Vets-turned-Founders: Driving Success in Business Tech, Energy, and Transportation

CHART OF THE WEEK 📈

By Léa Bouhelier-Gautreau | Read

U.S. veterans often make exceptional startup founders. During their service, they developed strong discipline, focus, adaptability, and problem-solving skills, and many were trained to lead teams. These qualities translate well into the startup world as veterans transition to civilian life. Notably, around 5% of startups raising through equity crowdfunding platforms (Reg CF and Reg A+ deals) have veteran founders. We examined the industries these founders are entering and how their ventures compare to the broader market.

• Among the 156 deals with veteran founders in the last 3 years, 16.6% were in the business technology industry, 10.8% in the media industry, and 10.8% were in healthcare. Non-veteran founders, in the other hand, launch more online rounds in the healthcare industry than in any other.

• Business tech—particularly software—is especially favored by veteran founders. For example, AtomBeam, an AI software company, stands out as one of the most successful in raising funds online.

• While food, beverages, and consumer packaged goods (CPG) startups are popular on equity crowdfunding platforms, veteran founders tend to focus on sectors like energy and transportation. Companies like Paladin Power and Starfighters Space have recently raised $5 million and $11 million (ongoing), respectively. Given their technical expertise and familiarity with the defense industry, which often awards grants to capital-intensive startups, it’s no surprise that veterans excel in these areas.

• Since October 2021, veteran-owned startups have raised an average of $746,000 online, compared to $483,000 for non-veteran-owned ventures. This higher average is largely driven by successes like Miso Robotics, which has raised close to $30 million across three online funding rounds.

INVESTMENT ROUNDTABLE

By Sam Fiske / Watch

In this week’s Kingscrowd Investment Roundtable, Brian, Teddy, and Léa dive into key trends shaping October 2024’s investment landscape. Our chart of the week explores capital-intensive industries such as robotics and lithium extraction, with insights into top-raising companies like EnergyX and Miso Robotics. Next, we review Printera, a 3D printing startup making waves in construction by using robotics to reduce building costs and timelines. Join us for these discussions, plus a timely update on potential shifts in the regulatory landscape following recent SEC meetings and the Fed's interest rate cut. Perfect for both investors and founders, this episode offers a deeper look into industry changes, company profiles, and market trends.

WEBINARS

Join us on December 4th at 4pm ET for an exclusive webinar with RedCrow and Alira Health! Discover how RedCrow’s platform makes investing in healthcare innovation accessible, from exciting opportunities in medtech and biotech to overcoming the complexities of healthcare investing. Don’t miss insights from industry experts Aishlin Harrison and Dan Pastore on current trends, portfolio companies, and how to get started. Register now to secure your spot

PITCH REVIEW 💸

By Léa Bouhelier-Gautreau \ Deal Report

Brief: Qnetic is developing a flywheel energy storage system that stores electricity as kinetic energy in a spinning rotor, offering a durable and sustainable solution for energy storage. Designed for businesses in the renewable energy sector, Qnetic's system addresses the intermittency of solar and wind power by providing a steady supply of electricity during periods of low renewable generation. Unlike traditional batteries, Qnetic's flywheels do not degrade over time, making them a more reliable and cost-effective choice for grid stabilization and energy efficiency.

Key People: Qnetic's leadership, co-founded by CEO Michael Pratt and CTO Loïc Bastard, combines expertise in product design and technical engineering, essential for developing its advanced energy storage systems. Pratt’s background in medical product design and Bastard’s experience with aerospace and wind turbine systems drive Qnetic’s innovative flywheel technology. Director of Quality and Procurement Mathias Mier, with two decades in renewable energy, ensures product reliability.

Summary

Here's what we like: The global push for renewable energy has created a booming demand for efficient storage solutions, and Qnetic’s flywheel technology stands out with zero-lithium, zero-degradation features, making it both sustainable and cost-effective over time. Unlike lithium-ion batteries, which degrade quickly and use harmful metals, Qnetic’s rotors last 30 years, offering a lower total cost of ownership.

With an impressive 85% energy efficiency and the ability to store energy for up to 12 hours, Qnetic's technology addresses the critical issue of renewable energy intermittency. The company has secured $100 million in letters of intent and filed three patents, signaling strong potential for market acceptance.

The experienced leadership team, favorable investment terms at only $20 million, and a product performing better than lithium-ion batteries demonstrate Qnetic's growth potential. The company already has 3 VCs committing to invest in this round, including SOSV, which also backed the startup in its previous round.

Here's what we don't: Qnetic could face challenges while building its new prototype. Expanding flywheel technology beyond current limits introduces significant technical risks. Additionally, as an early-stage company with no revenue, Qnetic may face difficulty convincing customers to adopt its unproven solution.

The company’s financial situation is also concerning. With a $60k monthly burn rate and only $250k in cash reserves, Qnetic has a limited runway, making it highly dependent on external funding. If it fails to raise sufficient capital, it could struggle to sustain operations or complete product development. A slowdown in the deployment of solar and wind farms could further dampen demand for Qnetic’s energy storage solution.

Overall, these risks—funding gaps, technology challenges, and uncertain market demand—could impede Qnetic’s growth and make it a less attractive investment opportunity.

LAST WEEK’S POLL RESULTS

Would you invest in AMASS Botanics?

🟨⬜️⬜️⬜️⬜️⬜️ 👍 (1)

🟩🟩🟩🟩🟩🟩 👎 (3)

4 Votes

TODAY: STARTUP SHOWCASE DC

Join us tonight for Kingscrowd’s Startup Showcase DC! Starting at 5 PM at Industrious DC, this exclusive pitch event—sponsored by Fidelity Private Markets—features founders from five highly-rated startups on Kingscrowd! Don’t miss your chance to network with like-minded investors, hear from founders across industries, and discover unique investment opportunities. If you’re in the DC region, secure your spot now, and we’ll see you there!

STAFF PICKS 🌶️

GACW

GACW (Global Air Cylinder Wheels) has developed the patented Air Suspension Wheel, an airless, steel-based wheel with in-wheel pneumatic suspension. Global mining companies have tested this eco-friendly and cost-effective alternative to traditional rubber tires, showcasing its durability and environmental benefits.

• Pre-Money Valuation: $80.2 million

• Minimum Investment: $1,031

MAGFAST

MAGFAST designs and manufactures premium magnetic wireless chargers compatible with all device brands. Since its 2017 test launch, where it generated $600,000 in pre-orders within 24 hours, MAGFAST has developed a product lineup that includes MAGFAST Lux, Life, Extreme, Air, and Heathrow.

• Pre-Money Valuation: $41.8 million

• Minimum Investment: $110

Resound

Resound is an AI-powered platform that automates audio and video editing, streamlining the process for content creators, podcasters, and businesses. With over 16,500 users, Resound addresses the time-consuming nature of traditional editing by automating transcription, discrepancy detection, and adjustments, achieving professional-level accuracy. This solution allows users to produce high-quality media content quickly, reducing the need for extensive manual editing.

• Valuation Cap: $4.5 million

• Minimum Investment: $100

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