Elio Motors seems to have found the capital it needs to launch the most revolutionary car since the Tesla Model S was introduced.
The $6,800, three-wheeled car is designed principally for commuting and will get 84 an estimated miles per gallon. Capitalizing the venture has seemed tricky, but new rules promulgated by the Securities and Exchange Commission governing Regulation A offerings created an interesting “test the waters” option that allows an issuer to gauge market interest in an offering demonstrated plenty of interest. Over $27 million of interest was expressed.
Regulation A+ as the new rules are being called, gives ordinary rather than “accredited” or wealthy investors the opportunity to invest in early stage companies. The bulk of the investment interest in Elio was from people who are interested in buying a $6,800 car—not the venture capital set.
Ronald Miller, CEO of StartEngine, the crowdfunding site that is working with Elio Motors, notes, "Equity Crowdfunding under Reg A+ is the greatest advancement for entrepreneurship in a generation. Since access to capital is the greatest barrier to bringing innovations to the market, leveling the playing field for investors and founders alike is a real game changer."
Miller explains the concept of equity crowdfunding, as demonstrated by the Elio effort, “As traditional media dies, social becomes the new marketing power of today’s corporations. Now, for the first time, companies can engage their customers to become investors who then become brand ambassadors who push the companies messaging out to their social networks".
"With Reg A+, Congress has finally opened the door to the other 92% of the population that never had a chance to invest in the next big thing like
Miller sees this as both a practical and a social problem. He notes, “The only ones saying that there is a lot of money available to startups are the VC's. Unless you are white male and previously had a successful exit from a VC backed company, your chances of getting funded by a VC are about zero."
Paul Elio, the founder and CEO of Elio Motors, feels much the same way, noting, “I wanted to own a car company from the time I was 8-years old. Realistically, I had a better shot at becoming a professional athlete.”
“It was 2008, gas prices were through the roof and wealth was pouring out of our country. Every night, I’d come home and watch the news and get angry about what was happening. I decided to do something about it,” Elio explains. “Elio Motors is dedicated to creating American jobs and working to make our manufacturing sector and our economy stronger.”
On Thursday, August 6, 2015 at 3:00 Eastern, Miller and Elio will join me for a live discussion about the offering and the car that so many people are eager to see come to life. Tune in here then to watch the interview live. Post questions in the comments below or tweet questions before the interview to @devindthorpe.
You can download an audio podcast here or subscribe via iTunes.
More about Elio Motors:
Elio Motors created a new vehicle that is revolutionizing the way people drive. The Elio is a three-wheeled, two-seater that will get up to 84 MPG, cost approximately $6,800 and will be built in the U.S.A. The company plans to begin production in 2016 and currently has more than 44,000 reservations for a place in line to purchase the vehicle.
More about StartEngine:
StartEngine Crowdfunding is an equity crowdfunding platform under new SEC rules allowing private companies to advertise the sale of stock to both accredited and non-accredited investors. For the first time in over 80 years, companies can raise capital from their customers, transforming them into investors and in turn brand ambassadors. Companies can now leverage the social media networks of these brand ambassadors to gain more customers and increase revenue.
By way of background, StartEngine was founded by Howard Marks, who co-founded Activision (ATVI $15B Market Cap) and Acclaim (acquired by Disney Interactive). Our CEO, Ron Miller, is a 4 time INC 500 award winner and has built and exited 4 companies. Under their guidance, StartEngine grew to the largest tech and media accelerator in LA, having invested in over 60 startups over the past 3 years.
Elio's bio:
Twitter: @paul_elio
Paul Elio was an eight-year-old with dreams of launching his own car company. As an adult he attended the country’s top automotive engineering school, General Motors Institute, now Kettering University in Flint, Michigan, graduating Magna Cum Laude. Elio began his career with Johnson Controls, before launching engineering firm, ESG Engineering. Over time, ESG Engineering grew to a successful 40-person firm but Elio still yearned to own a car company. It was during a trip with a close friend Elio came up with the idea of a three-wheel, high-mileage ‘auto-cycle’. Elio knew the idea filled an unmet demand and focused all his energy on his childhood dream, Elio Motors.
Miller's bio:
Twitter: @ronstartengine
Ronald D. Miller is an entrepreneur’s entrepreneur having visualized, founded, built and sold five companies through management buyouts, private equity firms, private investors and public markets.
Currently, Ron is a partner in StartEngine, LA's largest tech accelerator. He is helping to find, screen and fund new technology related start-ups and build an equity crowdfunding platform company. As the CEO of StartEngine Crowdfunding Inc., Ron facilitates financial ignition for innovative tech and media companies in order to help entrepreneurs achieve the American dream.
Ron founded the San Diego Chapter of the Entrepreneurs Organization (EO) and served for 3 years as the Chapter’s Chair. He is also a member of WPO/YPO where he has served on the executive committee. Ron is also a member of the CNBC-YPO Chief Executive Network, the LA Mayor's Council on Technology and Innovation and the Advisory Council of USC Greif Center for Entrepreneurial Studies.
