Elio Crowdfunding

[Johnny Acree]

I would keep an eye on the OTCQX market for ELIO.

Just guessing.

 

[slinches]

I think there was a real financially driven reason for where they set the minimum buy. Smaller purchases still carry the same overhead costs and selling less than 50 shares would mean that a larger portion of the money would go to that rather than actually providing funding for EM. Maybe they should have gone with a 40 share minimum rather than 50 to maximize the value, but at some point the transaction costs would outweigh the added income and no matter how many more purchases they draw, no more money would actually come in.

 

[outsydthebox]

That's what bugs me. The reason they raised it seemed to be something along the lines of "The average expression of interest was around $1000" so they figured the low-ballers like myself weren't worth their time. But now that we see how many of the high-value expressions where totally bogus, perhaps the true "average" was in-fact lower, and they just cut a whole lot of possible dollars out of the equation. Of course, we'll never now how many of the low-value expressions were genuine or not, but don't forget that the highest grossing crowdfunding project of all time ($105,189,806) had a minimum contribution of just $1.

I've supported a few projects on Kickstarter, but never in my life have I contributed even $100. My initial buy-in of $300 was far and above anything else I've ever considered, yet that was thrown right back in my face. As much as I love the Elio and am excited about owning one, that still hurt.

I think it was based on SE's fees. IIRC, SE is charging $50/per investor. That means, on a $100 investment, SE gets 50%. On the $600 minimum, SE gets 8.33%.

 

[Sethodine]

I think it was based on SE's fees. IIRC, SE is charging $50/per investor. That means, on a $100 investment, SE gets 50%. On the $600 minimum, SE gets 8.33%.

I guess that would make sense. I figured SE was using the typical crowdfunding system of FEE = x% of total money raised. All well.

 

[Chris F]

Also, it is more expensive from a transfer agent and broker standpoint to handle smaller transactions. Maybe that is not so important in today's fully electronic market, but brokers used to charge an extra fee to handle less than a "round lot" of 100 shares.

 

[Rob Croson]

That's what bugs me. The reason they raised it seemed to be something along the lines of "The average expression of interest was around $1000" so they figured the low-ballers like myself weren't worth their time. But now that we see how many of the high-value expressions where totally bogus, perhaps the true "average" was in-fact lower, and they just cut a whole lot of possible dollars out of the equation.

It sucks that the minimum was raised. IMO, EM knew all the details and expenses before opening the expression of interest phase, so there was no valid reason to start low and then raise it. That was nothing but a screw up on their part. And it sucks that people who thought they could invest got cut off.

However...

To raise an extra $1M at $250 per investor would take an additional 4,000 investors. (And of that $1M, SE would have claimed a whopping $200,000!) Given that they only had 14,000 expressions of interest, I just don't see that losing the low-dollar pledged cost them all that much in the end. Back-of-the-envelope calculations:

Average pledge: ~$3,500
Total invested to date: $16M
Guesstimated # of investors based on that: 4,571

So ~9,500 people who expressed interest didn't come through. If half of all those people were $250 investors that elected not to go with a $600 investment (so approx. 4750 people), then EM would have left $1.2M on the table. Of which SE would claim nearly a quarter million.

The idea of such high a number of people who were able to pledge $250, and then not be able to follow through with $600, is simply not believable. (Remember that the $250 pledge was only available for a short period of time.) And if it did indeed happen, then it would have only raised the $16M total to $17.2M.

Of course, we'll never now how many of the low-value expressions were genuine or not, but don't forget that the highest grossing crowdfunding project of all time ($105,189,806) had a minimum contribution of just $1.

As someone else mentioned, SE's fee was a flat $50 per investor. (And also a stock option of their own but I forget the details.) Given those kinds of fees, you have to have a reasonable minimum per transaction. And remember, they are giving away tangible pieces of their company with every transaction.

So, yeah, I agree that the way the minimum was handled really sucked. But as much as it pissed off some people, the total effect on the crowdfunding effort could only have been marginal, if not so small as to be lost in the noise.

 

[toxotes]

Im totally with you Sethodine.
Elio changed the rules. I understand the price to do business then ask for $600 NOT $250.

But as Elio is still is still currently advertising $6800 they are starting to maybe ask $7300. I understand the price of doing business is going up then stop advertising at $6800.

 

[Chris F]

I think it was based on SE's fees. IIRC, SE is charging $50/per investor. That means, on a $100 investment, SE gets 50%. On the $600 minimum, SE gets 8.33%.

The Offering Circular said SE was getting $20 a person, not $50.

 

[outsydthebox]

The Offering Circular said SE was getting $20 a person, not $50.

Thank you for the correction. Do you happen to have a link to that?

 

[RUCRAYZE]

Im totally with you Sethodine.
Elio changed the rules. I understand the price to do business then ask for $600 NOT $250.

But as Elio is still is still currently advertising $6800 they are starting to maybe ask $7300. I understand the price of doing business is going up then stop advertising at $6800.

My take on keeping the 6,800.00, for the first round of 1k all ins, they will respect that price, and the incentives.Now as 15k units are out there with the press/media climbing all over it, it will have. met one of their major public advertised achievements. Preceded with the closing of incentives, followed by the closing date of the $6,800 ,and announcing that with increased production costs........we are forced, beginning (date) to raise the price to......
I think the first batch of incentive owners will compensate E M in the interest, excitement and orders the E will generate.
This is predicated on having units to sell at any price. I still think Jay Leno should get an early unit.