Elio Crowdfunding

[skygazer6033]

Did I miss something? I normally read everything I receive from EM and I don't recall seeing any mention of a $250 minimum pledge. The only place I've seen a mention of $250 is as the starting point in the poll taken at the start of this thread. The $600 minimum was taken from the SEC advisory circular. That I can believe.

 

[Rob Croson]

If they didn't believe they could afford to offer a $250 buy in than why did they do it?

Did the SE site originally allow a $250 minimum pledge? (I don't remember...) As of now, the SE site has a minimum pledge of $600.

If they originally allowed a $250, then I can only think that they were unsure of how much interest they were going to get, so they thought to offer a low option to allow more people to indicate interest. Also, we don't really know how many people pledged that low of an amount., so we don't know how many people that change will affect.

I will agree with you, though, that they should have synced up their SE minimum pledge with their planned offering minimum buy-in. I find it hard to believe that the offering wasn't already planned out prior to the SE page going live. Although there is always the possibility that the SE offering limit was an unintentional mistake. I'm not prepared to call it a deliberate bait-and-switch without some proof.

 

[slinches]

I think the $250 pledge was just a conservative low limit set out as a starting point. Less than that and the investor would likely never see any profit from it after broker fees and taxes, anyway.

Besides, it seems that there's more interest than EM needs and some will have to be excluded. The cap of 10% of income for non-accredited investors provides a high end limit, but they may need something on the low end as well to help keep the average purchase as high as possible. As I mentioned before, the costs seem to look a lot (possibly into the millions) less if the average share purchase is higher.

And to those claiming bait-and-switch, the price and quantity of shares were not announced until the SEC filing. The indications of interest are simply a statement of how much each potential investor may be willing to invest so that the start up, the SEC and the public can gauge interest in a potential offering of securities.

 

[Johnny Acree]

I used the $250. because that is what I saw when I pledged. I was very early, If it changed later, I did not know that.
I'm sorry if I caused any panic.

 

[AriLea]

Did the SE site originally allow a $250 minimum pledge? (I don't remember...) As of now, the SE site has a minimum pledge of $600.

If they originally allowed a $250, then I can only think that they were unsure of how much interest they were going to get, so they thought to offer a low option to allow more people to indicate interest. Also, we don't really know how many people pledged that low of an amount., so we don't know how many people that change will affect.

I will agree with you, though, that they should have synced up their SE minimum pledge with their planned offering minimum buy-in. I find it hard to believe that the offering wasn't already planned out prior to the SE page going live. Although there is always the possibility that the SE offering limit was an unintentional mistake. I'm not prepared to call it a deliberate bait-and-switch without some proof.

It was $250 on the SE site, that's what I first put in, since it was the smallest. I later upped it to $400. I won't be able to commit $600. So long as the Elio gets built, I don't mind.

As far as who is serviced, we don't know what EM will actually do. I suggested the idea earlier on 'IF' maximizing the take, but they could easily treat the first 25m commitments different from the later ones. Giving everyone in the 25m the first opportunity, then for any amount not taken, offer to the later committers, starting with the top offers.

I have no idea if this $600 level applies, but if it does, I'll certainly know it.

 

[slinches]

I just checked, it is now $600 minimum at the SE site which matches the SEC filing. Although, I recall the $250 lower limit as well. That change should have coincided with the filing date, but I'm not certain when it actually happened.

 

[AriLea]

I just checked, it is now $600 minimum at the SE site which matches the SEC filing. Although, I recall the $250 lower limit as well. That change should have coincided with the filing date, but I'm not certain when it actually happened.

This possibly was adjusted because EM/SE are less worried about getting additional, and now that the first 25m is reserved, there is no ethical reason they can't now require a 600 minimum, or even adjust other tenements of the offering for any new takers.

Of course there is another way this could go down, and would not be 100% nice, but would be efficient. Make it first come first serve. Invite all the deposits via email, ignoring if they are in the first 25m or not, and assign a priority based on who's money is received first. In each daily (or bi-weekly) batch, accept it starting with the top contributors. There would be no external way to know the details of processing in each cycle. When the acquisition limit is reached, revert that excess money back to the sender.

 

[Rob Croson]

Besides, it seems that there's more interest than EM needs and some will have to be excluded. The cap of 10% of income for non-accredited investors provides a high end limit, but they may need something on the low end as well to help keep the average purchase as high as possible. As I mentioned before, the costs seem to look a lot (possibly into the millions) less if the average share purchase is higher.

The StartEngine site lists ~9300 reservations. At $50 each, that's $465,000. If bumping up the minimum to $600 excludes 500 people (which I think is *much* higher than the real figure would be) from investing, then that saves EM $25,000.

Given that the average reservation via SE is almost $3,700, there can't be that many people that only indicated $250, and even fewer who won't go with the $600 minimum required by the actual offering.

 

[AriLea]

I forgot one other thing, there is nothing that stops EM from contacting the top 'expressions' and suggesting switching to another investment path. Either before or after processing the A+ offerings. If someone honestly offers $50k, what is the likely hood they could qualify for the 506c, or as a private angel investor? There are probably ways to sweeten the pie for that switch, if they qualify.

I usually think in three or more different paths at once. It's creativity not deviousness. Ok, just a bit of deviousness.

 

[Buckeyejake]

It's not a question of who can afford it. It's about offering a specific value, people making a commitment to that value and then having the value increased 2.4 times without notice . It's just bad business practice.

It's no different than agreeing to pay $6800 for your Elio and the day you pick it up the new price is $16,320. So that wouldn't bother you?