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Defying the Odds with MERJ, StartEngine, and LiquidPiston

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Defying the Odds

While the world struggles to adapt and persevere, through the on-going COVID-19 pandemic, there are a select few companies that have managed to continue down a path towards success.

Instead of focusing on the trials and tribulations, being felt by COVID-19, we will take a brief look at a few of these companies, which find themselves thriving during difficult times.

 

MERJ

First up is MERJ Exchange.  This Seychelles based exchange has established themselves as a leader in the burgeoning digital securities sector.  Not only do they support a variety of digital securities on their platform, they do so in a regulated manner.

Their potential is underscored through just a quick glance at their recent growth.  The company notes that while most of the world’s stock exchanges saw a 7% decline in capitalization over the past year, they were able to achieve growth of 325%.

MERJ CEO, Edmond Tuohy, recently took the time to comment on their recently seen growth, stating, “This tremendous growth we’re seeing is a reflection of the rapid pace at which financial markets are shifting towards more efficient structures…MERJ is disrupting the traditional stock exchange model, breaking down cross border barriers and streamlining processes, ultimately reducing costs for, both, investors and listed companies”

As a regulated exchange which hosts both, traditional and digital, securities, MERJ appears to be well positioned to succeed in, both, the now and future.

LiquidPiston

This Bloomfield, Connecticut, based company has recently completed, what is being touted as, one of the quickest Reg. CF raises, to date.

The technology on offer, by LiquidPiston, is built on the idea that rotary engines hold untapped potential in the ICE market.  Where past examples, such as the commonly used Wankel design, failed, LiquidPiston looks to succeed.  Their efforts have resulted in engines boasting,

  • Scalable power bands
  • Compact designs
  • Hybrid vehicle integration
  • 30% jump in efficiency over gas & diesel

Hosted through StartEngine, the LiquidPiston crowdfunding campaign was able to entice over 3000 investors into taking part in a mere 9 hours.  The result?

  • $51.6 million valuation
  • $1.07 million raised

With promising applications in, both, the military and aerospace sectors, next-gen rotary engines designed by LiquidPiston have a bright future.  The company notes that they intend on maximizing the potential of their technology through efforts which include licencing agreements.

In a time where VC has dried up, as noted by many, LiquidPiston’s ability to not only achieve their goal, but in record time, is an impressive feat.

StartEngine

Of late, crowdfunding platforms have really pushed the narrative that they are the gatekeepers to funding during times such as these.  With the aforementioned LiquidPiston raise, they appear to be on to something.

StartEngine CEO, Howard Marks, states,

“I’m thrilled that Liquid Piston’s raise was successful. In fact, Liquid Piston’s raise is the fastest Reg CF campaign of all time on our platform…StartEngine’s mission is to help entrepreneurs achieve their dreams, and I hope that Liquid Piston is able to use the $1.07M they raised and their thousands of new investors to achieve theirs.”

Further cementing this narrative is the recent announcement that Kevin O’Leary, aka Mr. Wonderful, has become a crowdfunding convert;  So much so that he has now become not only an investor in StartEngine, but an active team member.

Mr. Wonderful Aligns Efforts with Equity Crowdfunding Platform ‘StartEngine’

Alternative Offerings

While the companies listed here today wildly vary in what they have to offer, there is a common trait amongst them – an alternative to the norm, and a forward looking perspective.

MERJ has decided that digital securities will hold a prominent place in the future of investing.  They have taken this stance and built a promising platform around supporting them.

StartEngine has decided that – especially during turbulent times – SMEs can most benefit from capital generated through crowdfunding;  Rather than the more traditional ‘VC’ route.

LiquidPiston has decided that there is, indeed, a place for internal combustion engines moving forward.  The key to making this work? Perfecting what was once heralded as a radical, and promising, design (rotary engines).

By breaking free of the mold, these companies have managed to, both, intrigue and entice investors into paving the way towards continued success.

In Other News

While the companies discussed here may be thriving, there remain a plethora of issues which have arisen during the pandemic.  The following article takes a look at a few of the issues which have caught our eye during this time.

The COVID-19 Effect

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Joshua Stoner is a multi-faceted working professional. He has a great interest in the revolutionary 'blockchain' technology. In addition to this, he is a licenced Paramedic in Nova Scotia, Canada. As such, he can provide emergency care/medicine to any situation necessitating it.

Crowdfunding

SeedInvest Tackles Economic Inequality with ‘BlackCapital’

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Popular crowdfunding platform, SeedInvest, has announced the launch of a new initiative called ‘BlackCapital’.

BlackCapital’s goal is to facilitate economic equality among black communities across the United States.  It was launched in collaboration with Kevin Johnson – a former NBA All-Star, and Mayor of Sacramento.

The Details

Tackling economic inequality is no small feat.  Recognizing this, SeedInvest has taken a structured approach towards its goal.

In order to positively affect the greatest number of people, SeedInvest’s BlackCapital has been structured as a two-pronged system; each of which will provide participants with access to fully-vetted, high potential start-ups.  Investors can choose to invest in companies that are lead by black founders.  At the time of writing, SeedInvest has three companies with black founders that are fundraising.

1. Black Capital Access

With an investment minimum of $1000, this program allows investors of any ilk the ability to create a portfolio comprised of up to 25 different start-ups raising capital through SeedInvest.

2. Black Capital Fund

With an investment minimum of $50,000, this program is geared specifically towards accredited investors. Much like BlackCapital Access, this fund will provide its participants with access to many vetted investment opportunities, along with access to a bevy of features within the SeedInvest platform.

SeedInvest notes that, until now, early-stage venture capitalism has only been accessible by roughly 2% of the population.  Furthermore, this form of investing has been heartily outperforming the S&P 500 over the past two decades.  By creating and promoting BlackCapital Access/Fund, with the help of Kevin Johnson, SeedInvest is hoping to increase that 2% as much as possible.

It should be interesting to see how SeedInvest continues to develop BlackCapital and if the BlackCapital initiative does in fact benefit the black community.

Marginalized Populations

Given that we are currently midway through 2020, it is sad to say that many marginalized communities throughout the world still exist.  Currently, in North America, black communities are in the spotlight due to a myriad of issues.  SeedInvest has taken note, and it is beginning work to contribute towards forward progress.

At the Helm

While SeedInvest may be facilitating BlackCapital, the project’s creation was made possible through collaboration with Kevin Johnson.  If this name sounds familiar, his past accomplishments may explain why.

  • 3x NBA All-Star with the Sacramento Kings
  • Mayor of Sacramento from 2008-2016
  • CEO of Seven Ventures

Throughout his career, Kevin Johnson has experienced great success in many of his endeavours.  For instance, along the way he has become known for developing programs which help marginalized communities gain access to better educational and economic opportunities.  With this being the case, his participation in an initiative such as BlackCapital, is no surprise.

While BlackCapital is very new, we hope to see continued growth in supporting the black community by empowering black founders and black investors.  We also hope to see continued growth in supporting other marginalized members of the community.

Crowdfunding

Since the ‘Jumpstart Our Business Act‘ was passed in 2012, crowdfunding has been steadily increasing in popularity.  This popularity has led to the rise of various companies like SeedInvest, as they look to establish themselves as market leaders.  Investing through such means can provide savvy investors with fantastic opportunities, by gaining access to companies at an early stage.

While the potential for great returns is there, it is vital to note that early stage investing is a high-risk endeavour.  SeedInvest echoes this sentiment, by stating, “Only those prepared for extreme volatility, a lack of liquidity, and the risk of losing their entire investment should invest in early-stage startup investments.”

SeedInvest

Founded in 2011, SeedInvest is a crowdfunding platform, based out of New York, New York.  Through their platform, SeedInvest provides investors access to pre-vetted opportunities from promising startups.

CEO, Ryan Feit, currently oversees company operations.

In Other News

Since COVID-19 began wreaking havoc on the world as we know it, various crowdfunding platforms have noted an increase in investor activity – with SeedInvest being among these.

Accordingly, we took a brief look at these events, and how they led to a record setting quarter by SeedInvest.  To learn more, click HERE.

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Crowdfunding

SeedInvest Gaining Momentum

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SeedInvest Gaining Momentum

COVID-19 has made life difficult for many.  There are those however, that have made the best of a bad situation.  A prime example of this is the recent resurgence of crowdfunding platform, SeedInvest.

In a recently shared update, SeedInvest elaborated on a notable uptick in platform participation throughout 2020.

Moving Forward

Best quarter on company record? Check.  Investment volumes reaching new highs? Check.  Massive investor signup, dwarfing multiple previous years combined? Check.

With people adjusting to the new world, it is clear that they are recognizing the benefits and efficiency afforded through crowdfunding.  April, alone, saw roughly 25,000 new investor signups on the SeedInvest platform.

Commentary

In their post, SeedInvest CEO, Ryan Feit, elaborated on how their platform differs from traditional means of raising capital.

“Unlike venture capital firms, online fundraising platforms are perfectly situated to help startups in the current, post-COVID-19 world we are in. Online fundraising platforms are not dependent on capital from a handful of pensions and endowments, but rather a large, diverse network of investors (SeedInvest has had over 350,000 investors register for example).”

He continued,

“…while the traditional venture capital investment process is highly dependent on in-person meetings (which is next to impossible in the current environment), the online fundraising and investing process is inherently digitally native. Furthermore, there are a number of pending improvements to U.S. securities laws (the most significant changes since the JOBS Act was signed into law), which will turbocharge online fundraising for entrepreneurs and investors alike.”

Widespread

SeedInvest is not the only platform to see a recent boost in usage.  Rival crowdfunding platform, StartEngine, has seen a similar uptick.

While this positive turn may be due, mainly, to venture capitalism drying up, due to the ongoing pandemic, there is no doubt that the SEC has also played a role.

While the SEC is often viewed as a regulatory body that simply punishes those breaking the rules, they also have a direct hand in crafting friendly environments for growth.  Recognizing the potential harm of COVID, they recently relaxed regulations surrounding crowdfunding.  The following are a few examples of this:

  • Financial statement exemptions
  • Broader eligibility
  • Easier ‘early closing’

SEC to Give Crowdfunding a Boost through Relaxed Regulations

Boding well

While no official announcements have been made, it has long been suspected that SeedInvest owner, Circle, intends to sell the crowdfunding platform.

Reports of a possible sale surfaced after Circle began streamlining their operation in 2019.  Their efforts saw the sale of popular exchange, Poloniex, as well as the departure of multiple ‘C-level’ employees.

With the recent growth seen at SeedInvest, Circle has every reason to be happy.  Either they keep SeedInvest under their umbrella, and benefit from their successes, or they sell the platform, and benefit from an increased market value.

Circle Ponders SeedInvest Sale while Doubling Down on Stablecoin

SeedInvest

Founded in 2011, SeedInvest is a crowdfunding platform, which operates out of New York.  Above all, SeedInvest acts as a bridging platform, connecting vetted investment opportunities with eligible investors.

CEO, Ryan Feit, currently oversees company operations.

In Others News

For those interested in learning more about what Crowdfunding is, and how it can transform the way we invest, make sure to peruse the following article.

What is Equity Crowdfunding?

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Interviews

Andrew Adcock, CEO of Crowd for Angels – Interview Series

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Andrew Adcock, CEO of Crowd for Angels - Interview Series

Andrew is the Chief Executive Officer at Crowd for Angels an equity crowdfunding platform. He often attends and speaks at events on Crowdfunding, Alternative Finance and Investment. Previously, he worked at NinetyTen, a web application developer and provider of Private Social Networks, whose clients included Nokia, Channel 4 and Shop Direct

You were one of the original Co-Founders of Crowd for Angels. Can you discuss the inspiration behind launching this business?

I was indeed one of the Founding team at Crowd for Angels, but the inspiration for launching the company comes from our Director Tony de Nazareth, who combined his decades of financial knowledge with the ‘social media’ approach. This was to get the community involved when funding and supporting a business, thereby creating brand advocates that not only financially supported the aspirations of a company but also became a voice and customer of the company.

How much do you involve yourself in the pitch decks and packaging the deals that are found on Crowd for Angels?

I am involved in most companies that seek to list on Crowd for Angels. I take a genuine fascination in the lives of start-ups and companies looking to expand. Each has its own story and passion, which I am enthused by. Having raised funds for my own company and invested in many others, I hope to provide insight for the company.

What type of due diligence is performed on the companies that are listed?

A lot! Crowd for Angels breaks due diligence down into 3 key areas, firstly, we conduct factual checks such as KYC, AML, PEP, Credit Checks on the directors, reviewing accounts produced by the company and verifying facts stated on their pitch. Secondly, we conduct market checks, for instance, is the product available and as described, is there an addressable market, is the valuation reasonable, what legal challenges the company might face and is it ethical. The final check is one of sanity, which is not only tested by Crowd for Angels, but also by our Angels, who will ask the company their own questions.

What are some of the main reasons behind companies being turned down for listing on the platform?

There can be a number of reasons but a few we find most common are as follows:

  • The valuation is simply too high in comparison to the companies position
  • The company does not provide documentation (business plan, management accounts, incorporation documents)
  • The product is too early-stage or not yet developed
  • The directors have no ‘Skin in the Game’

What are the biggest benefits of equity crowdfunding?

I personally believe the biggest benefit is the ability to create brand advocates, people who support your business financially and become active customers, drawing in others to check out your brand, whether that is through word of mouth or social media.

Could you give us a success story of a company that raised funds on the Crowd for Angels platform?

One of my favourites is a company called CNPPS. A young entrepreneur, who was studying engineering at university at the time had created a permeable pavement solution that used recycled aggregate. Now that might not sound as fascinating as an app, but our world is covered in roads and pavements. His solution, used 100% recycled aggregate and was carbon negative, furthermore, it allowed water to pass through. Working with the entrepreneur we were able to raise £100,000 for a phase of testing that has now led on to a commercial contract and further funding for the company.

What made it interesting was the ethical approach the company had took to change an old industry, the tenacity the entrepreneur showed never giving up and that a business can truly be grown from the ground up, out of university none-the-less. So far in a 2 year period, the company’s valuation has increased 4 fold, delivering a solid return for the Angels involved.

Crowd for Angels is one of the few crowdfunding platforms that accept bitcoin. How many investors use bitcoin, and where do most of these investors originate from?

Yes, we have been accepting cryptocurrency as a form of payment for investment since early 2016. At that time, we integrated this payment option to allow foreign investors to invest in UK companies without the costs and time associated with international bank transfers. Initially, we saw a number of Australians, Chinese and mainly Asian investors utilise this form of payment. However, as bitcoin and other cryptocurrencies gained in popularity, we did see growth in European investors utilising cryptocurrency. Partly this is due to the gains they might have experienced and I believe the convenience cryptos offered. Now, we have over 14,000 members registered with a cryptocurrency wallet on our platform, with many of them in Europe.

A few years ago, the ANGEL token was released. What are the use cases for this token?

The ANGEL token was released to drive down the user acquisition cost of investors whilst rewarding stakeholders for interacting with our platform. It is hoped that when users interact and share content in the network, say an investment they had just made in a fledgeling company, that they would be rewarded with ANGEL. Crowd for Angels has then committed to buy back and burn ANGEL linked to the revenue generated from our pitches, thus creating a virtuous circle. We hope in the future, our Angels will also be able to use the ANGEL token as a method of payment towards an investment.

How do you see digital assets and digital securities eventually merging with crowdfunding?

Crowdfunding utilises technology to allow the masses to invest small amounts into pitches, but the shares are usually held with a nominee and should you wish to sell them or give them to someone else, it is difficult. Therefore, the integration of digitalised assets should be a no brainer, because it potentially gives the control of the asset back to the investor and follows a set of rules, that can’t be broken. In a utopian world, you would allow investors to purchase, hold and trade any assets that they wish. With the blockchain, you benefit from an immutable ledger that would record these transactions, giving you efficiency and transparency. I believe we are only a stones throw away from some big changes.

Is there anything else that you would like to share about Crowd for Angels?

We are always open to ideas, a conversation can go a long way.

Thank you for the interview. Readers who wish to learn more may visit our Crowd for Angels business listing or the Crowd for Angels website.

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