Preferred or Common: Unpacking 2023's Most Popular Reg CF Equity Choices

CHART OF THE WEEK 📈

Founders can offer investors several different security types when launching a raise. These include common equity, preferred equity, SAFEs, and convertible notes. Equity represents ownership in a company, but different types of equity can offer different advantages. This week, we compared the number of preferred equity offerings to the number of common equity offerings in 2023.

• Of the 420 raises offering equity this year, 19% or 80 offered preferred equity.

• Preferred equity has some unique advantages. For example, preferred equity owners may have a liquidation preference. If a company liquidates, owners of preferred equity may have payout priority over those who own common equity.

• Common equity made up 81% of equity raises thus far in 2023. While common equity does not afford investors the same rights as preferred equity, it does come with an ownership stake.

• Though preferred equity is often ideal amongst investors and mitigates some risks of investing, preferred equity raises are far less common.
  

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PITCH REVIEW 💸

Brief: Mate Fertility is democratizing fertility care in the U.S., aiding OBGYNs in launching affordable services. Their IVF services are 30% less expensive than traditional clinics. It’s currently raising $1,235,000 at a valuation of $25M with a minimum investment of $1,000.

Key People: Co-founder & founding CEO, Gabriel Bogner (you can read his Founder Profile here), CEO Traci Keen, medical advisor Sara Vaughn, COO Gary Kliegman (was the COO of Candid for four years, a company focused on orthodontic healthcare.)

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Summary

Here's what we like: Mate Fertility's unique approach of supporting OBGYN's willingness to open fertility clinics sets it apart from traditional fertility services. By upskilling OBGYNs, they can provide expert and affordable fertility care, democratizing access to individuals and couples nationwide.

Mate Fertility has already demonstrated promising growth with three locations and a pregnancy rate that surpasses the national average by 20%. It is opening two new locations that should be running by the end of the year.

The US fertility market presents a high market potential due to the increasing amount of people trying to get pregnant in their thirties and the overall surge of infertility problems in the population. Mate Fertility's scalable business model is well-positioned to capture a significant share of this market.

Here's what we don't: The company is operating at a significant loss, with a monthly burn rate of $275,000 and cash on hand of only $1 million. This raises concerns about its financial stability and ability to survive difficult fundraising times.

Although Mate Fertility has shown growth in revenue year over year, it is important to note that the company is still in its early stages, having been founded in 2021. Whether Mate Fertility can sustain its growth trajectory and convert more OBGYNs to open fertility clinics remains to be seen.

ON THE POD 🎙️

In the latest Inside Startup Investing podcast episode, Chris Lustrino interviews Chris Lindsay, CEO of Manta Biofuel. Chris Lindsay discusses Manta Biofuel's journey from its early days as a biofuels company to its current focus on water remediation. With a blend of innovative technology and practical applications, Manta Biofuel is working towards addressing critical water pollution issues and exploring sustainable energy solutions.

Listen to the full episode here

TOP-RATED DEALS 🌶️

Boaz Bikes

Boaz Bikes is a safety-focused electric scooter-sharing firm. Their scooters feature an advanced design with swiftly swappable batteries, eliminating home charging needs. In 2021, their per-ride revenues exceeded competitors' year-over-year growth at 319% and $2 million in total revenue.

• Valuation: $19.5 million

• Minimum Investment: $100

HumanQ

HumanQ is revolutionizing professional development in our fast-evolving business world by democratizing access to career coaching. With their group coaching, they cater to small groups of six, offering programs ranging from six weeks to a full year and drop-in sessions for those desiring flexibility. Their approach is rooted in a rigorous six-step scientific methodology focusing on brain transformation underpinned by neuroscience.

• Valuation: $14 million

• Minimum Investment: $1,000

InGen Dynamics

InGen Dynamics is innovating AI and robotics solutions to counter the global worker shortage and enhance living standards. The company's flagship, Aido, is a versatile service robot suitable for homes, hospitality, healthcare, and retail, while Sentinel focuses on precise AI-based real-time detections. InGen Dynamics boasts an $80M revenue pipeline, $8M in LOIs for robotics, and $35M in Origami AI commitments, bolstered by a $150M share subscription facility from GEM Global Emerging Markets.

• Valuation: $4.37 million

• Minimum Investment: $1,000