycle stock. Someone has to create a solution to this global crisis. Here, TerraCycle is both a thought leader and platform provider.   If you’d like to take a shot, visit TerraCycle’s investor page website. Shares are offered as Regulation A securities, which are exempt from Securities and Exchange Commission registration. Please note the nuances associated with Regulation A stocks, as well as TerraCycle’s own disclosed risk factors.   A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. As of this writing, he did not hold a position in any of the aforementioned securities.   The post Invest in TerraCycle Stock to Stem Our Waste Management Crisis appeared first on InvestorPlace.

In our consumer-driven culture and economy, we rarely give a second thought about our waste footprint. Yet according to industry experts, per-capita waste generated in North America is approximately 2.5 kilograms daily. Worldwide, the figure will only increase, inspiring recycling firm TerraCycle to offer a bold new solution: scale up the recycling infrastructure to include virtually any product that we touch. This groundbreaking proposition is at the heart of why you should invest in TerraCycle stock.   Currently, the broader recycling industry has massive end-result inefficiencies. Yes, we have a “culture” of recycling in the sense that we separate unrecyclable garbage from recyclable goods, putting waste into their appropriate containers. However, this creates two problems: first, the garbage that we throw away ends up in landfills, and second, our recyclable goods often end up in someone else’s landfill.   Indeed, the waste problem has severe geopolitical implications. Last year and prior to the novel coronavirus pandemic, The Atlantic sounded the alarm, noting that for decades, Chine has taken the bulk of our recycling raw materials. But increasingly, China and many other developing nations have restricted or rejected America’s trash.   Therefore, we may eventually find ourselves being suffocated with our own waste, recyclable or otherwise. Further, most waste products are traditionally considered unrecyclable, thus accelerating our trash crisis. Hence, this is why forward-thinking investors have sought how to invest in TerraCycle stock.   To summarize, here are the three key reasons why you should consider this particularly compelling equity crowdfunding opportunity:  

• 10 Growth Stocks That Could Seriously Double

• Help solve a rapidly accelerating waste production crisis
• Partnerships with major corporations
• Purpose-driven business for a purpose-driven generation

  Below, we’ll discuss in greater detail why this private investing offer can change the trajectory of waste management.  

Invest in TerraCycle Stock to Advance a Necessary Cultural Shift

  As I mentioned above, every person in North America on average produces 2.5 kilograms (that’s slightly more than five-and-a-half pounds) of waste every day. What may surprise people is that much of this collective garbage gets sent to other countries. However, as developing parts of the world grow their economies, they don’t want to put up with this indignity.   Who can blame them? But that’s not the worst problem. When these nations shift their economies from elemental, agrarian- or commodity-based commerce to advanced manufacturing or even technological, their consumer base will be elevated in terms of purchasing power.   As we saw with the almost miraculous ascent of China, when people have money to spend, they consume. And when they consume, that leads to greater waste. Therefore, the idea to invest in TerraCycle stock isn’t just centered on profitability concerns, as is the case with many equity crowdfunding opportunities. No, we desperately need a solution.   What separates TerraCycle from the crowd is its unique ability to repurpose previously unrecyclable goods that would ordinarily end up in landfills into economically viable end products. Better yet, this mission statement isn’t just pie in the sky. Multiple blue-chip organizations, including Colgate-Palmolive Company (NYSE:CL) and PepsiCo (NASDAQ:PEP), have partnered with the innovative firm.   Really, even taking aside the profit motivation, both corporations and regular people see the writing on the wall. According to Rubicon.com, 90% of all solid waste in the U.S. does not get recycled. Thus, TerraCycle’s CEO, Tom Szaky, believes his underlying business is “the biggest and most powerful tool for change.”   But it’s not just the operational side of recycling that he’s concerned about. Rather, with his concept, Szaky would like everyone to rethink the idea of the consumption and waste process. By eschewing one-use containers for multi-use ones, individual consumers can participate in meaningful social change.   For example, think about Starbucks (NASDAQ:SBUX) and its reusable coffee cup policy: consumers save a little and Starbucks can mitigate some of their overhead costs. As well, we have collectively less waste. Bring this concept to scale and you’ll likely promote wholesale efficiencies. Thus, you can also see why so many want to invest in TerraCycle stock.  

Repurposed Risks

  Like any equity crowdfunding opportunity, there are many risks involved with TerraCycle. First, private investing offers are usually illiquid. Therefore, if you invest in TerraCycle stock, you’re basically committed for the long haul.   Further, due diligence is a must for any investment. But for equity crowdfunding, this takes on greater importance due to the lack of information available relative to blue-chip investments. Therefore, you should think carefully before diving into private investing.   On the business end, the catalyst to invest in TerraCycle stock seems like a no-brainer. As detailed above, you have a critical crisis driving the narrative. If we don’t solve the problem, at some point, our rabid consumption will be our downfall.   Here, the purpose-driven millennial generation is a major plus for TerraCycle. This and the emerging Gen Z will likely lay the groundwork for positive climate change policies. With TerraCycle’s myriad solutions, the company offers easy, perhaps even fun ways to participate in ethical climate-friendly behaviors.   But the problem is getting the rest of America – including millennials – to get on board with the program. Again, according to Rubicon.com, “The U.S. recycling rate is around 34.5%. If we’re able to get the rate to 75%, the effect will be like removing 50 million passenger cars from U.S. roads.”   Clearly, for those who are on the fence on whether they should invest in TerraCycle stock or not, this recycling participation rate must move higher. Supposedly, the people are willing. However, the coronavirus has thrown a wrinkle into this assumption.   As you know, we have quite a few Americans that are raising a fuss about wearing a face mask. If such a simple thing causes uproars, recycling initiatives may not achieve much participation.  

A Groundbreaking Solution

  At the end of the day, I believe many will come to the conclusion that the good far outweighs the bad, and therefore invest in TerraCycle stock. Someone has to create a solution to this global crisis. Here, TerraCycle is both a thought leader and platform provider.   If you’d like to take a shot, visit TerraCycle’s investor page website. Shares are offered as Regulation A securities, which are exempt from Securities and Exchange Commission registration. Please note the nuances associated with Regulation A stocks, as well as TerraCycle’s own disclosed risk factors.   A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. As of this writing, he did not hold a position in any of the aforementioned securities.   The post Invest in TerraCycle Stock to Stem Our Waste Management Crisis appeared first on InvestorPlace.

Since its founding in 2016, StartEngine has raised over $125 million for over 325 companies. CEO Howard Marks co-founded what is now Activision Blizzard (NASDAQ:ATVI), but most people couldn’t pick him out of a line-up. Look for him on Wikipedia and you’ll find a different Howard Marks, a billionaire whose Oaktree Capital Management specializes in distressed securities.   To gain star power, StartEngine recruited “Mr. Wonderful,” investor and Shark Tank talent Kevin O’Leary, as a strategic advisor and investor. StartEngine calls itself the largest equity crowdfunding program.   But don’t let that stop you from taking this incubator and crowdfunding enterprise seriously.  

StartEngine Review: What’s Under the Hood

  StartEngine is a full-featured crowdfunding enterprise that takes advantage of every opportunity.   Launched to do equity crowdfunding under the JOBS Act, StartEngine was approved as a broker-dealer in 2019 and accepts bitcoin as well as dollars from investors.   StartEngine crowdfunds itself. It closed its first Reg A+ round for $8.6 million, at $7.50 per share, then began a second round of $41 million at a price of $11.25, and it has filed for a regular CF offering at truCrowd, listing its valuation at $190 million.   Marks says he got interested in initial coin offerings in 2017 and launched its first ICO, for tZero, founded by Overstock.com (NASDAQ:OSTK) founder Patrick Byrne, in 2018.   StartEngine launched its first investor meeting, called the StartEngine Founders Summit, in 2018. The most recent one was virtual, a March webinar.  

The O’Leary Connection

  Marks said several of his companies had already been on Shark Tank before he approached O’Leary. In addition to acting as a strategic advisor and face of the franchise — with advice for entrepreneurs and StartEngine publicized through his fame — O’Leary is also a shareholder.   It’s Marks who runs the show. His aim is to provide a new base for companies, helping them sell equity from startup through public offering. He has an interest in every type of crowdfunding vehicle and wants crowdfunding to be as legitimate as Goldman Sachs (NYSE:GS).  

Some StartEngine Successes

  StartEngine calls its crowdfunding efforts online public offerings.   One of past successes is BioClonetics, working on a cure for HIV using monoclonal antibodies. It raised $256,000 on a valuation of $15 million.   Farm.One uses vertical farming, hydroponics and LED lighting to grow rare produce in New York’s Tribeca neighborhood. It raised $446,000 on a valuation of $7 million.   A third funding winner, Mycroft AI, offers a voice interface that isn’t controlled by a large platform such as Amazon (NASDAQ:AMZN). It raised $1.07 million at a valuation of $19.9 million.  

Current Offerings

  Here are some of the 76 current offerings:   TerraCycle says it can recycle the “unrecyclable,” turning things like toothbrushes and laundry bottles into plastic feedstock. The company made $1.1 million on revenue of $20 million in 2018 and pays a dividend.   IX Water converts industrial containment water, the kind you find around oil wells, into usable water. Drillers produced 150 billion barrels of this water last year, which IX calls a $75 billion opportunity. So far, it has raised $133,000 at a valuation of $13.1 million.   Knightscope offers crime-fighting robots in the form of machine-as-a-service tech. They range from stationary and indoor models to one that can roll across a variety of outdoor terrains. So far, it has raised $7.1 million at StartEngine, out of a total investment of $40 million.  

The Bottom Line on StartEngine

  While most StartEngine offerings are for equity, the company does host other types of offers, including those for a revenue share, convertible stock and debt. Investor money is held in escrow until closing, then disbursed to the offering company. The equity is in the form of a subscription agreement.   StartEngine is, like the companies whose offerings it sponsors, a startup seeking both a leadership position within its niche and legitimacy for that niche. It has already taken large strides toward that aim.   Dana Blankenhorn has been a financial and technology journalist since 1978. His latest book is Technology’s Big Bang: Yesterday, Today and Tomorrow with Moore’s Law, essays on technology available at the Amazon Kindle store. Follow him on Twitter at @danablankenhorn. As of this writing he owned shares in AMZN.

Imagine walking in a Cupertino neighborhood in 1976 and finding two geeky kids holed up in a garage. “We’re building the world’s next great computer,” the lanky one says. You ask how much it would cost to go from garage band to full-fledged business, and they offer you shares in the startup. You’d walk away having invested in the world’s most valuable publicly traded company, and Steve Jobs gets to drive away with his Volkswagen bus.   Only this is 2020, where fledgling entrepreneurs can turn to crowdfunding to build the next great thing — be it the “Amazon of Pharmacy” or a fully autonomous robotic lawnmower. Anything is possible, if not incredibly risky.   In fact, there can only be risk when investing in startups. Many are pre-revenue, untested and banking on ideas that could be ahead of their time, just right on time or completely off the reservation. You could just as easily invest in the next Theranos before the next Apple (NASDAQ:AAPL).   That’s where we come in. InvestorPlace’s foray into private investing features many of our top writers and analysts. Each of whom have taken deep dives into equity crowdfunding offerings. Reading their insights can give you a leg up when investing in startups.   Here you’ll find snippets taken directly from the articles of our writers on various equity crowdfunding investments. Read through, breathe it in and step confidently into shoes that just 10 years were filled by accredited investors:     Equity Crowdfunding Site: SeedInvest Days Left to Invest: 17 days   Let me start this piece by saying three very important things:   First, I’d like to introduce you to NowRx, an on-demand e-pharmacy which — much like Amazon (NASDAQ:AMZN) leveraged technology and same-day shipping to disrupt the multi-trillion dollar retail market — is leveraging technology and a same-day prescription delivery service to disrupt the several hundred billion dollar U.S. legacy pharmacy industry.   In this sense, I like to think of NowRx as the “Amazon of Pharmacy.”   Second, NowRx is not a public company. You can’t buy and sell shares of NowRx like you can buy and sell shares of Amazon. Bummer.   Third, thanks to some major advancements in crowdfunding technology and legislation, you can now invest in next-generation startups like NowRx for the long haul.   Simply go to SeedInvest.com. Create an account (it only takes a few minutes). Search for NowRx, and click the button that says “Invest in NowRx.”   It’s that simple.         Equity Crowdfunding Site: StartEngine Amount Raised: $3.19mm of its $12.75mm funding goal Hunting for the next Amazon (NASDAQ:AMZN) doesn’t necessarily mean you’re searching for the next big consumer tech explosion. “The next Amazon” largely means finding the next high-growth stock of the future. And the earlier you invest in these companies, the bigger the gains. Few options can beat privately traded firms in this regard, but private investing has historically held a high barrier to entry.   Does your net worth exceed $1 million (not including your primary residence)? Do you make more than $200,000 per year ($300,000 if you file taxes jointly with your spouse)? If you do, congratulations! You’re an accredited investor and can invest in private businesses.   If not, don’t fret. You can still invest in privately traded companies through equity crowdfunding … but, boy, if there were ever an area of the market that felt as if it were pioneered by the likes of Saul Goodman, it’s regulation crowdfunding.   That’s because regulation crowdfunding stipulates that firms raise no more than $1.07 million … per year. This severely hampers the quality of offerings, as few startups worth investing in need such small amounts of cash. Regulation A+ offerings, though, can raise substantially more. So when looking through offerings, I stuck to swiping through companies in the latter category … and I stumbled on an anomaly in TerraCycle.   Now I’m sure many of you have heard of this company in passing before, but what caught my eye was the amount it’s raised ($12 million) and the revenue it already brings in ($20 million in 2018).   By the end of its funding round, TerraCycle hopes to raise $25 million. Just what is this company that I’ve never heard of and how is it that it’s already profitable. And why does it continue to attract so much cash from everyday people?     Read more here.       Equity Crowdfunding Site: SeedInvest Amount Raised: $1.09mm raised   As readers of mine know, I’m hugely bullish on the equity crowdfunding space, seeing it as an enormous opportunity for retail investors to diversify their portfolio with potentially explosive early-stage investments in tomorrow’s most important companies.   With that in mind, one of the more interesting private investments that I’ve come across on crowdfunding platform SeedInvest is robotic commercial lawnmower maker, Graze.   In short, Graze is a pre-revenue company that has developed a fully-autonomous, robotic commercial lawnmower. Management believes this breakthrough technology has the power to disrupt the $54 billion U.S. commercial landscaping market, by addressing and eliminating the market’s biggest pain-points: labor costs, fuel costs, safety-related workers compensation and pollution.   Those pain-points are painful enough — and the benefits of Graze’s solutions clear enough — that I do believe this company has a good opportunity to become a meaningfully large player in the U.S. commercial landscaping market.   If so, an investment in Graze today could yield huge returns.   Graze’s current financing round on SeedInvest values the company at $23 million (pre-money). My modeling suggests that a $1 billion valuation is possible within the next decade. That represents several thousand percent return.   Read more here.     Equity Crowdfunding Site: Republic Days Left to Invest: 59 days   Technology has certainly helped to deal with the terrible impact of the novel coronavirus pandemic, as seen with Slack Technologies (NYSE:WORK) and Zoom Video Communications (NASDAQ:ZM). But there are a variety of early-stage startups that are looking to provide solutions as well. Just look at Hearo.Live. The company’s mobile app allows you to chat while doing such things as watching movies, games, Netflix (NASDAQ:NFLX) streams or shows. What’s more, through the crowdfunding site Republic, you can invest in Hearo.Live.   The founders include CEO Edward Lerner and Dwight Kwok, the company’s vice president of business development. Lerner is the person who wrote Electronic Arts’ (NASDAQ:EA) first 3D game. He has also created companies likes Looking Glass and Multitidue. As for Kwok, he was the general manager in Greater China for Xsolla, where he was responsible for monetizing media and entertainment properties. So far, the company has raised $196,536 from 629 investors and the valuation is $12.5 million.   Read more here.     Equity Crowdfunding Site: Republic Days Left to Invest: 75 days   Fleeting, which operates a platform to better manage trucking fleets, is using the crowdfunding site Republic to raise capital. So far, the company has received commitments for $219,559 from more than 1,000 investors. And the valuation is $10 million if you want to invest in Fleeting.   The company got its start back in April 2018. There are also three founders, which include:  

• CEO Pierre Laguerre: He has 11 years experience as a CDL Class A Truck driver and owned his own operation, which generated $1 million in revenues during the first year. Laguerre has started several other businesses, with the aggregate revenues of $4 million.
• CTO Anil Jagarlamudi: He has over two decades experience in the software industry and has held executive-level positions at companies like Luma and AirWatch, which was acquired by VMware (NYSE:VMW).
• COO Paul Munguia: His background is in the fintech industry. He also co-founded Upright, which helps to build startups.

  Read more here.     Equity Crowdfunding Site: Republic Days Left to Invest: 60 days   Genobank.io, a startup that is developing a secure DNA kit, is currently raising a round of capital though the Republic crowdfunding platform. So far more than $325,000 has been raised from more than 1,000 investors. The valuation is set at $10 million.   The founders include Daniel Uribe, who is the CEO, and Everardo Barojas. Uribe is a serial entrepreneur and has worked at companies like Sun Microsystems. Some of his areas of expertise include cybersecurity, blockchain, and cloud computing. He also has a degree in electrical engineering and an executive MBA from Stanford GSB.   As for Barojas, he is a PhD candidate and has a computer science degree. His main focus at Genobank is on the technology side, such as with the development of the RexChain fork for encrypted data.   Read more here.     Equity Crowdfunding Site: Republic Days Left to Invest: 121 days   The past decade has seen much transformation of transportation, as seen with breakout companies like Uber (NYSE:UBER) and Lyft (NASDAQ:LYFT). But for the founders of startup Upshift – Ezra Goldman, who started a dockless bikeshare service in 1999 and Ayako Hiwasa, a social entrepreneur – believe that there is still much room for interesting ideas in the space.   Now Upshift is essentially reimagining the traditional car purchase model.   To prove this out, Upshift is raising capital on the crowdsourcing platform, Republic. The valuation of the round is at $8 million.   Then how does Upshift work? Let’s take a look at the workflow. If you need a car, you text Upshift for where you want the vehicle delivered and at what time. The company will then drive it to you, all gassed up and clean.   You can then take it anywhere you want. Keep in mind that there are no mileage restrictions. And when you are finished, Upshift will pick up the vehicle.   OK, why do this instead of getting a ride from Uber or Lyft?   Read more here.     Equity Crowdfunding Site: Republic Days Left to Invest: 10 days   Teooh, which is a developer of a mobile app for virtual events, is attempting to raise a round of capital. The approach is to use a crowdfunding platform called Republic. For Teooh’s funding, the valuation cap is $10 million.   OK then, let’s get some background on the company: When Don Stein graduated from college, he moved from Detroit to San Francisco, with the goal of becoming a venture capitalist. But this proved extremely difficult as he had few contacts in the industry. He kept networking and met a prominent angel investor, who liked Stein’s approach. With the investor’s help, he seeded a small venture fund called Candela Partners.   A key part of the strategy was actually to host events with the portfolio companies. Yet there was a nagging issue: Only those around the Bay area could attend.   Stein wondered if he could use cutting-edge technologies like Virtual Reality (VR) and Augmented Reality (AR) to create virtual events. In other words, would it be possible to replicate the face-to-face experience?   Read more here.     Equity Crowdfunding Site: StartEngine Days Left to Invest: 29 days   I recently wrote about three equity crowdfunding investments raising funds on StartEngine, which the 2020 Inc. 5000 calls the 10th fastest-growing private company in the state of California. The star of the article was BrewDog USA, the American subsidiary of the U.K. craft brewer, that’s used its Equity for Punks platform since 2010 to raise millions of dollars of capital to fund its growth. In both crowdfunding and craft beer circles, BrewDog’s reputation is legendary. In addition to Brew Dog, I recommended investors check out two other StartEngine equity crowdfunding investments worthy of consideration. One of them was ModVans, a California-based manufacturer of CV1 modular van conversions.   “Why do I like it?” I stated April 19. “Millennials will love the company’s CV1 campervan. Plus, it already has $3.7 million in sales.” How popular are campervans with millennials? Thor Industries (NYSE:THO), the largest manufacturer of motorhomes and trailers in the U.S., has big plans for this segment of the RV market.   “We see growing potential for [the camper van] product category in North America,” Thor Industries CEO Bob Martin said in April. “Last year, the camper community there grew by 1.4 million households — 56 percent of which are millennials. These new participants are often returning to the roots of campervanning and prefer a lifestyle that involves less effort while offering more adventure and experiential quality.”   Read more here.     Equity Crowdfunding Site: StartEngine Amount Raised: $7.12mm of $11.75mm goal   Founded in 2013, Knightscope is the developer of fully autonomous security robots or bots. The company’s mission is “to make the United States of America the safest country in the world.” But is Knightscope a business you can invest in?   The company is actually raising capital through an online crowdfunding platform, called StartEngine. The goal is to raise $50 million.   Note that Knightscope has already raised $46.6 million from prior rounds of financing, such as from family offices and retail investors. So let’s get a backgrounder on the company and its prospects.

Imagine walking in a Cupertino neighborhood in 1976 and finding two geeky kids holed up in a garage. “We’re building the world’s next great computer,” the lanky one says. You ask how much it would cost to go from garage band to full-fledged business, and they offer you shares in the startup. You’d walk away having invested in the world’s most valuable publicly traded company, and Steve Jobs gets to drive away with his Volkswagen bus.   Only this is 2020, where fledgling entrepreneurs can turn to crowdfunding to build the next great thing — be it the “Amazon of Pharmacy” or a fully autonomous robotic lawnmower. Anything is possible, if not incredibly risky.   In fact, there can only be risk when investing in startups. Many are pre-revenue, untested and banking on ideas that could be ahead of their time, just right on time or completely off the reservation. You could just as easily invest in the next Theranos before the next Apple (NASDAQ:AAPL).   That’s where we come in. InvestorPlace’s foray into private investing features many of our top writers and analysts. Each of whom have taken deep dives into equity crowdfunding offerings. Reading their insights can give you a leg up when investing in startups.   Here you’ll find snippets taken directly from the articles of our writers on various equity crowdfunding investments. Read through, breathe it in and step confidently into shoes that just 10 years were filled by accredited investors: Equity Crowdfunding Site: SeedInvest Days Left to Invest: 17 days   Let me start this piece by saying three very important things:   First, I’d like to introduce you to NowRx, an on-demand e-pharmacy which — much like Amazon (NASDAQ:AMZN) leveraged technology and same-day shipping to disrupt the multi-trillion dollar retail market — is leveraging technology and a same-day prescription delivery service to disrupt the several hundred billion dollar U.S. legacy pharmacy industry.   In this sense, I like to think of NowRx as the “Amazon of Pharmacy.”   Second, NowRx is not a public company. You can’t buy and sell shares of NowRx like you can buy and sell shares of Amazon. Bummer.   Third, thanks to some major advancements in crowdfunding technology and legislation, you can now invest in next-generation startups like NowRx for the long haul.   Simply go to SeedInvest.com. Create an account (it only takes a few minutes). Search for NowRx, and click the button that says “Invest in NowRx.”   It’s that simple. Equity Crowdfunding Site: StartEngine Amount Raised: $3.19mm of its $12.75mm funding goal   Hunting for the next Amazon (NASDAQ:AMZN) doesn’t necessarily mean you’re searching for the next big consumer tech explosion. “The next Amazon” largely means finding the next high-growth stock of the future. And the earlier you invest in these companies, the bigger the gains. Few options can beat privately traded firms in this regard, but private investing has historically held a high barrier to entry.   Does your net worth exceed $1 million (not including your primary residence)? Do you make more than $200,000 per year ($300,000 if you file taxes jointly with your spouse)? If you do, congratulations! You’re an accredited investor and can invest in private businesses.   If not, don’t fret. You can still invest in privately traded companies through equity crowdfunding … but, boy, if there were ever an area of the market that felt as if it were pioneered by the likes of Saul Goodman, it’s regulation crowdfunding.   That’s because regulation crowdfunding stipulates that firms raise no more than $1.07 million … per year. This severely hampers the quality of offerings, as few startups worth investing in need such small amounts of cash. Regulation A+ offerings, though, can raise substantially more. So when looking through offerings, I stuck to swiping through companies in the latter category … and I stumbled on an anomaly in TerraCycle.   Now I’m sure many of you have heard of this company in passing before, but what caught my eye was the amount it’s raised ($12 million) and the revenue it already brings in ($20 million in 2018).   By the end of its funding round, TerraCycle hopes to raise $25 million. Just what is this company that I’ve never heard of and how is it that it’s already profitable. And why does it continue to attract so much cash from everyday people?     Read more here. Equity Crowdfunding Site: SeedInvest Amount Raised: $1.09mm raised   As readers of mine know, I’m hugely bullish on the equity crowdfunding space, seeing it as an enormous opportunity for retail investors to diversify their portfolio with potentially explosive early-stage investments in tomorrow’s most important companies.   With that in mind, one of the more interesting private investments that I’ve come across on crowdfunding platform SeedInvest is robotic commercial lawnmower maker, Graze.   In short, Graze is a pre-revenue company that has developed a fully-autonomous, robotic commercial lawnmower. Management believes this breakthrough technology has the power to disrupt the $54 billion U.S. commercial landscaping market, by addressing and eliminating the market’s biggest pain-points: labor costs, fuel costs, safety-related workers compensation and pollution.   Those pain-points are painful enough — and the benefits of Graze’s solutions clear enough — that I do believe this company has a good opportunity to become a meaningfully large player in the U.S. commercial landscaping market.   If so, an investment in Graze today could yield huge returns.   Graze’s current financing round on SeedInvest values the company at $23 million (pre-money). My modeling suggests that a $1 billion valuation is possible within the next decade. That represents several thousand percent return.   Read more here.   Equity Crowdfunding Site: Republic Days Left to Invest: 59 days   Technology has certainly helped to deal with the terrible impact of the novel coronavirus pandemic, as seen with Slack Technologies (NYSE:WORK) and Zoom Video Communications (NASDAQ:ZM). But there are a variety of early-stage startups that are looking to provide solutions as well. Just look at Hearo.Live. The company’s mobile app allows you to chat while doing such things as watching movies, games, Netflix (NASDAQ:NFLX) streams or shows. What’s more, through the crowdfunding site Republic, you can invest in Hearo.Live.   The founders include CEO Edward Lerner and Dwight Kwok, the company’s vice president of business development. Lerner is the person who wrote Electronic Arts’ (NASDAQ:EA) first 3D game. He has also created companies likes Looking Glass and Multitidue. As for Kwok, he was the general manager in Greater China for Xsolla, where he was responsible for monetizing media and entertainment properties. So far, the company has raised $196,536 from 629 investors and the valuation is $12.5 million.   Read more here. Equity Crowdfunding Site: Republic Days Left to Invest: 75 days   Fleeting, which operates a platform to better manage trucking fleets, is using the crowdfunding site Republic to raise capital. So far, the company has received commitments for $219,559 from more than 1,000 investors. And the valuation is $10 million if you want to invest in Fleeting.   The company got its start back in April 2018. There are also three founders, which include:  

• CEO Pierre Laguerre: He has 11 years experience as a CDL Class A Truck driver and owned his own operation, which generated $1 million in revenues during the first year. Laguerre has started several other businesses, with the aggregate revenues of $4 million.
• CTO Anil Jagarlamudi: He has over two decades experience in the software industry and has held executive-level positions at companies like Luma and AirWatch, which was acquired by VMware (NYSE:VMW).
• COO Paul Munguia: His background is in the fintech industry. He also co-founded Upright, which helps to build startups.

  Read more here. Equity Crowdfunding Site: Republic Days Left to Invest: 60 days   Genobank.io, a startup that is developing a secure DNA kit, is currently raising a round of capital though the Republic crowdfunding platform. So far more than $325,000 has been raised from more than 1,000 investors. The valuation is set at $10 million.   The founders include Daniel Uribe, who is the CEO, and Everardo Barojas. Uribe is a serial entrepreneur and has worked at companies like Sun Microsystems. Some of his areas of expertise include cybersecurity, blockchain, and cloud computing. He also has a degree in electrical engineering and an executive MBA from Stanford GSB.   As for Barojas, he is a PhD candidate and has a computer science degree. His main focus at Genobank is on the technology side, such as with the development of the RexChain fork for encrypted data.   Read more here. Equity Crowdfunding Site: Republic Days Left to Invest: 121 days   The past decade has seen much transformation of transportation, as seen with breakout companies like Uber (NYSE:UBER) and Lyft (NASDAQ:LYFT). But for the founders of startup Upshift – Ezra Goldman, who started a dockless bikeshare service in 1999 and Ayako Hiwasa, a social entrepreneur – believe that there is still much room for interesting ideas in the space.   Now Upshift is essentially reimagining the traditional car purchase model.   To prove this out, Upshift is raising capital on the crowdsourcing platform, Republic. The valuation of the round is at $8 million.   Then how does Upshift work? Let’s take a look at the workflow. If you need a car, you text Upshift for where you want the vehicle delivered and at what time. The company will then drive it to you, all gassed up and clean.   You can then take it anywhere you want. Keep in mind that there are no mileage restrictions. And when you are finished, Upshift will pick up the vehicle.   OK, why do this instead of getting a ride from Uber or Lyft?   Read more here.   Equity Crowdfunding Site: Republic Days Left to Invest: 10 days   Teooh, which is a developer of a mobile app for virtual events, is attempting to raise a round of capital. The approach is to use a crowdfunding platform called Republic. For Teooh’s funding, the valuation cap is $10 million.   OK then, let’s get some background on the company: When Don Stein graduated from college, he moved from Detroit to San Francisco, with the goal of becoming a venture capitalist. But this proved extremely difficult as he had few contacts in the industry. He kept networking and met a prominent angel investor, who liked Stein’s approach. With the investor’s help, he seeded a small venture fund called Candela Partners.   A key part of the strategy was actually to host events with the portfolio companies. Yet there was a nagging issue: Only those around the Bay area could attend.   Stein wondered if he could use cutting-edge technologies like Virtual Reality (VR) and Augmented Reality (AR) to create virtual events. In other words, would it be possible to replicate the face-to-face experience?   Read more here. Equity Crowdfunding Site: StartEngine Days Left to Invest: 29 days   I recently wrote about three equity crowdfunding investments raising funds on StartEngine, which the 2020 Inc. 5000 calls the 10th fastest-growing private company in the state of California. The star of the article was BrewDog USA, the American subsidiary of the U.K. craft brewer, that’s used its Equity for Punks platform since 2010 to raise millions of dollars of capital to fund its growth. In both crowdfunding and craft beer circles, BrewDog’s reputation is legendary. In addition to Brew Dog, I recommended investors check out two other StartEngine equity crowdfunding investments worthy of consideration. One of them was ModVans, a California-based manufacturer of CV1 modular van conversions.   “Why do I like it?” I stated April 19. “Millennials will love the company’s CV1 campervan. Plus, it already has $3.7 million in sales.” How popular are campervans with millennials? Thor Industries (NYSE:THO), the largest manufacturer of motorhomes and trailers in the U.S., has big plans for this segment of the RV market.   “We see growing potential for [the camper van] product category in North America,” Thor Industries CEO Bob Martin said in April. “Last year, the camper community there grew by 1.4 million households — 56 percent of which are millennials. These new participants are often returning to the roots of campervanning and prefer a lifestyle that involves less effort while offering more adventure and experiential quality.”   Read more here. Equity Crowdfunding Site: StartEngine Amount Raised: $7.12mm of $11.75mm goal   Founded in 2013, Knightscope is the developer of fully autonomous security robots or bots. The company’s mission is “to make the United States of America the safest country in the world.” But is Knightscope a business you can invest in?   The company is actually raising capital through an online crowdfunding platform, called StartEngine. The goal is to raise $50 million.   Note that Knightscope has already raised $46.6 million from prior rounds of financing, such as from family offices and retail investors. So let’s get a backgrounder on the company and its prospects.   Read more here.

Hunting for the next Amazon (NASDAQ:AMZN) doesn’t necessarily mean you’re searching for the next big consumer tech explosion. “The next Amazon” largely means finding the next high-growth stock of the future. And the earlier you invest in these companies, the bigger the gains. Few options can beat privately traded firms in this regard, but private investing has historically held a high barrier to entry.       Does your net worth exceed $1 million (not including your primary residence)? Do you make more than $200,000 per year ($300,000 if you file taxes jointly with your spouse)? If you do, congratulations! You’re an accredited investor and can invest in private businesses.   If not, don’t fret. You can still invest in privately traded companies through equity crowdfunding … but, boy, if there were ever an area of the market that felt as if it were pioneered by the likes of Saul Goodman, it’s regulation crowdfunding.   That’s because regulation crowdfunding stipulates that firms raise no more than $1.07 million … per year. This severely hampers the quality of offerings, as few startups worth investing in need such small amounts of cash. Regulation A+ offerings, though, can raise substantially more. So when looking through offerings, I stuck to swiping through companies in the latter category … and I stumbled on an anomaly in TerraCycle.   Now I’m sure many of you have heard of this company in passing before, but what caught my eye was the amount it’s raised ($12 million) and the revenue it already brings in ($20 million in 2018).   By the end of its funding round, TerraCycle hopes to raise $25 million. Just what is this company that I’ve never heard of and how is it that it’s already profitable. And why does it continue to attract so much cash from everyday people?  

What Is TerraCyle?

  TerraCycle’s main concept is “recycle everything.” With that, you can tell it’s not your ordinary recycling business. TerraCycle springboards off of the sustainability trend, making #RecycleEverything a creed to live by, and not simply a corporate motto.   The firm wants to eliminate the idea of waste, which it does by recycling things that were previously un-recyclable. It can recycle waste such as your red wine-stained corks, crooked cigarette butts, dirty diapers and even your acid-leaking batteries.   By this measure alone, TerraCyle’s claim is a godsend if it actually does what it says.   Per-capita solid waste generation has grown tremendously in the decades since 1960, until it trended sideways nearing the early aughts. In the 1960s, the average individual produced 2.68 pounds of waste per day. But by the 1990s, a person could expect to create 4.57 pounds of trash each day.     Household waste consists of (typically) paper and other paper-made materials, such as packaging (think of all those Amazon packages you discard each week). Sure, paper is recyclable, but tell that to the landfills that play host to 17.6 million tons of paper in a year. With that kind of waste, it’s no surprise the global waste management market is expected to increase 60% by 2025.   Its mission to erase waste and transform previously land-filled goods into new materials is a value proposition both consumers and corporations can get behind. But TerraCycle still has to do the legwork of winning over consumers with its promise of sustainability.  

What Does TerraCycle Do?

  TerraCycle works by offering free recycling programs across the globe and in partnership with many large companies. Some of its partner brands include Arm & Hammer, Barilla, Bausch + Lomb, Brita, Colgate and Hasbro (NASDAQ:HAS). Here’s how it works:   Customers simply search for a recycling program that match their lifestyle, and those of their community members, and sign up. Say you sign up for its Brita recycling program (free of charge). You can start collecting Brita filters, pitchers, bottles and more in your home, school or office. Some brands even provide reward points for participating.   Once you’ve collected at least 5 pounds (the amount necessary to keep down greenhouse gas emissions), you ship your package to TerraCycle. The company then separates the products by composition and makes new recycled products out of them.   TerraCycle’s unique methods yield some fantastic results. Through upcycling, the company has sewn juice pouches together to create book bags. It’s even able to make casual shoes out of used chip bags. When it comes to good ol’ fashioned recycling, the company claims to recycle more than 97% of the waste that comes through its doors. Through programs like its cigarette waste program, TerraCycle is able to collect tobacco from used cigarettes for future composting.   Further, the company’s Zero Waste Box platform skips the landfill and the incinerator to free communities of their single-use lifestyles. Through this program, participants can recycle pretty much anything with TerraCycle’s highly specific Waste Boxes. These are great for businesses, who can even house their Zero Waste platform inside a “permanent collection unit” right on their property.   It’s hard to believe this company started by selling a sustainable fertilizer made from worm poop.  

TerraCycle Loop

  Loop is the part of TerraCycle’s business that excites me the most. With Loop, consumers pay a small, refundable deposit for a Loop tote. This tote is chock-full of whatever brands’ items the consumer chooses, featuring things like Tide laundry detergent, Pantene shampoos, Gillette razors, Febreze and more, all made from sustainable materials.   Once you’ve finished using your items, simply leave the tote outside your door and schedule a free pickup. TerraCycle will clean, refill and return your desired products back to you in the same Loop tote. Talk about service.   The big challenge TerraCycle’s Loop faces is in getting people to buy into its vision for a sustainable future. Single-use materials are ingrained in society, and the worldwide history of plastic production and use shows the trend.   In the 1950s, plastic production worldwide was just 2 billion metric tons. By 2017, it soared 315% to 8.3 billion metric tons. And by 2050, it’s projected to hit 34 billion metric tons.   The amount of plastic waste, however, will fall out of step with production as wasted plastics are projected to rise from 6.3 billion metric tons in 2015 to 12 billion metric tons in 2050. The ratio of produced plastics to wasted plastics being far, far less in 2050 than presently.   But does this mean TerraCycle is a good investment?  

Is TerraCycle ‘The Next Amazon’?

  The world is changing its tune on climate risks, which portends good things for TerraCycle’s stock offering on StartEngine. A 2019 study found that 19% of respondents are “passionately” attempting to limit their use of one-time plastics and convince others. Another 32% are actively changing their daily plastic habits. Only 16% are unsure of, or don’t care about, single-use plastics.   While climate risk awareness isn’t growing at the pace most would like, it is growing. The 2020 election will be a huge determiner of whether that growth picks up in a meaningful way or stalls. President Donald Trump’s perspective on climate change is non-existent, but a President Bernie Sanders would do wonders for institutional policies on climate change.   Still, it’s not unusual to see other sustainability-first companies rocket into the headlines. Take Beyond Meat (NASDAQ:BYND) and its plant-based meat. BYND shares have popped some 50% in the past year, and that’s in spite of a steep drop from the late-July high.   Consumers are making it known that they want their companies to be more climate-minded, and now even investors aren’t afraid to vote with their wallets. In our InvestorPlace Q&A, Legal & General’s chief executive Nigel Wilson talked about L&G’s Climate Impact Pledge. This initiative aims to set more companies on a sustainable path by divesting from stocks whose leaders have not met L&G’s base guidelines for sustainability. Even companies like McDonald’s (NYSE:MCD) and Starbucks (NASDAQ:SBUX) have made climate-friendly bids to rid their restaurants of plastic straws and cups.   For TerraCycle to become the next great stock to invest in, it has to become the sustainable waste management company. Right now, it certainly has no peer.   John Kilhefner is the managing editor of InvestorPlace.com. As of this writing, Kilhefner did not hold a position in any of the aforementioned companies. If you have questions about the site or suggestions about our content, email us at editor@investorplace.com. Want to pitch us an article? Send your ideas and tips to investorplacestories@gmail.com, and if we like it, you’ll hear back from us!  

If you want to feel like Kevin O’Leary and the gang from Shark Tank, you no longer have to be an accredited investor thanks to equity crowdfunding.   Source: Shutterstock   Today, anyone can seed startup ventures in hyper-growth industries and build a portfolio of privately traded companies. But just because you can invest in a private business doesn’t mean you ought to.   Before you put your money on the line, make sure you’re aware of what equity crowdfunding is, what types of offerings are available and, most importantly, what amount of risk you are willing to accept.  

Equity Crowdfunding Types

  Crowdfunding, as it’s known, began with the Jumpstart Our Business Startups (JOBS) Act. President Barrack Obama’s legislation allows startups to raise money through two key regulations: Regulation crowdfunding and Regulation A+.   The differences between the two are stark. So they can be overwhelming for investors just warming up to the notion of investing via the crowd.   Because of these key fundamental differences, there are numerous implications to you as an investor. These differences also matter to the entrepreneurs looking to raise money. That’s why the lineup of companies on Regulation A+ markets is different from the companies raising money through regulation crowdfunding.   What they have in common, however, is that both are classified within equity crowdfunding, which means:  

1. Anyone (meeting certain demographic requirements) can invest in their offerings.
2. Investments are backed through the sale of securities (equity, debt, revenue share and convertible notes), rather than perks a la Kickstarter.
3. Terms of the raise are set by the entrepreneurs.
4.  Reasonable expectation of liquidity. Crowd investors can sell their shares through crowdfunding “portals” at any time they please.

  InvestorPlace markets analyst Luke Lango already discussed the fundamental shortcomings of regulation crowdfunding, so let’s talk about Regulation A+. Specifically, let’s examine what it is, what it means for you and if you should invest in these offerings.  

What Is Regulation A+?

  Regulation A+, or “Reg A+,” differs from regulation crowdfunding in a number of ways. These include how much money can be raised through equity crowdfunding, state-by-state provisions, the amount of Securities and Exchange Commission coordination required before the offering and the visibility into company financials.   For entrepreneurs looking to test the waters of a capital raise, a regulation crowdfunding offering may be their best bet. Regulation crowdfunding offerings max out at $1.07 million per year. That’s hardly ideal for the next Amazon (NASDAQ:AMZN) or Google (NASDAQ:GOOG, NASDAQ:GOOGL). But it can work for firms that need to gauge the market’s appetite for investment.   Businesses that go through Reg A+ are able to raise up to $50 million per year. While that figure is far from mind-boggling, it’s not inconsequential. A $50 million raise, depending on the valuation multiple, puts these businesses in roughly micro- to small-cap territory. The idea is that Reg A+ offerings attract capital from accredited investors and brand loyalists.   Now, I said “up to $50 million” because the amount of money raised through Reg A+ depends on the tier. Tier I offerings max out at $20 million per year and “blue sky” laws bind them. For example, a private company raising money via Tier I must comply with each individual state’s (and territory’s) laws. This not only slows down transaction speeds, but it’s wildly expensive and generally too expansive for most companies to consider.   Reg A+ Tier II offerings, however, have no such restrictions. Instead they are bound by a “coordinated review” process conducted by states, which is far less restrictive. Tier II offerings also max individuals out at 10% of their net income or 10% of their net worth (whichever is greater).  

The ‘Mini IPO’

  Unlike regulation crowdfunding, Reg A+ can function as an initial public offering (IPO), or a “mini IPO.”   To this end, the SEC steps in to audit company financials and approve the offering. The costs are smaller than traditional IPOs, however, and the ongoing reporting is less burdensome for the company.   Like IPOs, Reg A+ offerings are mainly liquidity events. But early investors do not experience lock-up expiration periods. While the possibility of secondary markets exists (since Reg A+ crowdfunded securities are freely transferable), there aren’t many avenues for trading to occur yet. That means much of the liquidity premium is future-based.   To take advantage of this, crowd investors need access to what are essentially “venture exchanges.” But companies able to stomach more intrusive financial reporting (and higher costs) can list their Reg A+ offerings on national stock market exchanges or over-the-counter (OTC) markets. Where equity crowd investing really could shine, though, is in democratizing the startup/scaleup investing process.   If you wanted to buy into Uber (NYSE:UBER), you had to wait until it went public. By that time, everyday investors were too late. Institutional investors, insiders and venture capitalists long made all of the early gains to make. Crowdfunding (especially the higher-capped Reg A+) provides everyday investors the ability to vote on businesses, technologies and industries they believe in.   Like Kickstarter and Indiegogo, Reg A+ crowd investors are fans who believe in the vision of the entrepreneur. But unlike perk-based crowdfunding sites, Reg A+ offerings provide real, transferable equity in a company. You’re not just funding a company to secure a place in their consumer line.  

Startups to Invest In

  One entrepreneur has staked his reputation on the success of equity crowdfunding through Reg A+ offerings. His name is Howard Marks, co-founder of Activision (NASDAQ:ATVI) and the former founder/CEO of Acclaim Games. Marks is now involved in a new venture — StartEngine — whose future is dependent on the viability of equity crowdfunding.   Marks’ equity crowdfunding platform bills itself as a portal for everyday investors and accredited investors alike to learn about new capital raise opportunities and to invest in their offerings. To date, StartEngine has hosted 300-plus offerings on its site, which have raised more than $100 million from the 200,000-plus users on its platform. On average, users typically invest a minimum of $500.   On the site investors find companies such as TerraCycle, an already successful business with more than $20 million in annual sales and blue-chip clients in Walmart (NYSE:WMT) and Amazon. In the same breath, you may stumble upon offerings like that of Knightscope — a crime-fighting fully autonomous security robotics company.   StartEngine’s own Reg A+ offering is worth looking at as a lens into crowdfunding at large. As of this writing, StartEngine’s current Reg A+ offering has raised $6.66 million from 5,685 investors, approaching its raise cap of $9 million. The funding round values the company at $119 million with a $7.50 per-share price.   However, while it’s a reasonable lens to look through, the success of StartEngine’s offering doesn’t necessarily translate to the success of the Reg A+ equity crowdfunding market.  

Marketing the Company Vision

  Before crowdfunding, entrepreneurs who sought investment could only pitch venture capitalists. Today they can involve their marketing and communications department in their offerings. StartEngine has the benefit of being able to feature its offering in the prime real estate of its homepage (or any other pages on its site that generate traffic).   This means that the difference between a successful capital raise from equity crowd investors hinges on the ability of the company to be able to not only sell everyday investors on their idea, but to reach them.   The best example of this is High Times, which has launched an intensive marketing campaign to reach potential investors. Right now, you can invest in High Times for a minimum of $99, which nets you nine shares in the company ($11 per share). As of this writing, more than 23,000 people have invested in the company and High Times has been cleared to list on public markets (under ticker symbol “HITM”) after its Reg A+ offering.   But successfully marketing to brand enthusiasts is one thing, and making good on the promises of a return on investment is another. Associate Professor of Management and Entrepreneurship, Brent Goldfarb, at the University of Maryland’s Robert H. Smith School of Business, has his own reservations about the sorts of companies found on equity crowdfunding sites:   “Crowdfunded companies are very high risk, and, as is the case with most entrepreneurial ventures, are more likely than not to fail. Hence, as such, companies in aggregate should only comprise a small percentage of their investments. This thinking sits behind the SEC’s crowdfunding rules, as well as the rules that determine which investors qualify as accredited. In general, investors who invest broadly in the public markets by buying index-based securities will outperform investors who invest in startups, including crowdfunded startups. Admittedly, investing in startups on crowdfunding platforms or otherwise is more fun.”   High Times is a very troubled company whose road to profitability is unclear. The company is in debt up to its eyeballs (with a $105.2 million deficit blotching its balance sheet), and most professional and accredited investors wouldn’t touch it. So High Times tapped into the thousands of cannabis enthusiasts and brand loyalists whose knowledge of valuation and future cash flows is limited.  

Bottom Line on Reg A+ Offerings

  Equity crowdfunding has a lot of potential. Plenty of companies like StartEngine and MicroVentures are contributing to the democratization of private investing. Its viability as a platform for serious investors is still unknown, though.   William Cong, Associate Professor of Finance at Cornell’s Johnson Graduate School of Management, spoke to me about equity crowdfunding, saying “individuals typically do not have the skill/ability to pick the right funds to invest in or to pick the right projects to invest in.” Cong expands on this by saying that “individuals in aggregate can provide useful information to an entrepreneur or firm executives, and can provide effective monitoring. The key is to have the infrastructure to coordinate the individual investors. Crowdfunding mechanisms such as Kickstarter or Lending Club or ICOs are such examples.”   For less-experienced investors, it’s hard to tell the difference between a TerraCycle and a Knightscope. The users who are currently looking for the next Amazon will need strong guidance, as they currently mostly have the marketing arm of the companies behind the offering to sell them on the future of the business.   It’s worth keeping an eye on the development of equity crowdfunding, especially Reg A+ offerings, over the next few years. And there are interesting things happening in the world of real estate crowdfunding. As crowdfunding evolves, it could prove to be a legitimate means of raising capital … or it could turn out to be a playground of marketers looking for a quick cash-grab from loyalists. Time will tell.   John Kilhefner is the managing editor of InvestorPlace.com. As of this writing, Kilhefner did not hold a position in any of the aforementioned companies. If you have questions about the site or suggestions about our content, email us at editor@investorplace.com.