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No one in their right mind wants to build a pseudo-investment company dealing with tons of small investors in the few hundreds of dollars to few thousands of do

No one in their right mind wants to build a pseudo-investment company dealing with tons of small investors in the few hundreds of dollars to few thousands of dollars range. The only thing missing here is a crypto coin. If they really have a business model that can yield 8+% annual, assuming they get a cut, then they would raise real capital and not deal with randos. They don’t.

yepnopemaybe 4y ago
We will never work with crypto because we care about our investors and don't intend on defrauding them. There are plenty of small retail investing companies that deal with small account sizes. Acorns, Robinhood, etc. come to mind. Over time, I'd hope that our average account size would be in the 10K+ range, but depending on CAC, small dollar would be fine. Our innovation here is investment UX. The realized return might be a point or two north or south of 8% depending on the risk profile we go with - not far off course for the industry. Our current accredited investors get about 10%, but that's with tax equity incentives we might not be able to pass to retail investors. We will be 100% transparent about our pricing model.
- chiefalchemist 4y ago
  I'm ~20 pages from finishing the book "Local Dollar, Local Sense" by Michael Shuman. Your approach is refreshing and creative yet (I presume) SEC compliant. Kudos for letting the unaccredited have an influence on the future too. https://m.youtube.com/watch?v=Q9WkwIX2MHA https://m.youtube.com/watch?v=Q9WkwIX2MHA
qiqitori 4y ago
There's quite a few companies doing this where I live (Japan), e.g., https://change-x.jp/equipment https://change-x.jp/equipment. One important clause I saw was that the ownership of the panels automatically transfers back to the operating company after the panel's useful lifespan (defined to be 20 years). I also saw an example that originally did small investors but then at some point found a large investor, but can't remember their name at the moment. Similarly, what do you think about the fact that solar panel manufacturers and all inbetweeners could "just" build their own power plants rather than sell to individuals?
- Ekaros 4y ago
  Solar panel companies are in business of making the panels, wholesalers are in wholesaling business, those who install are in installation business. Each setup to be somewhat optimal in their own segment. This just looks like extra costs for actual running of sola plant. Compared to straight up existing structures for funding.
throwaway2037 4y ago
I think they only need a return on equity that is similar to residential (rental) real estate. For many places, that is 2-5% after taxes.
joshvm 4y ago
P2P lending is a thing, and was quite popular in the UK until most of the big players (e.g. Zopa) went private. You can invest a small amount, usually as low as $100 and it goes either to personal or business loans. There are companies that offer both. Usually they'll offer automatic diversification, so every $10 goes to a different investment. Your point is valid though. These places typically lend to companies that would struggle to get loans from banks. While I've worked for legitimate places that had this problem, you do need to ask why these places need crowdfunding. A lot of them are sole proprietors who want to start e.g. a food company. So it's still up to you as an investor to understand the risk and to go through company financials before lending. With personal loans you usually get details of default rates, etc.
Animats 4y ago
The only thing missing here is a crypto coin. There's a "wallet". They keep your returns until you ask for them and get them to pay out. If you're really buying a solar panel, you're buying a depreciating asset. Someday the solar panel will wear out and your investment is gone. So the return has to cover the amount invested. An annual percentage rate is not the way to evaluate this. What you buy does not seem to be resellable. It looks like you're stuck with it for the life of the hardware. Who audits this thing? This is almost exactly the classic situation in SEC vs. Howey, where investors bought trees in an orange grove. So this is probably an unregistered public offering.

yepnopemaybe 4y ago

We will never work with crypto because we care about our investors and don't intend on defrauding them. There are plenty of small retail investing companies that deal with small account sizes. Acorns, Robinhood, etc. come to mind. Over time, I'd hope that our average account size would be in the 10K+ range, but depending on CAC, small dollar would be fine. Our innovation here is investment UX. The realized return might be a point or two north or south of 8% depending on the risk profile we go with - not far off course for the industry. Our current accredited investors get about 10%, but that's with tax equity incentives we might not be able to pass to retail investors. We will be 100% transparent about our pricing model.

chiefalchemist 4y ago
I'm ~20 pages from finishing the book "Local Dollar, Local Sense" by Michael Shuman. Your approach is refreshing and creative yet (I presume) SEC compliant. Kudos for letting the unaccredited have an influence on the future too. https://m.youtube.com/watch?v=Q9WkwIX2MHA https://m.youtube.com/watch?v=Q9WkwIX2MHA

qiqitori 4y ago

There's quite a few companies doing this where I live (Japan), e.g., https://change-x.jp/equipment https://change-x.jp/equipment. One important clause I saw was that the ownership of the panels automatically transfers back to the operating company after the panel's useful lifespan (defined to be 20 years). I also saw an example that originally did small investors but then at some point found a large investor, but can't remember their name at the moment. Similarly, what do you think about the fact that solar panel manufacturers and all inbetweeners could "just" build their own power plants rather than sell to individuals?

Ekaros 4y ago
Solar panel companies are in business of making the panels, wholesalers are in wholesaling business, those who install are in installation business. Each setup to be somewhat optimal in their own segment. This just looks like extra costs for actual running of sola plant. Compared to straight up existing structures for funding.

throwaway2037 4y ago

I think they only need a return on equity that is similar to residential (rental) real estate. For many places, that is 2-5% after taxes.

joshvm 4y ago

P2P lending is a thing, and was quite popular in the UK until most of the big players (e.g. Zopa) went private. You can invest a small amount, usually as low as $100 and it goes either to personal or business loans. There are companies that offer both. Usually they'll offer automatic diversification, so every $10 goes to a different investment. Your point is valid though. These places typically lend to companies that would struggle to get loans from banks. While I've worked for legitimate places that had this problem, you do need to ask why these places need crowdfunding. A lot of them are sole proprietors who want to start e.g. a food company. So it's still up to you as an investor to understand the risk and to go through company financials before lending. With personal loans you usually get details of default rates, etc.

Animats 4y ago

The only thing missing here is a crypto coin. There's a "wallet". They keep your returns until you ask for them and get them to pay out. If you're really buying a solar panel, you're buying a depreciating asset. Someday the solar panel will wear out and your investment is gone. So the return has to cover the amount invested. An annual percentage rate is not the way to evaluate this. What you buy does not seem to be resellable. It looks like you're stuck with it for the life of the hardware. Who audits this thing? This is almost exactly the classic situation in SEC vs. Howey, where investors bought trees in an orange grove. So this is probably an unregistered public offering.