EarlyShares, a Miami-based equity investment platform for accredited investors, has launched its first equity investment campaign to the public.
The crowdfunding campaign, for a South Florida startup in the recreational boating industry, is also the first of many equity investment projects that will be launching on the EarlyShares platform in coming months, said Heather Schwarz-Lopes, co-founder and chief strategy officer for EarlyShares. "We’ve recieved about 1,500 applications from entrepreneurs seeking capital so the need is large," she said earlier this week.
The equity investment offering for BoatSetter.com, a peer-to-peer boat rental venture, has reeled in more than $625,000 from nine investors. BoatSetter is ultimately seeking $2.25 million but under terms of the offering must raise at least $1 million to close.
Andrew Sturner, chairman and CEO of BoatSetter, who is also an angel investor with Accelerated Growth Partners, said the EarlyShares crowdfunding platform is well organized and offers an efficient process in which all the deals are fully vetted. Because BoatSetter is a consumer company, crowdfunding is also a great way to draw in brand ambassadors. “The reason I did [crowdfunding] is it gave us the ability to expand our network and find more real advocates for our process," said Sturner, who liked that the company could also offer rewards to investors for various levels of investment.
BoatSetter, led by a team with extensive marine industry and technology experience, connects boat owners to prospective boat renters through a secure online platform. Often called boat-sharing or the collaborative economy, this creates a source of income for boat owners when their boats are otherwise idle and an affordable, convenient option for potential boat renters. The business model “will not only subsidize the cost of boat ownership and give renters access to new boating experiences, but will help bring additional business to our wide network of marine industry affiliates," Sturner said.
Under current SEC regulations, only accredited investors who are registered users of EarlyShares.com are able to view the BoatSetter offering and other upcoming equity investment opportunities on EarlyShares. Information includes details on the company’s history, investment documents, the business plan and a Q&A. The EarlyShares equity offering from BoatSetter will give accredited investors the opportunity to invest in EarlyFund – an LLC managed by EarlyShares – which holds a convertible note investment in Collaborative Boating, the owner of BoatSetter.
Founded in 2011 and launched publicly earlier this year, EarlyFund hosts both equity- and rewards-based campaigns on EarlyShares.com. BoatSetter’s offering is a hybrid model that includes rewards, such as commission-free boat rentals. Upcoming EarlyShares campaigns will feature equity investment offerings related to web entrepreneurship, real estate and music industry projects. Lopes said EarlyShares has a user base of 50,000 and about 1,000 accredited investors.
Under the Jumpstart Our Business Startups (JOBS) Act, which took effect on Sept. 24, 2013, small businesses and startups like BoatSetter are now legally allowed to publicly advertise their capital-raising initiatives to accredited investors on crowdfunding platforms.
"As angel investors, we are always looking for deals. The hope for all of us, startups and angel investors alike, is that crowdfunding will bring more angels into the fold," said Sturner.
Another provision of the JOBS Actis expected to allow EarlyShares and other platforms to open up equity crowd-funding beyond accredited investors, Schwarz-Lopes said. Regulatory approval isn’t expected until 2014.
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