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What's Market: Federal Crowdfunding Offerings
Practical Law Article w-002-5319 (Approx. 26 pages)
What's Market: Federal Crowdfunding Offerings
by Practical Law Corporate & Securities
| Law stated as of 16 Sep 2016 • USA (National/Federal) |
This Article reviews all Form C filings for the 60 crowdfunding offerings under Section 4(a)(6) of the Securities Act launched within the first two months of Regulation Crowdfunding becoming effective on May 16, 2016. This resource provides links to, and includes certain summary information about, each Form C filing, including a brief business overview, target offering amount, selected offering details, intermediary information and financial and other information about the issuer. This resource also provides highlights and market trend analysis on the crowdfunding offerings launched during the two-month period.
Crowdfunding involves the use of the internet to raise capital, typically from a large number of people and in relatively small amounts. Crowdfunding enables early-stage startup businesses that may not have easy access to traditional methods of capital markets and venture capital fundraising to raise capital. Raising capital for a business from investors with a financial interest in the success of the business brings crowdfunding under the jurisdiction of federal and state securities laws.
The stated purpose of the Jumpstart Our Business Startups Act of 2012 (JOBS Act), signed into law on April 5, 2012, was to expand and ease methods of capital raising by, and relax the regulatory burden on, smaller companies. Title III of the JOBS Act introduced a new registration exemption under Section 4 of the Securities Act for crowdfunding, allowing issuers to sell unregistered securities to the general public under certain circumstances. Regulation Crowdfunding, the SEC's final rules and forms implementing Title III crowdfunding, became effective on May 16, 2016.
This Article provides highlights and market trend analysis on the federal crowdfunding offerings that launched during the two months following the effectiveness of Regulation Crowdfunding (see Federal Crowdfunding Highlights and Market Trends). It also includes a Form C filing tracker listing all 60 offerings launched during this period (see Form C Filing Tracker). For each offering, the tracker includes a link to the issuer's filings, a brief business overview, the target offering amount, selected offering details, intermediary information, and selected financial and other information about the issuer.
In this Article, the terms "crowdfunding" and "crowdfunding offering" are used solely to refer to securities offerings made in reliance on Section 4(a)(6) of the Securities Act and the rules and forms adopted by the SEC.
To learn more about Title III of the JOBS Act and conducting crowdfunding offerings, see Practice Note, Crowdfunding Offerings Under Section 4(a)(6). For information on the regulation of crowdfunding intermediaries (including funding portals and brokers) see, Practice Note, Crowdfunding Intermediaries: Funding Portals and Brokers. For a complete listing of resources on different types of crowdfunding, see the Startup Crowdfunding Toolkit.
Federal Crowdfunding Highlights and Market Trends
The following highlights and market trends are based on data collected from Form C filings made during the first two months following the effectiveness of Regulation Crowdfunding (see Form C Filing Tracker).
Crowdfunding Issuers
The companies that have launched crowdfunding offerings vary across multiple dimensions. They represent several types of business entities and many different states. Some have been operating for years and are looking for capital to expand operations, while others have yet to hire a single employee or earn a dollar of revenue. They also represent a variety of industries, with noteworthy overrepresentation from certain sectors (such as the alcoholic beverage industry). The following discussion provides some additional color on the characteristics of crowdfunding issuers.
Entities and Jurisdictions
The crowdfunding issuers were formed as C-corporations, limited liability companies (LLCs), and benefit corporations in 22 different states. The top five jurisdictions of formation for crowdfunding issuers are:
- Delaware.
- California.
- Texas.
- Colorado.
- Ohio.
(See Figure A.)
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Years in Existence
Many of the companies seeking to raise capital through crowdfunding were newly formed. Nearly one-third of the 60 companies that launched crowdfunding offerings were formed in 2016 and the majority were formed within the last two years. The oldest company to undertake an offering was formed 13 years ago in 2003. The average crowdfunding issuer was formed three years ago in 2013, and the median company was formed just last year in 2015. Figure B provides a breakdown of the number of crowdfunding issuers formed in each year from 2003 to 2016.
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Number of Employees
Out of 60 crowdfunding issuers, only two companies had more than ten employees at the time they launched their offerings. The median number of employees for crowdfunding issuers was three, with 28% of issuers reporting having one or no employees. The largest crowdfunding issuer as measured by number of employees reported having 28 employees (though that issuer was an outlier, with the next largest reporting only 12 employees). Figure C provides a breakdown of crowdfunding issuers by number of employees.
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Industries
Crowdfunding issuers operate in a variety of industries. Nearly half of the 60 companies represent traditional technology sectors, such as internet and mobile applications, enterprise software, educational technology, and biotechnology. Almost one-third of the 60 companies are developing and selling consumer products. There were a surprisingly high number of alcoholic beverage companies that turned to crowdfunding to raise capital (8 companies out of 60, or 13.3%). Figure D depicts crowdfunding issuers by industry.
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Annual Revenue
Almost two-thirds of the 60 companies reported earning no revenue in their most recent fiscal year. Considering that more than half of the companies were only formed in 2015 or 2016 (see Years in Existence), it may not be surprising for so many prospective crowdfunding issuers to be pre-revenue. Nine companies reported annual revenues exceeding $500,000. Figure E illustrates the annual revenues reported by crowdfunding issuers for their most recent fiscal year.
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Funding Portals
When Regulation Crowdfunding went into effect on May 16, 2016, the SEC and FINRA had approved seven funding portals to host crowdfunding offerings. Within the first two months of Regulation Crowdfunding's effectiveness, that number grew to 12 funding portals that actively hosted offerings on their internet platforms.
Number of Deals
From May 16, 2016 to July 16, 2016, crowdfunding issuers launched 60 offerings. Figure F provides a breakdown of the number of these offerings hosted by each active funding portal during the applicable period.
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As of September 15, 2016, only 11 crowdfunding issuers had filed on Form C-U to indicate that they had successfully closed their crowdfunding offerings under Section 4(a)(6).
Commissions
Funding portals charged commissions generally ranging between 3% and 10%. Some funding portals' commissions varied based on the target offering amount or the level of assistance and support required. Other portals' fees appeared to be individually negotiated with each issuer (leading some issuers raising the same amounts through the same portal to pay different commissions). Figure G shows the commissions charged by each active funding portal.
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The data on the commissions that the funding portals charge issuers using their platforms may shed some light on the deal flow figures (see Number of Deals). For example, WeFunder, the most inexpensive funding portal (charging only 3% of funds raised), hosted almost half of all crowdfunding offerings that were launched in the first two months following effectiveness of Regulation Crowdfunding. This seems to imply that crowdfunding issuers are exhibiting significant cost-sensitivity when it comes to selecting a funding portal. For comparison's sake when assessing the cost of capital in crowdfunding offerings, consider that underwriters in firm commitment initial public offerings for more mature companies receive 7% of the funds raised. Based on that benchmark, many of these funding portals appear expensive.
Target Amounts
Crowdfunding issuers are required to report a target amount on their Form C filings, specifying the amount of capital they seek to raise in their offerings. Over two-thirds of the 60 companies sought less than $100,000, with the median issuer seeking just under $60,000. No issuer targeted a capital raise in excess of $500,000. Figure H presents a breakdown of the target offering amounts reported by crowdfunding issuers.
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The target offering amounts selected by crowdfunding issuers may be driven to some extent by the additional regulatory burdens crowdfunding issuers face when raising greater amounts of capital under the federal crowdfunding regime. Crowdfunding issuers are subject to different financial statement review and disclosure requirements under Regulation Crowdfunding depending on the amount raised through crowdfunding offerings within any 12-month period (see Practice Note, Crowdfunding Offerings Under Section 4(a)(6): Form C Financial Requirements).
The two key thresholds demarcating the different disclosure requirements under Regulation Crowdfunding are:
- Offerings of $100,000 or less.
- Offerings not exceeding $500,000.
Target offering amounts may be clustering below the $100,000 threshold to avoid the requirement that issuers must have independent accountants review their financial statements for offerings over that amount. Issuers may also be trying to keep their offerings below $500,000 to avoid being required to have independent accountants audit their financial statements (although this requirement would not apply to an issuer's first offering under Section 4(a)(6)).
Crowdfunding Securities: Generally
Crowdfunding issuers offered five main types of securities to prospective investors:
- Common equity. Common equity instruments included:
- common stock for issuers organized as corporations; and
- common units or membership interests for issuers organized as LLCs.
- Preferred equity. Preferred equity instruments included:
- preferred stock for issuers organized as corporations; and
- preferred units or membership interests for issuers organized as LLCs.
The primary feature of these preferred equity instruments that distinguished them from common equity instruments was the inclusion of a liquidation preference. - Convertible securities. Convertible securities included:
- convertible notes; and
- simple agreements for future equity (SAFEs).
- Straight debt. Some of the debt instruments offered by crowdfunding issuers contained a fixed term and interest rate.
- Debt with revenue sharing. Other debt instruments required the issuer to repay investors a variable amount over a variable term based on the company's monthly revenue (such as 5% of monthly gross revenue) until the investors received some maximum amount (which was typically between 1.5x and 2x their original investment).
Figure I provides a breakdown of the types of securities offered by crowdfunding issuers.
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Equity Securities
Crowdfunding issuers predominantly chose to offer equity securities (see Crowdfunding Securities: Generally). The most frequently offered security (used by nearly half of the companies) was common equity. Preferred equity, despite being the instrument of choice for professional institutional startup investors, was used far less in the crowdfunding context, having been offered by only 10% of crowdfunding issuers.
Pre-Money Valuation
Pre-money valuations for equity securities offered in crowdfunding offerings ranged from just $360,000 to an astounding $100 million. The $100 million valuation, based on a previous financing round led by a large strategic investor for a biotech company building a bionic pancreas, was an extreme outlier (the next highest valuation was $16.5 million). Excluding the outlier, the average pre-money valuation for issuers offering equity securities (for whom valuations could be determined) was just under $5 million and the median was $4 million. Overall, these pre-money valuations were largely in line with the prevailing market for early-stage startup financing outside the crowdfunding space.
An issuer's pre-money valuation for the equity securities it offered was calculated based on the issuer's fully diluted share capitalization (including stock options issued or reserved for issuance under equity incentive plans) as disclosed in the company's Form C, multiplied by the offering price per share. Figure J depicts the number of crowdfunding issuers (for whom valuations could be determined) offering equity securities by pre-money valuation.
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Pre-money valuations for issuers offering preferred equity were significantly lower (by nearly half on average) than those of issuers offering common equity. Holding all else equal, preferred equity, by virtue of its having additional rights, preferences, and privileges (most notably, a liquidation preference), is usually considered more valuable than common equity for the same company. Therefore, one would expect an investor to pay more, not less for preferred equity. Yet, the opposite appears to be the case with these crowdfunding issuers. It is possible that some issuers must offer preferred equity at lower valuations than other issuers offering common equity at higher valuations because they are worse or more risky investments. However, it seems more likely that the scattershot approach to setting valuations in crowdfunding offerings (which, unlike in traditional venture financing, is being done largely by the issuer in a vacuum, without market feedback) may be leading to some irrational outcomes.
Voting
The majority of equity securities offered by crowdfunding issuers were non-voting securities. Only 45% of the issuers offered equity securities that included the right to vote on matters submitted to the shareholders or members of the company. The surprise here may be that so many issuers provided for voting rights. Managing a company with potentially thousands of small equity holders may become exceedingly difficult for the 45% of issuers that afforded their crowdfunders voting rights.
Convertible Securities
Convertible securities were the most popular crowdfunding instruments after common equity (see Crowdfunding Securities: Generally). The vast majority (nearly 90%) of issuers who used convertible securities opted for SAFEs over convertible notes.
For more information on the economic terms of convertible securities, such as valuation caps and conversion discounts, see Practice Note, Startup Seed Financing Instruments: Convertible Notes and SAFEs.
Valuation Caps
All of the convertible securities contained valuation caps that ranged from $2 million to $20 million. The average valuation cap was $6.8 million and the median was $5.5 million. Three-quarters of the valuation caps ranged from $3 million to $8 million, which is in line with seed financing market conventions in non-crowdfunding startup financings. Figure K gives a breakdown of crowdfunding issuers offering convertible securities by valuation cap:
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Discounts
Companies that provided a conversion discount gave between 10% and 20%, which is in line with seed financing market norms in non-crowdfunding startup financings. However, these companies were in the minority. Sixty-five percent of issuers offering convertible securities to investors did not include a conversion discount at all.
Forms
All but one of the SAFEs used by crowdfunding issuers were based on a form provided by the funding portal WeFunder (which in turn was based on a form originally popularized by the startup accelerator Y Combinator). The convertible notes used by crowdfunding issuers were based on a form called the KISS Convertible Note provided by the funding portal SeedInvest (which in turn was based on a form originally popularized by early-stage venture fund and startup accelerator 500 Startups).
Voting
Eighty-two percent of the convertible securities convert (upon a triggering event, such as a venture financing) into non-voting equity. Whether the securities issued on conversion contain voting rights appears to turn exclusively on the form used (see Forms). The WeFunder form of SAFE specifically provides for conversion into non-voting preferred stock, whereas the SeedInvest form of KISS convertible note allows for voting stock.
Debt Securities
Twenty percent of crowdfunding issuers chose to offer some form of debt security (see Crowdfunding Securities: Generally), including:
- Convertible debt.
- Straight debt.
- Debt with revenue sharing.
Disclosure
The length, detail and coverage of disclosure documents filed by crowdfunding issuers varied dramatically. It was clear that certain issuers worked closely with lawyers who had securities offering experience. Those issuers' offering documents resembled public company prospectuses in structure, detail, and sophistication. Other issuers' disclosure was rudimentary at best. There were also apparent differences in approach by platform. WeFunder, for example, had all of its issuers use a largely standardized web-based template for Form C disclosures. Other platforms had greater variability between the disclosures of different issuers on the same platform.
While the IPO prospectus-length disclosure delivered by some crowdfunding issuers may well be overkill given their early stage, other issuers did not even provide sufficient information to accurately calculate a pre-money valuation (giving prospective investors no way to assess the price they were asked to pay for the securities). None of the filings were required to be qualified or otherwise passed upon by the SEC prior to launching the offering, so it remains to be seen how active the SEC will be in policing Form C disclosures to make sure they comply with the minimum requirements of Regulation Crowdfunding.
Transaction Costs
Due to the substantial differences in detail provided in crowdfunding issuers' disclosure (see Disclosure), only 16 out of 60 issuers provided information on estimated professional fees incurred in connection with the crowdfunding offering. Of those issuers who did provide that information, many lumped together legal, accounting, and marketing fees and expenses. The highest estimate of legal and accounting costs combined was $50,000.
However, the minority of issuers who did separately break out legal fees reported an average between $5,000 and $10,000. Traditional seed financings without the expensive disclosure requirements of crowdfunding offerings are rarely that cheap, which may raise eyebrows among startup lawyers as to how legal fees for these crowdfunding offerings are so low. The most likely explanation is that the lawyers representing these initial crowdfunding issuers are offering substantial discounts to generate enough deal-flow to build a reputation as an expert in what they hope will be a burgeoning space.
Form C Filing Tracker (through July 16, 2016)
The following is a chart listing Form C filings for crowdfunding offerings launched in the two months following the effectiveness of Regulation Crowdfunding on May 16, 2016. An issuer's pre-money valuation, where noted in the chart, was calculated based on the issuer's fully diluted share capitalization (including stock options issued or reserved for issuance under equity incentive plans) as disclosed in the company's Form C, multiplied by the offering price per share.
Company Name (Link to EDGAR) | Business Overview (State/Year of Formation) | Target Offering Amount (Amount Raised) | Offering Details | Intermediary (Commission) | Annual Revenue (Number of Employees) |
Craft brewery in civil-war era church (d/b/a Beer Church Brewing Co.) (MI 2014) | $100,000 (TBD) | Unsecured revenue sharing obligation to pay investors 3% of monthly revenue until investors receive 1.5x their original investment | LocalStake (5% of funds raised plus $499/month fee during offering period) | None (3 employees) | |
Data encryption software (MS 2016) | $500,000 (TBD) | Common stock at a $5 million pre-money valuation | I-Bankers Direct (10% of funds raised) | None (No employees) | |
Land, engineering, and environmental services in the real estate and energy sectors (PA 2006) | $100,000 (TBD) | LLC units at $2.5 million pre-money valuation with preemptive rights and information rights | I-Bankers Direct (20% of funds raised; 10% in cash, 10% in warrants) | $670,261 (8 employees) | |
Social media platform providing real-time information on local nightlife (d/b/a Banter) (DE 2013) | $20,000 (TBD) | SAFE with 20% conversion discount and $8 million valuation cap; converts to combination of preferred and common stock giving investors a 1x liquidation preference | FlashFunders (7.5% of funds raised) | $21,601.80 (2 Employees) | |
Wholesale specialty coffee products (CA 2013) | $40,000 (TBD) | Secured promissory note will pay noteholders 5% of net revenue until noteholders receive 2x their original investment. | WeFunder (3% of funds raised) | $478,305.25 (28 employees) | |
Fast-casual taco restaurants in the San Francisco Bay area (CA 2015) | $25,000 (TBD) | Secured promissory note will pay noteholders 10% simple interest annually over 60-month term | WeFunder (3% of funds raised) | None (2 employees) | |
AXE Digital Guitar uses 14 buttons and an electronic strum-field to play any song (OH 2008) | $100,000 (TBD) | LLC units at $2.4 million pre-money valuation. | Jumpstart Micro (6% of the funds raised) | None (4 employees) | |
Electronic dimming windows (FL 2014) | $55,555.56 (TBD) | LLC units (insufficient information to determine pre-money valuation) | Initially launched on CrowdSource Funded but subsequently removed (10% of funds raised) | $13,838 (6 employees) | |
Social media platform that pledges not to censor political content (CO 2016) | $50,000 (TBD) | Common stock (insufficient information to determine pre-money valuation) | uFunding Portal (5% of funds raised) | None (1 employee) | |
Assorted consumer products in educational technology, recreational sports and lawn care sectors (AL 2016) | $100,000 (TBD) | Common stock (insufficient information to determine pre-money valuation) | Initially launched on StartEngine but subsequently removed (5% of funds raised) | None (No employees) | |
Sponsored endurance events involving beer (d/b/a BeerFit) (GA 2014) | $20,000 (TBD) | SAFE with no conversion discount and $5.5 million valuation cap; converts to non-voting series of shadow preferred stock | WeFunder (3% of funds raised plus $1,995 set-up fee) | $701,514 (5 employees) | |
Mobile application allowing users to retrieve private digital content using customizable voice commands (FL 2016) | $60,000 (TBD) | Common stock at $1.5 million pre-money valuation | Jumpstart Micro (6% of funds raised) | None (1 employee) | |
Social media platform for travelers (d/b/a TravelBook) (NY 2015) | $50,000 (TBD) | Non-voting LLC units at $1 million pre-money valuation | Jumpstart Micro (6% of funds raised) | None (1 employee) | |
Craft brewer and locally sourced restaurant (TX 2016) | $250,000 ($396,500) | Junior secured promissory note will pay noteholders 5.25% of monthly gross revenue until noteholders receive 1.5x their original investments | NextSeed (10% of funds raised from investors not referred by issuer; 5% of funds raised from investors referred by issuer.) | None (2 employees) | |
Non-chemical shark repellent device using acoustics to repel sharks (DE 2016) | $70,000 (TBD) | Non-voting preferred stock at $3 million pre-money valuation | FlashFunders (6% of funds raised) | None (No Employees) | |
Summer camps and after-school clubs empowering girls from ages 6-13 through art and leadership programs (CA 2012) | $25,000 (TBD) | Non-voting preferred stock with 6% non-cumulative dividend and profit-sharing dividend at $2.05 million pre-money valuation; redeemable at any time by company or holder at the purchase price (plus accrued but unpaid dividends) | WeFunder (3% of funds raised) | $338,851.01 (4 employees) | |
Craft hard cider made with Hawaiian-grown ingredients (HI 2015) | $100,000 (TBD) | SAFE with 10% conversion discount and $7 million valuation cap; converts to non-voting series of shadow preferred stock | WeFunder (3% of funds raised) | None (10 employees) | |
Hydroelectric power plants housed in 70-story buildings in metropolitan locations (OH 2010) | $50,000 (TBD) | Promissory note with 5% annual interest rate | uFundingPortal (5% of funds raised) | None (1 employee) | |
Enterprise content marketing software (DE 2016) | $50,000 (Offering withdrawn) | Non-voting preferred stock at $5 million pre-money valuation | FlashFunders (4% of funds raised) | None (3 employees) | |
Barrow's Intense is a ginger liqueur handmade in Brooklyn. (NY 2011) | $50,000 (TBD) | Non-voting LLC units at $4 million pre-money valuation. | WeFunder (3% of funds raised) | $540,097 (3 employees) | |
Second location of existing craft beer brewery and tasting room operating in Austin, Texas since 2009. (TX 2016) | $50,000 ($1,000,000) | Secured promissory note; company will pay noteholders 10% of gross revenues annually until noteholders receive 2x total return (or 3x for first $50K invested). | WeFunder (3% of funds raised) | None (1 employee) | |
Theme restaurant/bar in Austin, Texas focused on social board gaming. (TX 2015) | $150,000 ($119,700) | Secured promissory note with 42 month term, 18% annual interest rate (accruing monthly); prepayment without penalty | NextSeed (10% of funds raised from investors not referred by issuer; 5% of funds raised from investors referred by issuer.) | None (3 employees) | |
B2B marketplace for buyers and sellers of professional virtual and augmented reality products and solutions (DE 2013) | $300,000 (TBD) | Non-voting common stock at $0.36 million pre-money valuation | StartEngine (7% of funds raised) | None (3 employees) | |
Online crowdfunding education platform (DE 2016) | $200,000 (TBD) | KISS convertible note with 24 month term, 5% interest, 15% conversion discount, and $3 million valuation cap | SeedInvest (7.5% of funds raised) | None (No employees) | |
Ultra-thin, low-power, always-on screen for back of mobile devices (DE 2012) | $250,000 (TBD) | Non-voting common stock at $10 million pre-money valuation | Venture.co (9% of funds raised) | $278,610 (2 employees) | |
Fantasy sports platform offers daily matchups in which users make a single decision (VA 2016) | $400,000 (TBD) | Non-voting common stock at $2.5 million pre-money valuation | Venture.co (7% of funds raised) | None (No employees) | |
Eco-friendly ride-sharing service; 1 tree planted for every ride (IL 2016) | $278,066 (TBD) | Common stock at $5.2 million pre-money valuation | truCrowd (7% of funds raised) | None (No employees) | |
Small, portable personal watercraft (DE 2006) | $250,000 (TBD) | LLC units at $8.9 million pre-money valuation | Venture.co (8% of funds raised) | None (2 employees) | |
Whiskey made using accelerated aging process (OH 2009) | $100,000 (TBD) | Non-voting LLC units at $8.6 million pre-money valuation | Wefunder (3% of funds raised) | $1,075,304 (7 employees) | |
Weight scale and app that create 3D model of user's body to optimize fitness and weight loss (DE 2015) | $50,000 (TBD) | SAFE with no conversion discount and $8 million valuation cap; converts to non-voting series of shadow preferred stock | Wefunder (3% of funds raised) | None (2 employees) | |
Custom wall art prints from customers' photographs; smartphone app for augmented reality experience with prints (CO 2016) | $50,000 (TBD) | SAFE with 10% conversion discount and $2 million valuation cap; converts to non-voting series of shadow preferred stock | Wefunder (3% of funds raised) | None (1 employee) | |
Lightweight, affordable outdoor gear sold direct-to-consumer (CO 2015) | $50,000 (TBD) | Non-voting preferred stock with 10% annual dividend at $1.2 million pre-money valuation; redemption rights for issuer and investors | Wefunder (3% of funds raised) | None (4 employees) | |
Social networking platform for investors and traders providing on-demand crowdsourced market research (DE 2014) | $25,000 (TBD) | SAFE with no conversion discount and $3 million valuation cap; converts to non-voting series of shadow preferred stock | Wefunder (3% of funds raised) | $1,118 (7 employees) | |
Online platform matching advice-seekers with advisors (DE 2015) | $99,999.90 (TBD) | Common stock at $11.6 million pre-money valuation | StartEngine (7% of funds raised) | None (3 employees) | |
Immersive theme bar and theatre experience set in a Prohibition-era saloon (CA 2015) | $50,000 ($476,851) | Non-voting LLC units entitle holders to 0.1% of net profits per unit | Wefunder (3% of funds raised) | None (8 employees) | |
Online platform for users to design, create, and buy or sell customized jewelry (DE 2015) | $20,000 (Offering withdrawn) | SAFE with 15% conversion discount and $4 million valuation cap; converts to non-voting series of shadow preferred stock | Wefunder (3% of funds raised) | None (3 employees) | |
Mobile, on-demand and live educational marketplace for the Deaf community (DE 2015) | $50,000 (TBD) | SAFE with no conversion discount and $4 million valuation cap; converts to non-voting series of shadow preferred stock | Wefunder (3% of funds raised) | None (6 employees) | |
Subscription food distribution service operating in Brooklyn, NY provides access to sustainable, locally sourced food (RI 2011) | $50,000 (TBD) | SAFE with no conversion discount and $4 million valuation cap; converts to non-voting series of shadow preferred stock | Wefunder (3% of funds raised) | $961,102 (5 employees) | |
Online writing center for students (DE 2011) | $25,000 (TBD) | SAFE with no conversion discount and $7 million valuation cap; converts to non-voting series of shadow preferred stock | Wefunder (3% of funds raised) | $579,304 (4 employees) | |
Wearable medical alert device that tracks biometrics and routes alerts to appropriate care providers (DE 2010) | $50,000 (TBD) | SAFE with no conversion discount and $20 million valuation cap; converts to non-voting series of shadow preferred stock | Wefunder (3% of funds raised) | $1,483,560 (12 employees) | |
Reusable physical notebook allows users to scan and upload notes to the cloud (DE 2014) | $100,000 (Offering withdrawn) | Common stock at $16.5 million pre-money valuation; irrevocable proxy granted to issuer's CEO | Wefunder (3% of funds raised) | $207,961 (4 employees) | |
Durable, lightweight outdoor equipment and tents (CA 2010) | $50,000 (TBD) | SAFE with no conversion discount and $2.5 million valuation cap; converts to non-voting series of shadow preferred stock | Wefunder (3% of funds raised) | $112,399 (2 employees) | |
Vehicle-mounted, retractable tire-spiking device for police use to disable vehicles to safely end high-speed pursuits (DE 2016) | $50,000 ($92,036) | Non-voting preferred stock at $4.3 million pre-money valuation | FlashFunders (5% of funds raised) | None (5 employees) | |
Digital booking platform connecting talent buyers with musicians and bands (DE 2014) | $300,000 (TBD) | Non-voting common stock at $4.1 million pre-money valuation | StartEngine (7% of funds raised) | None (8 employees) | |
Medical marijuana software service for patient registration and one-scan check-ins at dispensaries (NV 2015) | $80,000 (TBD) | Non-voting common stock at $5 million pre-money valuation | StartEngine (7% of funds raised) | None (2 employees) | |
Ultra-clean, smartphone-controlled wood-burning stove (MD 2014) | $250,000 (~$170,000) | KISS convertible note with 12 month term, 6% interest, 15% conversion discount, and $7 million valuation cap | SeedInvest (10% of funds raised; half in cash, half in equity) | $100,000 (3 employees) | |
Co-working space in downtown Cleveland (DE 2016) | $200,000 (TBD) | Non-voting preferred stock at $1.25 million pre-money valuation | SeedInvest (10% of funds raised; half in cash, half in equity) | $14,901 (No employees) | |
Software platform matching service providers with clients (DE 2015) | $22,400 (TBD) | Common Stock at $8.4 million pre-money valuation; redeemable by issuer within first 34 months at 2x purchase price | StartEngine (7% of funds raised) | None (6 employees) | |
Social networking platform for gamers (DE 2016) | $100,000 (TBD) | Common stock at $3.7 million pre-money valuation | StartEngine (7% of funds raised) | None (No employees) | |
Custom-printed condoms (DE 2012) | $100,000 (TBD) | Non-voting common stock at $4 million pre-money valuation. | StartEngine (7% of funds raised) | $45,054 (No employees) | |
Moonshine distillery and liquor wholesaler/retailer (WV 2014) | $300,000 (TBD) | LLC units with limited voting rights at $2 million pre-money valuation | StartEngine (5% of funds raised) | $790,683 (No employees) | |
Genetically engineered plants (such as a glow-in-the dark plant) (DE 2012) | $200,000 ($335,111) | SAFE with no conversion discount and $7 million valuation cap; converts to non-voting series of shadow preferred stock | Wefunder (3% of funds raised) | $5,694 (3 employees) | |
Develops commercial real estate in Chicago for underserved communities (IL 2003) | $25,000 (TBD) | Junior secured promissory note with founder guarantee will pay noteholders 5% simple interest annually over 10-year term; pre-payable at any time | Wefunder (3% of funds raised) | $578,652.66 (1 employee) | |
Specialty gourmet donuts (WA 2016) | $50,000 (TBD) | Non-voting LLC units at $2.4 million pre-money valuation | Wefunder (3% of funds raised) | None (4 employees) | |
Alcoholic popsicles in different cocktail flavors (DE 2015) | $50,000 ($101,386) | SAFE with no conversion discount and $20 million valuation cap; converts to non-voting series of shadow preferred stock | Wefunder (3% of funds raised) | None (3 employees) | |
Bio-degradable toothbrushes (MN 2012) | $50,000 (TBD) | SAFE with no conversion discount and $4 million valuation cap; converts to non-voting series of shadow preferred stock | Wefunder (3% of funds raised) | $13,903.53 (2 employees) | |
Internet service provider using fiber optics to deliver 10x faster internet at 1/10th the cost of traditional telecom (DE 2016) | $60,000 (TBD) | Unsecured promissory note with founder guarantee will pay noteholders 5% simple interest annually over 10-year term; pre-payable at any time | Wefunder (3% of funds raised) | $136,384 (5 employees) | |
Content production company that partners with, and is owned by, fans (DE 2016) | $500,000 ($999,999) | Common stock at $11.4 million pre-money valuation. | Wefunder (3% of funds raised) | None (2 employees) | |
Bionic pancreas system that autonomously manages blood sugar levels in people with Type-1 diabetes (MA 2015) | $50,000 ($1,000,000) | Non-voting common stock at $100 million pre-money valuation. | Wefunder (3% of funds raised) | None (10 employees) | |
Upscale hostel in Austin, Texas (TX 2016) | $275,000 ($396,500) | Junior secured promissory note will pay noteholders 5% of monthly gross revenue until noteholders receive 2x their original investments | NextSeed (10% of funds raised from investors not referred by issuer; 5% of funds raised from investors referred by issuer.) | None (3 employees) |