Interesting. These appear to be JOBS act short-form mini-IPOs.[1] That's something new, which just became possible this year and hasn't been used much.<p>Here's Farm from a Box's SEC filing.[2] Typical crappy terms - no voting rights, no anti-dilution, no transferability for one year, insiders have control.<p>Nobody associated with the project has a farming background. They have two employees. One is a liberal arts majors from UC Berkeley and one has an unspecified degree from UCLA. They do not have a working prototype farm according to the SEC filing.<p>The filing for Youngry [2] is more interesting. They want to start a glossy web site for young entrepreneurs. They claim lots of good contacts. (Miss Las Vegas?) They're only asking for $50K, which isn't enough. Two-person business.<p>Republic takes a 5% cut; that's how they make their money.<p>This is a reasonable concept, but the current set of deals isn't very impressive. These are people looking for Series A funding and would probably be rejected by YC. The idea behind the JOBS act short-form IPO was supposed to be that when your startup got too big for angel/friends and family/Kickstarter funding, there was a next level and an exit strategy for the original funders. It wasn't intended for startups this early.<p>You can look up these companies on the SEC's EDGAR system. If you scroll down all the way to the end of Republic's pages, there's a link.<p>[1] <a href="https://media2.mofo.com/documents/120416-pli-quick-guide-jobs-act.pdf" rel="nofollow">https://media2.mofo.com/documents/120416-pli-quick-guide-job...</a>
[2] <a href="https://www.sec.gov/Archives/edgar/data/1679373/000167937316000001/FFABFormC.pdf" rel="nofollow">https://www.sec.gov/Archives/edgar/data/1679373/000167937316...</a>
[3] <a href="https://www.sec.gov/Archives/edgar/data/1679372/000167937216000002/YoungryFormC.pdf" rel="nofollow">https://www.sec.gov/Archives/edgar/data/1679372/000167937216...</a>
You don't get shares if you invest -- you get something called a "crowd safe": <a href="https://republic.co/learn/investors/crowdsafe" rel="nofollow">https://republic.co/learn/investors/crowdsafe</a><p>More info here: <a href="http://www.crowdfundinsider.com/2016/06/87034-republic-adds-creates-crowd-safe-investing-vehicle-for-reg-cf-issuers/" rel="nofollow">http://www.crowdfundinsider.com/2016/06/87034-republic-adds-...</a><p>I'm a bit leery of these. According to the article, "unless specifically negotiated, SAFE holders do not have any voting or information rights." I also suspect that the shareholders get taken care of before crowd safe holders in legal or bankruptcy proceedings. The rights of crowd safe holders haven't been tested in court.<p>I think the lack of rights and additional risk inherent in crowd safes would need to be compensated for by some kind of discount relative to what investors pay for shares. Otherwise, the risk-adjusted return is lower.<p>I would also be skeptical of the potential of a startup that can't convince normal VCs to fund them. If people who do this for a living don't think a startup is worth investing in, why should I?
The general counterargument to the "we're in a bubble" observation has been that it's all private equity, that people aren't risking their houses or 401(k)s on startups this time around. This would appear to be a move in that direction.
There are a number of similar sites (wefunder was YC, and Angellist dominates the space).<p>We shouldn't treat the "public at large" like kids, and they have the right to do what they want with their money.<p>HOWEVER, I do hope that people don't get hopped up on TechCrunch stories about gazillion dollar exits and then cash out their 401k to invest in some company or another.<p>They should know that the vast majority of startups fail, and that the chances are any particular one will fail. They should also understand that it isn't worth the due diligence for $100 or something, so you're really taking a flier unless you piggyback off someone else's diligence (which you should).
Startups as investments are very risky with long payoff horizons. With their limited funds, this is a poor investment for the average investor. I can't help but feel like this will hurt more people then it will help.
It appears that the Startup/issuer sets a static offering price [0]. When I envision how crowdsourced investing would reinvent this space, a huge component of the value added would be a degree of price-elasticity and feedback. It doesn't have to be a full-on auction, but getting the pricing right (for the issuer) seems like THE killer feature here... (thinking back to the concept of how Google priced their IPO )[1]. Offering a product that facilitated more innovative pricing structures at offering would be extremely compelling - and would greatly increase Republic.co's target market as well.<p>[0] <a href="https://republic.co/learn/issuers/how_it_works" rel="nofollow">https://republic.co/learn/issuers/how_it_works</a>
[1] <a href="http://www.wsj.com/articles/SB108328345314098183" rel="nofollow">http://www.wsj.com/articles/SB108328345314098183</a> (potential paywall)
Don't current Title III rules make it legally risky for companies to crowdfund like this? The last thing I read about this suggested that crowdfunding like this could put a startup in a position of having to effectively go public very early in their life --- which would suggest that none of the best startups would crowdfund, which would create a major adverse selection problem for Republic.
Wow, I'm blown away by the negativity in this thread. I know Silicon Valley is conservative but this is killing it.<p>In Europe (of all places), this sort of stuff has been going on for a number of years now. The first startup I worked for had gathered its €150k preseed funding from over 20 people. Not even with a convertible note, they really all went to the lawyer's office together. It was pretty nuts, but it got the product out (and then tanked miserably but hey, people knew what they were getting into).<p>Sites like Leapfunder (<a href="https://www.leapfunder.com/" rel="nofollow">https://www.leapfunder.com/</a>) have been doing what Republic does for years, but then in Europe. As far as I can see, the only reason the US is behind on this one is the "accredited investor" rule that European countries don't appear to have. I wonder how Republic works around that but I guess it's a good development. I have a hard time understanding how any "you're only allowed to X if you're rich" law can be fair (and I'd assume that especially libertarian HN would be with me on that one).<p>But still, HN's conclusion is that it's stupid to do this? What? Why is it stupid to invest $5k in a startup but not to invest $500k in a startup? If you ask me, that's irrational to the bone. If you really can't imagine some good reasons why a company wouldn't want to raise from a VC but would prefer to crowdfund, you didn't really try very hard.<p>I can't find it back but did HN react the same when Kickstarted got launched? Is there really that big a difference between "first to get a Pebble" and "first to get some Pebble shares"?
> Crowdfunding investing is highly speculative and every investment may result in a loss. By investing small amounts across multiple companies, you can reduce your risk compared to a large investment in a single company.<p>But there's only four companies.<p>> Do your own research. Read the documents provided by each company you plan on investing in. Get independent legal, accounting, financial advice. If you have any questions or need more information, ask the company.<p>Sounds expensive.<p>Maybe we crowdfund the advice too? Is someone going to make a robo-VC like lendingrobot?
One of the tags for projects is "Women Founders". In theory that shouldn't make a difference as to how investable a project is or isn't? It seems as ridiculous as giving the founder's favourite colours or ethnicity. I just don't understand what they were thinking when they put that feature in.
I can see this having all the same problems Kickstarter has with video games:<p>- A bunch of people whose only experience with the industry is as consumers, with no real knowledge of how investing or the field they're investing in works<p>- Companies that have little more than an idea and big promises, lacking the skill, manpower, and knowledge of how to see a product through from conception to release (plus a lack of knowledge on how to obtain those things)<p>- Companies that stop updating and eventually just run off with the money<p>- People who think they're entitled to a refund if what they invested in fails<p>Will "Angel Investor at Republic" overtake "CEO and Founder at Company That Is Literally Just A Facebook Page" as the job title of choice for wannabe tech bros?
Jared Friedman, YC Partner, post from 3 days ago, on raising money online and the differences between the various crowdfunding services, Angellist syndicates and YC:<p><a href="http://www.themacro.com/articles/2016/08/raising-money-online-advice-for-startups/" rel="nofollow">http://www.themacro.com/articles/2016/08/raising-money-onlin...</a>