• Dec. 3, 2016, 1:44 pm

And now for something completely different

I thought I’d do something a little different for the blog today. I’m staying focused on what’s happening in the world of online capital formation, but instead of writing about a specific topic, I’m revisiting my email from the past week, and adding a little commentary along the way.

Like most people, I’m inundated with email. Some of the email I receive is intra-office but for the most part, what clutters my inbox is a mix of unwanted solicitations and various industry content/news. I’m pretty old school too — I don’t use any kind of news aggregation app. If something interests me, I just sign up to the listserv and let the email dump right into my Outlook.

Here are some of the highlights from industry news that hit my inbox this week:

Online Lenders Drawing More Scrutiny by Regulators (Los Angeles Times) — Online lenders have grown explosively over the last few years, lending billions to consumers who can get large sums by simply filling out a few online forms. Now state and federal officials are looking to tightly regulate the industry.
My 2 cents: For all the fin-tech guys who thought they’d storm into the market and “move fast/break things” a la Facebook, this is your wake up call.
Earn a $250 Referral Fee (RealtyShares) — Real estate crowdfunding platform RealtyShares is marketing a referral program. If you refer a friend (and that friend signs up and links their bank account), you’ll get up to $250.
My 2 cents: The base referral fee here is actually $100, with $250 being the “up to” amount. I’m always interested in programs like this because it’s a clear way to understand a company’s cost of customer acquisition. I would think two metrics matter here: 1) Cost of customer acquisition and 2) Lifetime value of that customer. If #1 is < #2 then you’ve got a good business. I guess $250 is the going rate for customer/investor acquisition on real estate crowdfunding sites.
VR Treadmill Maker Virtuix Runs Toward a Mini-IPO (VentureBeat) — Virtual reality hardware company Virtuix gets good coverage on their Reg A deal. Virtuix will move ahead with its preferred stock offering on March 23 on SeedInvest. The company is targeting $10 million.
My 2 cents: What amazes me about this company is the price tag on what looks like a really complicated device. It’s no wonder they’ve got a delivery backlog. Can the company actually turn a profit? Heck, for 700 bucks I’ll take one of these too.
Coulson: “Online Securities Offerings Are Completely Disruptive” (Crowdfund Insider) — JD Alois interviews Cromwell Coulson, CEO of OTC Markets about the Elio Motors deal now listed on his OTCQX.
My 2 cents: I’m friends with Cromwell and he’s a tireless promoter of efficient capital markets and innovative ideas. Although the interview does cover more than Elio, I would’ve liked to have seen more discussion of all the issues in getting the Elio shares traded. From what I’ve heard, investors in the deal have been frustrated by the process of getting brokers to accept the shares into their trading accounts. I suggest a follow up that covers more of the…..uh…..problems.
Using Blockchain Technology in Crowdfunding (Crowdfundattny.com) — Mark Broderick, an attorney with Flaster Greenberg, put out this blog on how the blockchain and distributed verification can be applied to crowdfunding.
My 2 cents: I have little unique insight into blockchain so I’ll refrain from making a fool of myself with commentary. I will however point out that I own the domain “CrowdfundAttorney.com” so Mark, if you decide you’d like to trade-up that domain name of yours … I’m a seller!
Did DealFlow Analytics close its funding round? (Pitchbook) — Midweek I received an email from Pitchbook which was scarily similar to the ones I wrote about last week in my blog “The Hierarchy of Data Crappiness.” That is, Pitchbook wants me to update my investment profile in their database so the information is accurate.
My 2 cents: I replied to their email saying they should read my recent blog. Then they replied: “From reading your blog I have gathered that you are not interested in updating the company profile.”
Crowdfunding: Disclosing Both Pros and Cons? (Manatt) — Tom Muller of Manatt’s real estate group talks about how the unsophisticated nature of investors in crowdfunded real estate offerings justifies extra care in clearly disclosing both the pros and cons of deals.
My 2 cents: Everyone now sees how powerful real estate crowdfunding can be. But you can’t argue with Tom’s point: you need better disclosure. So much of the crap — I mean properties — being marketed on real estate platforms is really sketchy looking.

As I was wrapping up this blog, the following email from Sentient Jet came in. I just had to include this one.

Hi Steven, Sentient Jet is offering 15 and 20 Hour Private Jet Cards as a way to experience the rich set of benefits without the traditional 25 Hour commitment. This offer expires March 31st. Can I email you the details? Regards, Chris

Maybe if I tell them I drive an old Subaru and eat tuna out of the can they’ll leave me alone.

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