The startup bubble of 2021 is back again, this time with new startups, and not just AI ones, but even a supplier of three-wheel solar cars, whose lack of revenues and profitability remind us of the SPACs of the previous bubble. “Risky #startups with a flair for digital marketing are using a regulatory exemption that allows them to hype their moonshot products and raise huge sums of money from individual investors.”
The SEC approved “Regulation A,” nearly a decade ago, a technique that “allows businesses to annually raise as much as $75 million while complying with lighter-touch rules than a traditional initial public offering. These companies have raised billions of dollars from hundreds of thousands of Americans with little oversight.”
“The companies have sometimes misled investors as they burn through tens of millions of dollars, struggle to generate sales, and continue to seek more money.”
“Aptera has been telling investors for three years that it would soon deliver its first solar-powered car but still hasn’t shipped any. Tiny-house maker Boxabl says its wait list exceeds 175,000 customers, but it has sold only six units this year.”
“Aptera and Boxabl have both relied on catchy social-media campaigns that hype their progress creating game-changing #technologies. #Crowdfunding platforms—such as StartEngine and Republic—match the fledgling firms with novice investors who can behave more like fans than shrewd financiers looking for a solid return on their investment.”
“Every time I see another video about Aptera the farther I fall in love with this car,” one person wrote on a recent YouTube video. “Aptera really embodies the statement, ‘Do it right, or don’t do it at all.’”
In a new bid to attract more capital, Aptera said “investors who gave at least $2,000 would receive $1,000 off the price of a vehicle when they are delivered. Investors who contribute at least $27,000 would get the first vehicles that are delivered in the United Arab Emirates, where Aptera is trying to raise money and find customers. In a recent video, the company showed an Aptera doing “tons of laps” on a racetrack in Abu Dhabi.”
“Las Vegas-based Boxabl has raised $150 million by telling investors that it will automate home-building by cranking out factory-built tiny houses in 15 minutes.” “Four years in, Boxabl has delivered only 223 of the dwelling,” most of them through one order to the U.S. government’s naval station in Guantanamo Bay.”
“Despite Boxabl bleeding cash, the top two managers were both awarded bonuses of $297,500 last year or 50% of their annual salaries of $595,000,” generating concerns inside their company. This does look like a money grab,” said the company’s former vice president of strategic investments.”
#innovation #hype
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