State-by-State Investment Trends: Who Leads in Equity Crowdfunding?

CHART OF THE WEEK 📈

By Léa Bouhelier-Gautreau | Read

It’s well-known that states with the best startup ecosystems, like California and New York, offer more investment opportunities than others. However, it’s surprising to see that some states receive higher average investments per deal. This week, we examine the average amount invested in equity Reg CF and Reg A+ deals in each state over the past 12 months, highlighting disparities among different regions.

• South Carolina, Hawaii, and Connecticut lead with the highest average investment per deal at $3.3 million. This performance is attributed not only to the success of their startups but also to the fact that each had fewer than 10 offerings in the past year, making it easier for exceptional deals to skew the results.

• While states like Alaska and Kansas had no offerings on ECF platforms, a few states such as Montana and Oklahoma had four or fewer deals, rendering their data statistically insignificant.

• California has been the most active state since June 2023, with 469 equity offerings, far surpassing New York’s 81 deals. This high activity level explains why the average amount invested in Californian deals is close to the industry average of $525K.

• Interestingly, a few Canadian provinces also had offerings on ECF platforms over the past year. Ontario, Quebec, and British Columbia had a total of 10 startup deals.

• Despite being home to the dynamic Boston, Massachusetts saw an average investment of only $78K in its 22 startup deals.

To see more charts and analysis on average investments, including Canada, read the full article here.

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PITCH REVIEW 💸

By Léa Bouhelier-Gautreau \ Deal Report

Brief: Athyna simplifies global workforce management with its comprehensive employment platform, addressing the complexities of hiring, payroll, benefits, and compliance across multiple countries. Athyna enables businesses to onboard and manage contractors, hire full-time employees, and oversee performance without needing a local entity, thus eliminating bureaucratic hurdles. Operating in over 150 countries, the platform supports international expansion efficiently.

Key People: CEO Bill Kerr focuses on streamlining global employment with a strong emphasis on remote work. Kerr, an entrepreneur with six years of industry experience, transitioned from COO to CEO, bringing his background in building successful remote companies.

Summary

Here's what we like: Athyna's platform allows businesses to hire, manage, and retain global talent seamlessly: it addresses a critical need for simplifying and optimizing international employment processes. The company's comprehensive suite of services positions it as a one-stop solution for global teams and takes advantage of the quick rise of remote work.

The company has demonstrated remarkable revenue growth, increasing from $50,000 ARR to $6 million in four years. Athyna's annual revenue growth rate of 76.83% between 2022 and 2023 indicates the platform's product-market fit and scalability. A solid user base bolsters This robust growth trajectory, reinforcing the platform's credibility and reach. The company impressively integrated ChatGPT's APIs to improve its product and allow its clients to recruit their employees and contractors in a few days.

With a valuation cap of $20 million, Athyna offers a compelling investment opportunity, especially considering its low revenue multiple of 3.64x. The company's ability to sustain and enhance its product offerings has attracted VC backing from Aerolab Ventures and Cardinia Ventures.

Here's what we don't: Athyna operates in an extremely competitive market with established players such as Indeed, LinkedIn, and Upwork, as well as direct competitors using AI like Fetcher, Humanly, HiredScore, and Recruitee. Many of these players have multiple years of market presence, extensive user bases, and substantial resources, and this could make it difficult for Athyna to capture and maintain market share.

Financially, while Athyna has demonstrated high growth, it remains pre-profit with a net income of -$187K as of the most recent fiscal year. The company's monthly burn rate of $50K against cash on hand of $242K highlights potential cash flow issues if additional funding is not secured promptly. 

Moreover, the barriers to entry in the talent acquisition and staffing technology market are low, heightening the risk of new entrants further saturating the market. Competitors can easily emerge, potentially eroding Athyna’s market position and growth potential. 

LAST WEEK’S POLL RESULTS

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54 Votes

🎙 INSIDE STARTUP INVESTING

By Sam Fiske \ Listen

In this episode, Chris speaks with Gary Skulnik, founder and CEO of Neighborhood Sun, a company innovating in the community solar power sector. Neighborhood Sun provides an accessible solar power solution for individuals who cannot install solar panels due to various constraints. Gary shares his journey from being a climate activist to pioneering community solar projects that allow consumers to benefit from solar energy without the need for personal installations, highlighting the company's growth and the increasing popularity of community solar.

STAFF PICKS 🌶️

Holme & Hadfield

The company makes unique display cases for collectors of accessories. Holme & Hadfield offers display-worthy storage solutions for collectibles, such as watches, pocket knives, and challenge coins, and sells through direct-to-customer, Amazon, internationally, and wholesale. The company has generated $10 million in revenue in three years, with a CAGR of 145%, and has 65,000 followers and subscribers.

• Valuation Cap: $10 million

• Minimum Investment: $500

Melanin Haircare

It is a natural haircare brand that contains natural ingredients for hair strengthening and growth. Melanin Haircare features ingredients like argan oil, black cumin, sage, banana, Vitamin E, and pumpkin and does not contain harmful chemicals like benzene, formaldehyde, or sodium lauryl sulfate. The company has generated $23.5 million in lifetime revenue and expects to reach $8 million in revenue in 2024.

• Valuation Cap: $24 million

• Minimum Investment: $250

LEXI

LEXI provides a building management system aimed at decarbonization. LEXI's SmartBMS leverages AI-automated energy management to retrofit commercial buildings, helping them meet stringent climate mandates in North America and Europe. The company boasts customers such as Crane, Rheem, and PLDT, and has generated $2.7 million in cumulative revenue.

• Valuation Cap: $30 million

• Minimum Investment: $500