Mid-Year Report: Reg CF and Reg A+ Insights from H1 2024

CHART OF THE WEEK 📈

By Brian Belley | Read

In the first half of 2024, $306 million was invested through Reg CF and Reg A+. We continue to see several interesting trends in the regulated investment crowdfunding markets. Whether it's the continued outperformance of Reg CF vs. Reg A+ investments, seeing more mature companies raising capital under Reg CF, and the continued strong performance of the same group of top funding platforms, we can glean some key insights from the data in the first half of the year.

• Reg CF investments continue to outpace Reg A+ investments (excluding Reg A+ real estate and fractional collectible offerings): despite the $5 million vs. $75 million cap on Reg CF and Reg A+ respectively, Reg CF saw $192 million invested in the first half of 2024 compared to $113 million for Reg A+.

• Debt and revenue share offerings continue to attract fewer investment dollars than equity offerings as a whole, seeing 10.0% ($30.5 million) of all online investments in H1-2024, compared to equity deals attracting $275.6 million in investments.

• Dealmaker Securities was the top platform for Reg CF and A+ equity raises ($101.9 million), while Wefunder took the top spot for debt raises ($6.0 million). The complete breakdown of top Reg CF and Reg A+ platforms for the first half of 2024 is covered in the full article.

• The top industry for equity raises continues to be the capital-intensive Energy, Power & Natural Resources industry ($73.5 million in investments), while the Media, Entertainment & Publishing industry saw the most invested ($9.9 million) for debt deals.

• Overall online investment volume saw a ~9% decline in the first half of 2024 compared to the same period in 2023.

To see the full deep-dive analysis including more charts on the top raises, valuation trends, and top platforms of 2024, read the full article here.

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PITCH REVIEW 💸

By Teddy Lyons \ Deal Report

Brief: Project Buffalo is an opportunity to participate in a private-equity deal through Wefunder through a shell company. Project Buffalo is acquiring a Midwest-based manufacturing partner that serves America's largest mining, iron, and steel manufacturing sites. The company specializes in engineering, sourcing, and delivering essential products to ensure the continuous operation of steel mills across the United States. The primary customers of Project Buffalo are major steel manufacturers who rely on the company for critical materials and parts necessary for their day-to-day operations.

Key People: Heading up this acquisition is Adam Selman, a managing director of private-equity firm Novastone Capital Advisors. He has held management operations roles at companies like Victrex (Global Marketing), Covestro (Global Product Manager), Vastly Different Solutions (Product Manager), and Asal Industries (Management Consultant). As is typical with private equity investors, Adam will be extremely hands-on with running the acquired company and be responsible for its success.

Private Equity vs Startup Investing: Project Buffalo is an opportunity for investors to gain exposure to private equity-type returns (projected 25%-40% IRR) within 5 years. This is quite different from startup investing, which typically requires a 7-10 year time horizon and returns are expected to be 10X or higher. Of course, 8 out of 10 startups ultimately fail, whereas the private equity model relies on investing in very large established companies and modest but safer returns.

Summary

Here's what we like: The U.S. steel industry, with a market size of $69.2 billion, offers significant opportunities for companies that can effectively meet the operational demands of major steel manufacturers. The company that Project Buffalo will be acquiring has clearly shown its ability to deliver high quality machinery and parts to America’s largest steel manufacturers, and has a strong foothold in the market. Additionally, Novastone Capital Advisors, who will be managing the acquired company, is also investing $250K into this deal, and will be properly incentivized to grow the company effectively.

Here's what we don't: This type of private equity deal is brand new to the equity crowdfunding market and remains to be seen whether it is an appropriate addition to a startup portfolio for retail investors. Additionally, given the high degree of confidentiality present in private equity deals, retail investors do not actually know what the name of this company is unless an NDA is signed (which the company is offering retail investors to do).

LAST WEEK’S POLL RESULTS

Would you invest in Athyna?

🟩🟩🟩🟩🟩🟩 👍 (31)

🟨🟨🟨⬜️⬜️⬜️ 👎 (13)

44 Votes

STAFF PICKS 🌶️

StemBioSys

A biomedical company that uses advanced cell technologies to test drugs more efficiently and accurately without using animal models. StemBioSys is innovating drug testing with patented lab tools and allows the testing of new products with cultured human cells and not from embryos or animal models. The pioneering products of StemBioSys include CELLvo Atrial Cardiomyocytes and Matrix Plus, and are used in biopharmaceutical, academic, and government markets.

• Pre-Money Valuation: $42 million

• Minimum Investment: $300

SwingVision

The company has developed the technology to track 3D objects in any sport. SwingVision uses its patented technology to assist in generating automated stats and highlights and officiating. The platform has more than 15,000 paying subscribers, 100 D1-D3 college teams, and more than $2.5 million in annual recurring revenue.

• Valuation Cap: Uncapped

• Minimum Investment: $100

Betweened

They developed a platform for worry-free family entertainment from trusted industry experts. Betweened is carefully crafted to ensure safety and foster lifelong mindful media habits among teens and deliver expertly-curated short-form video content specifically for kids between the ages of 4 and 13. The platform reported a 24.5% average monthly growth in users in 2024 and has been featured in TechCrunch Startup Battlefield.

• Valuation Cap: $5 million

• Minimum Investment: $100