8 ms·

Mainvest – Invest in brick and mortar businesses

46 points by apsec112 6y ago

cultofmetatron 6y ago
with you know what on everyone's minds, I'm interested in investing in the funeral home on the front page. Seems like a pretty stable place to put one's money regardless.
- Xunxi 6y ago
  Non accredited investments or equity crowdfunding is very risky. Do your your diligence before you part with your money. I also thought this was weird, "Mizen will also showcase local art, host a weekly support group for veterans, and offer conference rooms to be used by local nonprofits." I wasn't aware of conferences in funeral homes.
  - jrockway 6y ago
    Equity crowdfunding is always something that's sounded interesting to me on the surface. Right now crowdfunding is just pre-ordering something with a 0.01% chance of actually getting the thing you've ordered. (I've crowdfunded 3 things in my life. All 3 things failed and I lost everything! But... this is maybe $100 total so I'm not out too much ;) Getting some equity in the business always made more sense to me. Sure, I want the thing, but for the amount of risk I'm taking on, I want a percentage of your company and future profits!
  - julianlam 6y ago
    Neither am I, but I imagine that's part of the overall vision, that this isn't to be a stuffy funeral home of old, but a new fancy-pants one where you can look at art, rent out rooms, and such, in addition to honouring the dead.
- WJW 6y ago
  You should do what you want with your money, but it is wise to do your research: - It was founded in September 2019, but has not even acquired a lease on a suitable location yet. - The presentation states they will use the money raised to take over an existing funeral home, but the "risks" section in the data room says it "is a newly established entity and has no history for prospective investors to consider." If they are taking over an existing funeral home, surely the numbers from that funeral home would be available. - Later on in the presentation slides on the first place, they state that the funeral home they are looking to take over has about 200k revenue forecasted for FY2020. On the data room "financial forecasts" section projected revenue for year 1 is almost double that at 380-390k. Also despite the funeral home presumably existing for some time already, they think they'll be able to grow revenues almost 50% in 2-3 years. - The president has over 20 years experience in death care which is nice. The vice president seems to be his wife and is currently working as a dental assistant. - The risks include that they might not have sufficient accounting controls in place (!). You won't even know if they are doing well or not. - They offer "guaranteed" (provided they still exist in 2026) return of $1800 on 1/1/2026 on $1000 invested. That is an annualized ROI of more than 11%. That they are offering interest rates this high means that all the providers of lower interest rates have rejected them. A highly speculative startup in electric scooters here in Amsterdam recently offered 8% and that was more than enough to get enough interested investors. You should ask yourself why they are offering such high interest rates and what it means for the (perceived by the market) chances of them not existing in 2026 to pay back your money. To summarize: there are a number of "red flags" that warrant extreme caution.
ethhics 6y ago
This is an excellent idea, though perhaps too much like crowdfunding. There’s an early bird bonus that bumps your ROC—for instance, helping float a parrot store through COVID as one of the first X dollars can push me from 30% to 50% returns (both over 7 years). Also, considering the uptick in cases over the past week, the timing of investing in small businesses seems suspect.
sgt 6y ago
Do people actually expect better returns from investing in local businesses like these (notorious for coming and going) over say the stock market?
- malux85 6y ago
  I had a friend who contacted me recently, and sent me a blockchain startup “to review” I said - did you buy these because it was a friend of yours, or do you expect them to increase in value over time? Or some other reason? She said “I don’t know why I purchased these, I purchased them without understanding it” Sooooooo there’s your answer. The level of analysis that average people do on investments is near zero or zero
  - sgt 6y ago
    Agreed. And I suppose that's okay to some extent, one just has to be very careful with your investments and maybe not exceed 10% for experiments like those.
- CaptArmchair 6y ago
  I think there's a vast difference in what you expert from Wall Street compared to Main Street. Investing in a portfolio and watching a candles comes with one very singular yet very clear expectation. Those candles moving in ways that's favourable to you and yielding an unrefined monetary return. Investing in Main Street? You would do that for a multitude of very different reasons or personal reasons. For instance, that coffee place down town is where you meet up with your friends, or you have fond memories of that place because you met your spouse there a decade ago. The value of a funeral parlour would be that the entire local community, at one point or another, will get into touch with them. Hairdresser? Corona forces me to do my hair at home, but as soon as I can, I'll go back to my hairdresser where you'd have the banter and the relaxing atmosphere while you get treated. So, the idea of investing in new main street businesses isn't because they fulfil a simple, crude financial return. It would be because you expect them to flourish and add a wide range of intangible values and a unique identity to a local community, which you'd be hard pressed to find in one-size-fit-all chains of stores and services. Put more succinctly, sure, you could invest in Starbucks on the stock market. But if you've been to one of their venues, you've pretty much seen them all. Which is the opposite for an independent coffee place where the owner went out on a limb to add their own unique touches and has build up their own specific clientele.
alecco 6y ago
Is it me or are most emotional appeals? I was expecting some charts or spreadsheets showing why it would be a good investment.
- ceilingcorner 6y ago
  ‘Good investment’ also includes ‘creates a desirable urban space which increases livability and encourages further economic development.’ This obsessive narrow focus on strict financial gains is part of the problem.
  - drelihan 6y ago
    For those looking to make a good investment to “create a desirable urban space”, there are many ways to donate to non-profit (museums, theaters, local schools, libraries, co-ops, etc) to achieve that. A coffee shop, or even funeral home, could set itself up as a non-profit, with the employees and managers making market salaries but relying on community donations, in addition to community business, to keep the place going if needed. For businesses who set themselves up as for-profit, or those who wish to invest in for-profit businesses, a return on capital is required for those systems to work. Investors may accept a lower return on their money in a local business compared to one they will never see, but there is absolutely nothing wrong with making sure there is a investment return. Otherwise, how do you suppose the next business gets funded?
SambaSambaSamba 6y ago
I used to work with your co-founder Felix. The idea isn't bad, but this feels like a direct copy of the company where we worked, StreetShares. They had the exact same "Main Street" theme an overused it a bit. The "About" page used to list the employees' favourite main street in their synopses. Even the homepage is surprising similar. The main difference seems to be the stock photos. So are there any differences in your product and SS? I assume the tech stack is much better. SS made me want to vomit. I guess this is an SS clone without the military focus? SS wasn't an original idea either, but at least they tried to put a spin on it. This just feels like blatant rip off
- rwmj 6y ago
  There's nothing wrong with taking an idea and trying to do it better.
  - SambaSambaSamba 6y ago
    There's a fine line between trying to improve an idea and cheap knock-offs and stealing an ideas and identities. Uber and Lyft are very similar, but at least they could be differentiated. Lyft had tips at the start. The apps, sites, UX, colour scheme, etc... were still noticeably different despite offering the same product. Also it's a little different when you work at one company, leave, and then a year later you copy their same product with little change and 0 attempt to establish your own brand.
    - rwmj 6y ago
      Are you asserting that he copied code or graphics, or took existing customers with him? If not, then there's still nothing wrong. It's competition, it's how it works.
      - SambaSambaSamba 6y ago
        It is still worth pointing out as it is a little shady, even if it isn't illegal. In some ways it is similar to SlideBelt and how MissionBelt essentially stole their product. Except in that case I believe it was a family relation and not a professional relation. In this case, we have businesses asking for money. What if the founders decide they like one of the bids? They could hide/remove the bid and then steal the business idea and use their connections, which the struggling business likely doesn't have, to steal the idea. Would you really trust these people?
OliverJones 6y ago
It takes a lot of self-confidence for a small business person to issue revenue notes. They aren't profit notes; they come off the top line not the bottom line. So if the business goes through a cycle of loss-making this kind of debt can turn into a way to "fail fast." Then everybody loses. Hopefully a small business considering this kind of loan can get some free advice from somebody like https://score.org/ https://score.org/ before they get in too deep. I know I'd recommend that before I made that kind of investment.
- LatteLazy 6y ago
  Yeah, but revenue figures are much harder to manipulate than "profits"...
- Spooky23 6y ago
  Good point. The people who need this are the people least able to handle it. Many sole proprietor businesses get in trouble with sales tax collections when they try to juggle accounts with cash flow problems. Adding a loan product like this... ouch.
  - OliverJones 6y ago
    Yes, and sales tax authorities have zero tolerance for not making those remittances. THAT's a way to fail REALLY fast involving government padlocks on the front door.
- notahacker 6y ago
  Looks like the revenue shares are small percentage wise, although I guess many of them aren't high margin businesses either. Of course it also looks like some of the businesses are forecasting short term losses bigger than their current fundraising ask.
drelihan 6y ago
Was expecting more info on how repayment works thru the revenue sharing notes - not clear what percentage of revenue a business is agreeing to pay or how much teeth these notes actually have. I would expect most of these “investments” to end in a almost complete write downs. Could be a great funding alternative if the details / investor protections were fleshed out. I personally would not touch any of these until then.
capableweb 6y ago
"Invest in Main Street, not Wall Street." doesn't really tell me anything. Why would I be interested to only invest in business located at one street in some city in the US? Wall Street I understand to be the "business/finance" neighborhood of the US, is Main Street something similar to that but for "normal" businesses? Seems like a weird tagline, but could also be that I'm missing something as I don't live in the US.
- m3kw9 6y ago
  Is just a name, but you are really investing in a single store. Like a coffee shop. But investing in retail now have a lot of risks
  - capableweb 6y ago
    Apparently it's not just a name but a specific name that (every?) US cities has for their street where it's mostly businesses located. Don't think we have any equivalent in Europa, closes would be the main plazas I guess.
    - microcolonel 6y ago
      For what it's worth, though almost every North American city I've visited has a Main street, and all of them appear to have small businesses on them, they are often not the street with the most small businesses. For example, in Toronto, there is a Main Street, but it's a North-South route north from The Beaches, rather than downtown, so King St. and Queen St, which are East-West, naturally have far more small businesses because they run through more of the downtown.
      - capableweb 6y ago
        Sorry if my comment was unclear, I didn't want imply that Main Street is the street with "most small businesses" but that Main Street itself consists "mostly of small businesses", compared to streets with residencies or mixed usage.
- 6y ago
machinehermit 6y ago
Ya'll can put your money in exotic parrot stores and funeral homes. I will stick with the Nasdaq 100.
- hckr_news 6y ago
  What about a local deli or grocery?
ianmabie 6y ago
I know Nick, Bob, and Strader from early Uber Boston days - they are great people and very hard workers. I'm really happy to see ex-Uber folks going after an opportunity to strengthen local communities vs. so many others who tried to hop on the next scooter / marketplace / fintech 'rocketship' I don't know enough about the investment model they support, but any company that is trying to help grow important community businesses like Great Scott in Allston deserves attention. I also thought Nick's message on internal diversity was one of the better takes (blunt & honest) I'd seen from a CEO: https://medium.com/@nick_97468/our-team-is-all-white-and-its-not-ok-fbde6e3145df https://medium.com/@nick_97468/our-team-is-all-white-and-its... Wish them the best of luck!
bananaquant 6y ago
At first I misread the name as "Malinvest". Funny enough, the website is set up to encourage exactly that. You have to pick a business based on a short description and some social media profiles. Some of the listings have a business plan or a slide deck, but none present an audited financial statement. Then there is a mysterious metric called "investment multiple". It seems to be a 6.5-year ROI. When you break it down, it boils down to 3.5-8.5% return per year on the money you lend them. However, the payment schedule is unspecified, and it is not exactly clear what recourse do you have if things go under. A bank would never provide a business loan on such terms.
- chii 6y ago
  > A bank would never provide a business loan on such terms. and that's why this is trying to find retail investors to invest. Good investment deals are almost never public, and will always be taken by those close to the deal.
nmathews 6y ago
We built MainVest to allow small businesses to raise capital from their community and let people vote with their wallet to drive economic growth, while getting potential returns priced on average in the 10%-20% IRR range. One of the largest drivers of success on the platform is the social underwriting that goes into successfully funded campaigns, resulting in the asset class to date performing well, even against what would be fair to call the largest existential threat to small business in most of our lifetimes. We're happy to answer any questions people may have about the small business landscape and how these investments are structured and can perform. Reach out! Nick@MainVest.com

46 points by apsec112 6y ago

with you know what on everyone's minds, I'm interested in investing in the funeral home on the front page. Seems like a pretty stable place to put one's money regardless.

Xunxi 6y ago
Non accredited investments or equity crowdfunding is very risky. Do your your diligence before you part with your money. I also thought this was weird, "Mizen will also showcase local art, host a weekly support group for veterans, and offer conference rooms to be used by local nonprofits." I wasn't aware of conferences in funeral homes.
- jrockway 6y ago
  Equity crowdfunding is always something that's sounded interesting to me on the surface. Right now crowdfunding is just pre-ordering something with a 0.01% chance of actually getting the thing you've ordered. (I've crowdfunded 3 things in my life. All 3 things failed and I lost everything! But... this is maybe $100 total so I'm not out too much ;) Getting some equity in the business always made more sense to me. Sure, I want the thing, but for the amount of risk I'm taking on, I want a percentage of your company and future profits!
- julianlam 6y ago
  Neither am I, but I imagine that's part of the overall vision, that this isn't to be a stuffy funeral home of old, but a new fancy-pants one where you can look at art, rent out rooms, and such, in addition to honouring the dead.
WJW 6y ago
You should do what you want with your money, but it is wise to do your research: - It was founded in September 2019, but has not even acquired a lease on a suitable location yet. - The presentation states they will use the money raised to take over an existing funeral home, but the "risks" section in the data room says it "is a newly established entity and has no history for prospective investors to consider." If they are taking over an existing funeral home, surely the numbers from that funeral home would be available. - Later on in the presentation slides on the first place, they state that the funeral home they are looking to take over has about 200k revenue forecasted for FY2020. On the data room "financial forecasts" section projected revenue for year 1 is almost double that at 380-390k. Also despite the funeral home presumably existing for some time already, they think they'll be able to grow revenues almost 50% in 2-3 years. - The president has over 20 years experience in death care which is nice. The vice president seems to be his wife and is currently working as a dental assistant. - The risks include that they might not have sufficient accounting controls in place (!). You won't even know if they are doing well or not. - They offer "guaranteed" (provided they still exist in 2026) return of $1800 on 1/1/2026 on $1000 invested. That is an annualized ROI of more than 11%. That they are offering interest rates this high means that all the providers of lower interest rates have rejected them. A highly speculative startup in electric scooters here in Amsterdam recently offered 8% and that was more than enough to get enough interested investors. You should ask yourself why they are offering such high interest rates and what it means for the (perceived by the market) chances of them not existing in 2026 to pay back your money. To summarize: there are a number of "red flags" that warrant extreme caution.

ethhics 6y ago

This is an excellent idea, though perhaps too much like crowdfunding. There’s an early bird bonus that bumps your ROC—for instance, helping float a parrot store through COVID as one of the first X dollars can push me from 30% to 50% returns (both over 7 years). Also, considering the uptick in cases over the past week, the timing of investing in small businesses seems suspect.

sgt 6y ago

Do people actually expect better returns from investing in local businesses like these (notorious for coming and going) over say the stock market?

malux85 6y ago
I had a friend who contacted me recently, and sent me a blockchain startup “to review” I said - did you buy these because it was a friend of yours, or do you expect them to increase in value over time? Or some other reason? She said “I don’t know why I purchased these, I purchased them without understanding it” Sooooooo there’s your answer. The level of analysis that average people do on investments is near zero or zero
- sgt 6y ago
  Agreed. And I suppose that's okay to some extent, one just has to be very careful with your investments and maybe not exceed 10% for experiments like those.
CaptArmchair 6y ago
I think there's a vast difference in what you expert from Wall Street compared to Main Street. Investing in a portfolio and watching a candles comes with one very singular yet very clear expectation. Those candles moving in ways that's favourable to you and yielding an unrefined monetary return. Investing in Main Street? You would do that for a multitude of very different reasons or personal reasons. For instance, that coffee place down town is where you meet up with your friends, or you have fond memories of that place because you met your spouse there a decade ago. The value of a funeral parlour would be that the entire local community, at one point or another, will get into touch with them. Hairdresser? Corona forces me to do my hair at home, but as soon as I can, I'll go back to my hairdresser where you'd have the banter and the relaxing atmosphere while you get treated. So, the idea of investing in new main street businesses isn't because they fulfil a simple, crude financial return. It would be because you expect them to flourish and add a wide range of intangible values and a unique identity to a local community, which you'd be hard pressed to find in one-size-fit-all chains of stores and services. Put more succinctly, sure, you could invest in Starbucks on the stock market. But if you've been to one of their venues, you've pretty much seen them all. Which is the opposite for an independent coffee place where the owner went out on a limb to add their own unique touches and has build up their own specific clientele.

alecco 6y ago

Is it me or are most emotional appeals? I was expecting some charts or spreadsheets showing why it would be a good investment.

ceilingcorner 6y ago
‘Good investment’ also includes ‘creates a desirable urban space which increases livability and encourages further economic development.’ This obsessive narrow focus on strict financial gains is part of the problem.
- drelihan 6y ago
  For those looking to make a good investment to “create a desirable urban space”, there are many ways to donate to non-profit (museums, theaters, local schools, libraries, co-ops, etc) to achieve that. A coffee shop, or even funeral home, could set itself up as a non-profit, with the employees and managers making market salaries but relying on community donations, in addition to community business, to keep the place going if needed. For businesses who set themselves up as for-profit, or those who wish to invest in for-profit businesses, a return on capital is required for those systems to work. Investors may accept a lower return on their money in a local business compared to one they will never see, but there is absolutely nothing wrong with making sure there is a investment return. Otherwise, how do you suppose the next business gets funded?

SambaSambaSamba 6y ago

I used to work with your co-founder Felix. The idea isn't bad, but this feels like a direct copy of the company where we worked, StreetShares. They had the exact same "Main Street" theme an overused it a bit. The "About" page used to list the employees' favourite main street in their synopses. Even the homepage is surprising similar. The main difference seems to be the stock photos. So are there any differences in your product and SS? I assume the tech stack is much better. SS made me want to vomit. I guess this is an SS clone without the military focus? SS wasn't an original idea either, but at least they tried to put a spin on it. This just feels like blatant rip off

rwmj 6y ago
There's nothing wrong with taking an idea and trying to do it better.
- SambaSambaSamba 6y ago
  There's a fine line between trying to improve an idea and cheap knock-offs and stealing an ideas and identities. Uber and Lyft are very similar, but at least they could be differentiated. Lyft had tips at the start. The apps, sites, UX, colour scheme, etc... were still noticeably different despite offering the same product. Also it's a little different when you work at one company, leave, and then a year later you copy their same product with little change and 0 attempt to establish your own brand.
  - rwmj 6y ago
    Are you asserting that he copied code or graphics, or took existing customers with him? If not, then there's still nothing wrong. It's competition, it's how it works.
    - SambaSambaSamba 6y ago
      It is still worth pointing out as it is a little shady, even if it isn't illegal. In some ways it is similar to SlideBelt and how MissionBelt essentially stole their product. Except in that case I believe it was a family relation and not a professional relation. In this case, we have businesses asking for money. What if the founders decide they like one of the bids? They could hide/remove the bid and then steal the business idea and use their connections, which the struggling business likely doesn't have, to steal the idea. Would you really trust these people?

OliverJones 6y ago

It takes a lot of self-confidence for a small business person to issue revenue notes. They aren't profit notes; they come off the top line not the bottom line. So if the business goes through a cycle of loss-making this kind of debt can turn into a way to "fail fast." Then everybody loses. Hopefully a small business considering this kind of loan can get some free advice from somebody like https://score.org/ https://score.org/ before they get in too deep. I know I'd recommend that before I made that kind of investment.

LatteLazy 6y ago
Yeah, but revenue figures are much harder to manipulate than "profits"...
Spooky23 6y ago
Good point. The people who need this are the people least able to handle it. Many sole proprietor businesses get in trouble with sales tax collections when they try to juggle accounts with cash flow problems. Adding a loan product like this... ouch.
- OliverJones 6y ago
  Yes, and sales tax authorities have zero tolerance for not making those remittances. THAT's a way to fail REALLY fast involving government padlocks on the front door.
notahacker 6y ago
Looks like the revenue shares are small percentage wise, although I guess many of them aren't high margin businesses either. Of course it also looks like some of the businesses are forecasting short term losses bigger than their current fundraising ask.

drelihan 6y ago

Was expecting more info on how repayment works thru the revenue sharing notes - not clear what percentage of revenue a business is agreeing to pay or how much teeth these notes actually have. I would expect most of these “investments” to end in a almost complete write downs. Could be a great funding alternative if the details / investor protections were fleshed out. I personally would not touch any of these until then.

capableweb 6y ago

"Invest in Main Street, not Wall Street." doesn't really tell me anything. Why would I be interested to only invest in business located at one street in some city in the US? Wall Street I understand to be the "business/finance" neighborhood of the US, is Main Street something similar to that but for "normal" businesses? Seems like a weird tagline, but could also be that I'm missing something as I don't live in the US.

m3kw9 6y ago
Is just a name, but you are really investing in a single store. Like a coffee shop. But investing in retail now have a lot of risks
- capableweb 6y ago
  Apparently it's not just a name but a specific name that (every?) US cities has for their street where it's mostly businesses located. Don't think we have any equivalent in Europa, closes would be the main plazas I guess.
  - microcolonel 6y ago
    For what it's worth, though almost every North American city I've visited has a Main street, and all of them appear to have small businesses on them, they are often not the street with the most small businesses. For example, in Toronto, there is a Main Street, but it's a North-South route north from The Beaches, rather than downtown, so King St. and Queen St, which are East-West, naturally have far more small businesses because they run through more of the downtown.
    - capableweb 6y ago
      Sorry if my comment was unclear, I didn't want imply that Main Street is the street with "most small businesses" but that Main Street itself consists "mostly of small businesses", compared to streets with residencies or mixed usage.
6y ago

machinehermit 6y ago

Ya'll can put your money in exotic parrot stores and funeral homes. I will stick with the Nasdaq 100.

hckr_news 6y ago
What about a local deli or grocery?

ianmabie 6y ago

I know Nick, Bob, and Strader from early Uber Boston days - they are great people and very hard workers. I'm really happy to see ex-Uber folks going after an opportunity to strengthen local communities vs. so many others who tried to hop on the next scooter / marketplace / fintech 'rocketship' I don't know enough about the investment model they support, but any company that is trying to help grow important community businesses like Great Scott in Allston deserves attention. I also thought Nick's message on internal diversity was one of the better takes (blunt & honest) I'd seen from a CEO: https://medium.com/@nick_97468/our-team-is-all-white-and-its-not-ok-fbde6e3145df https://medium.com/@nick_97468/our-team-is-all-white-and-its... Wish them the best of luck!

bananaquant 6y ago

At first I misread the name as "Malinvest". Funny enough, the website is set up to encourage exactly that. You have to pick a business based on a short description and some social media profiles. Some of the listings have a business plan or a slide deck, but none present an audited financial statement. Then there is a mysterious metric called "investment multiple". It seems to be a 6.5-year ROI. When you break it down, it boils down to 3.5-8.5% return per year on the money you lend them. However, the payment schedule is unspecified, and it is not exactly clear what recourse do you have if things go under. A bank would never provide a business loan on such terms.

chii 6y ago
> A bank would never provide a business loan on such terms. and that's why this is trying to find retail investors to invest. Good investment deals are almost never public, and will always be taken by those close to the deal.

nmathews 6y ago

We built MainVest to allow small businesses to raise capital from their community and let people vote with their wallet to drive economic growth, while getting potential returns priced on average in the 10%-20% IRR range. One of the largest drivers of success on the platform is the social underwriting that goes into successfully funded campaigns, resulting in the asset class to date performing well, even against what would be fair to call the largest existential threat to small business in most of our lifetimes. We're happy to answer any questions people may have about the small business landscape and how these investments are structured and can perform. Reach out! Nick@MainVest.com