How Founders' Shared Experiences Shape Startup Outcomes

CHART OF THE WEEK 📈

• Companies with multiple founders are often attractive to investors, particularly if they have complementary skill sets or have previous experience together.

• In today’s Chart of the Week, we take a look at companies in the equity crowdfunding landscape that have founders with shared prior experience together.

• This can be anything from being related, married, or working together at a prior company or on a previous startup.

• Interestingly enough, we find that companies with shared founder experience demand higher valuations, with the average valuation at $61 million. However, when looking at the median, we see that the valuations are identical at $15 million.

• Similarly, when looking at the average amount raised, we see that companies with shared founder experience raise slightly more on average at around $559,000. Again, when comparing the medians, we see that they are very similar.

• Overall, when looking at the medians, valuation and amount raised seem to be pretty identical for companies with shared founder experience vs. no shared founder experience.

Together with Republic

As a member of Kingscrowd, you’re the exact sort of person we’re looking for to take part in a special new initiative.

The level of access it provides is simply extraordinary. 

• Connections to the best dealmakers from across Republic, the teams behind our top valuation wins  –75X in five years, 100X in four years, even up to 332X in seven years.   

• Special briefings from these experts on developments in a fast-growing sector.

• Direct founder pitches and Q&A sessions.

• Previously out-of-reach deals for a small stake of $100, $200 or $500 – not the typical $50,000, $100,000, or $250,000.

• No upfront fees, ensuring every dollar goes directly to your investment in the startup.   

• No carried interest, thanks to the type of deal we’re featuring.  

 This short video recaps every one of these benefits and more.

P.S. - We’re getting in early here.  Most startups won’t make it.  That’s why you should never invest more than you’re willing to lose.  And according to Power Law, just the top 10% will drive your returns.

PITCH REVIEW 💸

Brief: FuelGems is pioneering in the global transportation industry with its fuel additive, addressing fuel efficiency and environmental impact. Its nanotechnology-based additive, requiring just 5 grams to treat 260 gallons of fuel, offers significant cost-effectiveness and up to 1000% ROI. This innovation not only saves money but also cuts greenhouse gas emissions by 50% and improves engine performance. It’s raising $3M with a valuation cap of $17.5M and a minimum investment of $100.

Key People: FuelGems is spearheaded by CEO Kirill Gichunts, who brings 12 years of relevant industry experience. Gichunts has a proven track record in the industry, having previously raised $100 million for other companies and successfully navigating the exit of Infreeda Inc. His experience is further validated by his long experience in several venture capital, investment banking, and M&A positions. Right before founding FuelGems, Gichunts co-founded H2 Energy Renaissance.

Interested in FuelGems? Access the deal report HERE 🔓📈

Summary

Here's what we like: FuelGems offers a patented nanotechnology fuel additive that significantly enhances the cleanliness and performance of various fuels, including diesel, gasoline, and biofuel. FuelGems' additive reduces greenhouse gas emissions by up to 50% and increases engine and fuel pump lubrication, contributing to the longevity and reliability of vehicles and machinery.

With the burgeoning demand for more environmentally friendly fuel solutions, FuelGems' potential market impact is substantial. The company's numerous pilots demonstrate both the market need and the potential for rapid scalability. The global market for these additives is valued at approximately $9.76 billion and is projected to grow at a compound annual growth rate (CAGR) of 8.6%. But FuelGems's sustainable niche should grow even faster.

Additionally, FuelGems has attracted notable investors, including Ray Family Company Holdings and venture capital from Moneyus Capital, and participated in the Sputnix ATX accelerator, signaling confidence from seasoned investors in the company's direction and management team led by founder Kirill Gichunts.

Here's what we don't: Bearing in mind the highly competitive marketplace in which FuelGems operates, with established players like Chevron and Amsoil, the company's pre-revenue status presents considerable risk to potential investors. Moreover, the company's claim of an immediate pipeline of $70 million in revenue and demand from 50 companies, while promising, lacks substantiation through actual sales or binding agreements. The company already claimed to have a $50 million pipeline in 2020 but still didn't generate revenues.

The specialty fuel additives market is competitive and deeply entrenched with customer loyalties and long-term contracts. This scenario presents significant barriers to entry for new entrants like FuelGems. Convincing customers to switch to a new product can be a slow and costly process, requiring extensive marketing and sales efforts.

The capital intensity of the company's product accentuates the financial risks involved. Without a clear indication of when the company will move beyond the pre-revenue phase and start generating profits, the path to financial sustainability appears challenging. 

ON THE POD 🎙️

Chris sits down with Dan Rutstein, President of Orange County Soccer Club (OCSC). With his diverse background spanning journalism, diplomacy, and technology, Rutstein brings a unique perspective to leading a soccer club. He discusses the club's journey in the United Soccer League (USL), its strategies for player development, and its success in fostering a strong, community-oriented fan base. The conversation also covers the club's approach to navigating the complexities of soccer in the U.S., including TV deals and the potential for growth in the sport.

Listen to the full episode here

STAFF PICKS 🌶️

Kidcaboo

Kidcaboo offers a trusted rideshare solution for children, addressing the transportation challenges faced by working parents. With driving nannies and safety-focused technology, the service ensures secure and comfortable rides for children, supporting busy family schedules. The company boasts a 96% repeat client rate and anticipates $300,000 in revenue for 2024.

• Valuation Cap: $12 million

• Minimum Investment: $250

Peaceful Bend Vineyard (Debt)

Peaceful Bend Vineyard is a cherished winery and meadery in Steelville, Missouri. Renowned for its quality products and hospitality, the vineyard offers not just wines but also an eatery, beer options, events, and picturesque scenery. Specializing in small-batch wines and beers with expertly blended flavors, Peaceful Bend was established by Clyde Gill and Katie Nott in 1998.

• Interest Rate: 13%

• Minimum Investment: $100

SweatPals

SweatPals connects fitness enthusiasts and communities. The platform fosters social networks through shared fitness interests and allows fitness leaders to monetize through features like group chats and ticketing. With 40,000 members, SweatPals facilitated 8,000 events and 450 communities, attracting 83,000 attendees in its first year.

• Valuation Cap: $15 million

• Minimum Investment: $200