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  1. #1
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    Default Equity Crowdfunding

    I thought I would start a new thread for 2016. There is a good thread under Snowball Effect but the posts covered all platforms so a general thread will be good.

    Late last year they seemed to hit a wall and apart from the two funds (punakaiki and Powerhouse Ventures) that raised over a million each, not much happened at the end of the year, and 2016 has got off to a slow start (only one from memory - a dog tech product and a wholesale listing for SOS).
    There are few now listed or coming up so it will be interesting to see how much support they get:

    On Equitise:
    Aisleworx - https://equitise.com/project/aisleworx - backed by Flying Kiwi Angel group
    Skins - https://equitise.com/project/skins - duel/triple listed in NZ/Oz and UK
    CropLogic - https://equitise.com/project/transfo...vices-industry backed by Powerhouse Ventures
    Invert Robotics - https://equitise.com/project/invert-...onal-expansion Backed by Powerhouse Ventures

    On Snowball effect
    Squirrel - https://www.snowballeffect.co.nz/offers/squirrel-raise

    on PledgeMe
    none - and they will struggle to meet their forecasts made in their own crowd raise.

    Others
    DOA?

    Personally I think all the companies are good companies and will be successful. The question is just whether the valuations they are selling at give you a good risk/reward mix.

    Note: croplogic and invest aren't 'public' yet so the links might change.

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    Aisleworx, just stumbled upon it while sitting around on the internet while the rain came down. Decided to check up on the crowdfunding pages. I seriously looked at the brewing company, the movie and the hydroworx. But havn't invested until today, just bought a whopping 50 shares in aisleworx. Looks promising and i like the safety/advertising/easier shopping with kids aspects. Will see how it goes...

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    Quote Originally Posted by NZSilver View Post
    Aisleworx, just stumbled upon it while sitting around on the internet while the rain came down. Decided to check up on the crowdfunding pages. I seriously looked at the brewing company, the movie and the hydroworx. But havn't invested until today, just bought a whopping 50 shares in aisleworx. Looks promising and i like the safety/advertising/easier shopping with kids aspects. Will see how it goes...
    Not bad eh.. pretty much no liquidity though (relying on sale to another media company) but I guess $374 is an affordable amount to lose.

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    Quote Originally Posted by Kelvin View Post
    Not bad eh.. pretty much no liquidity though (relying on sale to another media company) but I guess $374 is an affordable amount to lose.
    yes, but i don't like to lose money, however have a limit of $500 on these investments. I like that they are profitable and have in some aspects a proven buisness model. Seems like a simple idea too.

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    Quarterly update from Snowball Effect

    https://www.snowballeffect.co.nz/blog/company-progress-report-march-2016
    Last edited by Harvey Specter; 08-04-2016 at 08:18 PM.

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    Quote Originally Posted by Harvey Specter View Post
    On Equitise:
    CropLogic - https://equitise.com/project/transfo...vices-industry backed by Powerhouse Ventures
    Invert Robotics - https://equitise.com/project/invert-...onal-expansion Backed by Powerhouse Ventures
    More detail has now gone up on these two and they have (or just about) hit their minimums.

    Interestingly, both these have Powerhouse Ventures as a major shareholder which (re)announced today that it is going for an ASX listing. Powerhouse did a wholesale raise on Snowball Effect late last year and given the uplift in value the two above are showing, it will be interesting to see what return those that invested in the Powerhouse crowdfunding raise will get at the IPO. Paywalled NBR article on Powerhouses ASX planned IPO: http://www.nbr.co.nz/article/powerho...po-cg-p-187611

    Disclosure: Hold small amounts in all three from previous (pre crowdfunding) rounds.
    Last edited by Harvey Specter; 15-04-2016 at 12:18 PM.

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    Quote Originally Posted by Harvey Specter View Post
    More detail has now gone up on these two and they have (or just about) hit their minimums.

    Interestingly, both these have Powerhouse Ventures as a major shareholder which (re)announced today that it is going for an ASX listing. Powerhouse did a wholesale raise on Snowball Effect late last year and given the uplift in value the two above are showing, it will be interesting to see what return those that invested in the Powerhouse crowdfunding raise will get at the IPO. Paywalled NBR article on Powerhouses ASX planned IPO: http://www.nbr.co.nz/article/powerho...po-cg-p-187611

    Disclosure: Hold small amounts in all three from previous (pre crowdfunding) rounds.
    Something doesn't quite add up here. Google powerhouse and snowball effect and you can see that these 2 companies had an 'enterprise value' of ~$4m and ~$1.6m respectively just last year. What has changed so significantly in less than a year to now value both of these companies at around $10m each? it appears that neither have any revenue today so it can't be a surge in sales. If something had dramatically changed then they would have highlighted that in the equitise links above. So I think we can be safe in assuming that nothing has materially changed.
    If this sort of change in enterprise value is what venture funds use to calculate their IRR then hopefully someone shines a spotlight on this in any powerhouse IPO analysis.

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    James - I'm not saying the valuations are correct but I don't think you can draw the conclusion you are. PowerHouse were required to value it's investments at the value of the last round except in limited situations. I know Lance (Punakaiki) has moaned about this but it is the accounting standard.

    They have obviously achieved something since the last round, whether it's worth $20m pre I don't know.

    Disc: I haven't invested in this round as the uplift in value makes my current investment big enough for a high risk, illiquid invt. Personally I think both have great potential

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    Quote Originally Posted by Harvey Specter View Post
    James - I'm not saying the valuations are correct but I don't think you can draw the conclusion you are. PowerHouse were required to value it's investments at the value of the last round except in limited situations. I know Lance (Punakaiki) has moaned about this but it is the accounting standard.

    They have obviously achieved something since the last round, whether it's worth $20m pre I don't know.

    Disc: I haven't invested in this round as the uplift in value makes my current investment big enough for a high risk, illiquid invt. Personally I think both have great potential
    It looks like the companies have been going for more than 5 years and are yet to generate any revenue and about to run out of cash. So these capital raisings are actually for life support but dressed up as being for growth.
    $10m is a fantasy. That's fine for Angel investors and small capital raisings but I don't think anyone would argue that you could find a buyer for these companies at $10m.
    I don't have a problem with this or these companies. It is up to each business to con vince investors.
    My concern is having a publically listed entity where investors don't have any visibility on the performance of the portfolio companies and can only make their decisions from the IRR that is based off these valuations. There will be a tendency to keep portfolio companies on life support so as to delay recognising failure and a massive write-off on valuation. Investors would be severely disadvantaged not knowing what the timing of these events will be.
    I'm also cynical on the timing of their portfolio companies crowd funding. All done at the same time, only requiring a very small raise to support a massive uplift in the valuations, and just prior to the announcement of an Intention to IPO.
    Is there anything tangible that has happened to justify such a jump in valuation? Not according to the summary pages on equitise.

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    You make a few good points. I think they are referred to as vampire companies. Funds keep them on life support to justify their valuations.

    And with PowerHouse IPO coming, they want a high valuation. I surprised they haven't pushed to IPO Hydroworks first.

    In both cases the companies are progressing. Whether it is fast enough, I don't know.

    For croplogic, I think they made a mistake of being too technical. They should have launched a MVP earlier to get out to market. Have a look at CropX valuation to see what could of been on a much simpler product. I see them as similar to PEB, the tests they have done show they are the best but getting big uptake is what they struggle with.

    For Invert, their product is ready, they have done all the tests and just need to sign a contract. There are few users in there current niche but they are all big so it will be feast or famine. Once/if they get that contract signed, they should grow quickly, then look to diversify into other areas.

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    Quote Originally Posted by Harvey Specter View Post
    For croplogic, I think they made a mistake of being too technical. They should have launched a MVP earlier to get out to market.
    Yup. Doesn't appear to be any urgency to sell anything.
    5 years of development, securing IP rights, etc etc, and still no customers?
    I think you've hit the nail on the head. They've done the absolute opposite of selling a minimum viable product and seeing what the market wants early. They are still saying that their use of funds includes securing additional IP rights!

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    Last day for Veriphi on Snowball effect, comfortably over the minimum target now, added about 100k in the last day or two. I guess plenty have been waiting till the last minute to avoid tying up funds for too long or having them returned if the minimum wasn't hit.

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    Quote Originally Posted by mfd View Post
    Last day for Veriphi on Snowball effect, comfortably over the minimum target now, added about 100k in the last day or two. I guess plenty have been waiting till the last minute to avoid tying up funds for too long or having them returned if the minimum wasn't hit.
    Yes - one of the disadvantages of the Snowball platform. Why would you invest early and tie up funds. Even if over the minimum, why pay early. I think this does have an impact on some of their campaigns as if you could commit without paying, then you would commit earlier and make the campaign look like it had more momentum.

    I haven't invested in Veriphi. Very big potential market but a high valuation given they dont know if it will work. What was it? about $8m pre money valuation and still dont know if it will make money. Having said that, what is PEB's valuation

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    Not much going on and Two of the early ones face big write downs. Carbonspace raised a new round at 25% the previous round and Aeronavics has failed to raise a second round putting it on life support - $10m valuation has disappeared.

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    Anyone invested in Equity Crowdfunding recently?

    ParrotDog (https://www.pledgeme.co.nz/investmen...rotdog-brewery) and Andrea Moore (https://www.snowballeffect.co.nz/offers/andrea-moore) seem to be getting a decent level of interest

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