February Impact Cherub Club Meeting
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I’m not a financial advisor; nothing I write in Superpowers for Good should be considered investment advice. You should seek appropriate counsel before making investment decisions.
We are having fun with the Impact Cherub Club while we have an impact and (attempt to) make money!
Traditionally, we have considered three new candidates for investment and heard diligence reports on those selected for further review the prior month. Most often, all three businesses were considered. As a result, we review six different companies in an hour.
We’ve decided that this creates too much time pressure and further decided not to increase the length of the meeting. Going forward, we’ll review just two new companies each month, plus we’ll hear reviews of those selected for further review.
The result of the change is that our meetings should have a slightly more relaxed and thoughtful feel.
January Meeting Report
Due Diligence Reports and Investment Decisions
At last month’s meeting, we heard diligence reports from club members on four companies, pocstock, Azure Printed Homes, Kitsbow and tbh. The club members discussed the pros and cons of investing and voted to reach consensus investment recommendations for the members, approving three of the four!
We don’t announce our investment recommendations. If you’d like to know what we’re recommending, please join us on February 21 at 1:00 PM Eastern. There is no cost to participate; you don’t have to invest anything ever. When members choose to invest, I don’t touch the money and don’t earn any fees, commissions or favors.
New Company Screening
Last month, we took a first look at the following three companies. Club members volunteered to conduct some due diligence and report on all three at our next meeting on February 21, 2023, at 1:00 Eastern.
Pink Bench Distillery
Founded by two women in Montana, the idea for Pink Bench Distillery grew out of an encounter with a bear. The critter climbed a relatively small apple tree to gorge on the ripe apples. The pair begin organizing the community to harvest and use all the apples, ultimately using the fruit to produce apple brandy. The pair use other wild-grown ingredients sustainably harvested for various beverages. The company is raising money on Crowdfund Main Street with a $500 minimum investment.
HiveTracks, founded by a team in North Carolina, has developed a suite of tools to help beekeepers track their hives and gather meaningful data for maintaining a healthy bee population globally. With 75 percent of our food requiring natural pollinators like bees, this is critical for the future of our planet. HiveTracks is raising on Wefunder.
Established by Treyvon Perry, an African American home builder, the company uses 3D printing technology to build standard-size three-bedroom, three-bath homes in less time and at a lower cost than conventional processes. Based in the Dallas area, the company was fully booked in 2022 and is raising capital to meet demand in 2023. Von Perry is raising money on StartEngine.
At our January meeting, Jackie Logan, chief investment officer for the crowdfunding portal Raise Green (which is now raising money via Wefunder), took a few minutes to help us understand the difference between SAFEs and Convertible Notes.
A Simple Agreement for Future Equity (SAFE) is just that. The issuing company accepts your investment capital in exchange for a promise to provide equity (typically preferred stock) at a future time when a large venture capital raise is completed. The terms are generally considered founder-friendly.
A convertible note used by startups is designed to accomplish the same function as a SAFE with the additional investor protection of a loan agreement that gives investors a claim on the company’s assets in the event of liquidation. Investors don’t expect to be paid principal and interest when investing in startups. Interest accrues, effectively increasing the number of shares the investors might receive over time. The conversion of debt to equity follows similar formulas to the SAFE.
Convertible notes were used earlier in the history of venture capital. SAFEs were developed to simplify the early-stage funding exercise, reducing legal fees and creating a more founder-friendly structure.
Next Meeting—February 21, 2023, at 1:00 PM Eastern
At our next meeting on February 21, 2023, at 1:00 PM Eastern/10:00 AM Pacific, consistent with our plans for future sessions, the agenda will have three items:
Preliminary Consideration of New Candidate Investments
We’ll begin with the due diligence reports from the Impact Cherub Club members who volunteered to research the companies listed above under “New Company Screening.” After hearing the members’ reports, we’ll vote to determine whether or not to recommend investment in the companies. The decision will be made available to everyone who registers to attend, including those who don’t make it. Register here.
This month, we’ll talk more about how business valuation correlates with financial returns for investors. We’ll try to take one or two steps past understanding that up is better than down.
Preliminary Consideration of New Candidates
Before writing this post, I circulated a list of five candidate offerings to our members. From this list, they chose the following two for review. Each of the companies is raising money via Regulation Crowdfunding on FINRA-registered portals.
Seedsheet is a Shark Tank-featured company that sells patented organic gardening supplies. The primary product is a cloth sheet that rolls out onto a garden area with seeds implanted, ready to start growing. The sheet serves as an organic deterrent to weeds. The company is raising money on Wefunder.
Between one and two billion people struggle with access to clean water. Aqua Research has developed an affordable and effective water purification process for people confronted with impure drinking water in low-income countries. The company believes the market for its products is $3 billion annually. The company is raising money via Netcapital.
Please join us for the monthly Impact Cherub Club meeting on February 21 at 1:00 PM Eastern. There is no cost or obligation. We’re genuinely having fun! Register here for free.
On May 10-11, 2023, we’re convening the second annual SuperCrowd23 event. Building on the success of the first event, we’re planning for bigger and better with lots of fun and excitement, along with great networking and so much invaluable content.
At the moment, The Super Crowd, Inc. is offering tickets at early bird pricing. As a Superpowers for Good reader, you’re entitled to a 50 percent additional discount!
Don’t wait! Register now!