Elio Crowdfunding

[Bilbo B]

Let's say Elio does make the "real" offering and does hit the $25 million mark in the test-the-waters phase of the campaign (seems pretty reasonable, no?). Let's assume the drop-out rate IS 30%, and that the money / investor ratio stays the same. In other words, investors disappear proportionately to dollars.

The current ratio of investors per dollar is 1 investor per $3,857.73 in revenue.

So we will have 6,481 investors. 30% go away, leaving 4,537. They will be investing $17,500,000. Startengine.com charges $20 per transaction, so Elio's fees to them will be $90,740. In addition they'll have somewhere between 50 and 100 thousand bucks in filing fees, auditing costs, lawyers, etc etc.

So let's assume the total costs to Elio for are $190, 740. That leaves them a net of $17.3 million actual dollars. Not bad for a month's work plus filing.

I think this is a low estimate and the actual results will be higher. Here's why:

1. The campaign may well exceed goal, by how much I don't know -- if the "test the waters" phase lasts two months, it will certainly exceed $25 million before it runs out of gas, or hit's the time's-up deadline.

2. The drop-out rate is closer to 15% than to 30% (I actually believe this will be the case)

3. Actual money committed may be more per investor (or less) than the average so far. Wild card. But I think those who are serious may invest more than they're saying here -- particularly small investors (those who are now under $1000) like many of us po folks.

4. I've calculated on the basis of the number of investors driving the total (assuming an average of $3700+ dollars. If that ratio goes up because the heavy hitters stay in the game while the weaker investors tend to drop out first, the grand net total will rise. Depends on who stays and who folds.

5. Something else may happen -- some wild card. Paul Elio has a heart attack. DOE comes through with the ATVM loan. P5 actually gets 92 miles per gallon. Martians land on earth. The Chinese economy keeps tanking and takes the rest of the world with it. Any or all of these could grossly affect the results of Elio's startengine campaign. If there's a wild card -- let's hope it's a good one.

OK, back to counting the ticks on the graph ...

I suspect a significant factor in how many of these actually happen will be what stake in the company you're actually getting. $25 Million is about 10% of what they've been saying they need. Will these investors get 10% of the company/stock? A better question would be 10% of what? The 'Inc.' article they sent out earlier today implies that these shares can be sold OTC. If that's true, that could make a significant difference. If you're forced to hold on to them for a period of time (2 years, 5 years, not uncommon for employees getting stock or options in a startup), that might cause some concern. Bottom line, we're all saying "Sure, we're interested" when we know absolutely no details about what we're getting for our investment. The implication is at least one 'share' for each $250, since that's the minimum investment. But out of how many shares? $250/share for $25 Million works out to 100,000 shares for this funding round, but this certainly isn't the only one. If this is 10% of the total they need, then maybe there's 1 million total shares (or will be someday, until the issue more)? The people who've already invested are certainly getting something (Stuart Lichter and his fellow investors). The accredited investors who funded the P5 are expecting something, too. That will be the key point for me, what am I getting for my investment.

Don't get me wrong, I'm as thrilled about this as anyone. I jumped in the first day. But there are a lot of unknowns at this point.

 

[AriLea]

Just snagin that 4am data point to close out 24 hours.
79%
Reserved
$19,708,825
..4am yesterday was 18,780,000 so just a micron under 1m in 24hours. Pretty close to the same rate since the begining. Apparently whatever factors drive these commitments, such as the discovery rate in the population, it's on going. That gives just over 5 days to reach the goal.
OK, back to bed for me and no worries.

 

[Buckeyejake]

My 30% estimate falloff of pledges is just my rough experience with fund raising on community projects. Again, they were in the scope of a few million of dollars. Nothing the size of this venture in dollars or taking in the whole country. I'm sure the financial people at Elio have computed a projected falloff and are moving forward. Go Elio!

 

[JEBar]

My 30% estimate falloff of pledges is just my rough experience with fund raising on community projects.

should the actual money collected fall short, can they reopen the campaign, extend the goal. or start another one ?

 

[Ekh]

I was wrong about the fee

Jusr snagin that 4am data point to close out 24 hours.
79%
Reserved
$19,708,825
..4am yesterday was 18,780,000 so just a micron under 1m in 24hours. Pretty close to the same rate since the begining. Aparently what ever factore drive these commitments, such as the discovery rate in the population, it's on going. That gives just over 5 days to reach the goal.
OK, back to bed for me and no worries.

Hey, AriLea, where did you determine the "testing the waters" phase ends in 5 days? I've been all through the Startengine site and can't find any set length to the "test the waters phase." Did EM say this someplace and I missed it?

 

[Ekh]

should the actual money collected fall short, can they reopen the campaign, extend the goal. or start another one ?

Good question. They're allowed to raise up to $50 million and only to have one offering per year. (Federal reg for Tier II campaigns).

They ARE allowed to run non-equity (no stock) campaigns in parallel with a Reg A+ campaign. This is in the Startengine FAQ, in case you were wondering how I knew this stuff.

 

[Ekh]

Arilea, you need to get more sleep!

 

[JEBar]

Good question. They're allowed to raise up to $50 million and only to have one offering per year. (Federal reg for Tier II campaigns).

info appreciated .... given that they started out wanting raise $50M and have cut it to $25M it would appear that something near $25M is what they need

 

[JEBar]

I just went in and changed the amount of my reservation .... I noticed they have added a "robot detector" to the process

 

[Ekh]

11:50 AM 7/11

Total $20,220.325 Investors 5123 Average investment $3,946

This seems high to me, almost 25% higher than our gang here has invested (I think). Makes me worry about the bail-out factor later when they actually open the funding campaign -- which there's no doubt at all they will do!

11:54 -- Someone just kicked in another $5,000. Or said they were interested in investing that amount ... have to remember it's all play money right now. If there were a sound attached, like a slot machine, that went "ding" every time someone invested (think It's a Wonderful Life) would it be totally aggravating, or more like music to your ears?