This post was originally produced for Forbes.
Last fall, the IPO market “fizzled” and 2016 has seen the broader market fall well into “ correction” territory (representing more than a 10% drop from the peak). That hasn’t stopped Elio Motors from raising over $16 million in a “mini-IPO” with help from StartEngine.
Elio Motors, founded by Paul Elio, is developing a sub-$7,000, three-wheeled vehicle that seats two people and gets 84 miles per gallon. Last summer, Elio “tested the waters” and found interest of over $27 million (a spokesman says the tally reached $45.6 million). With the SEC’s official sanction, Elio launched their regulation A offering, something of a cross between a traditional IPO and investment crowdfunding, just as the market began to stumble.
Elio explains that as with a traditional IPO, the shares will trade publicly, “ Shares in Elio Motors will soon become eligible to be traded on the OTCQX, the top tier of the three marketplaces for trading over-the-counter stocks provided and operated by the OTC Markets Group. This will provide liquidity for investors who purchase stock through the Regulation A+ offering.”
“Elio Motors will close out the current Regulation A+ stock offering on Feb. 1, 2016, as one of the steps needed to allow for OTCQX trading,” he adds.
According to Elio, the funds will be used to fund engineering and testing vehicles, the “E-Series” to test “aerodynamics, durability and safety.”
Ron Miller, StartEngine’s CEO, commented on the shifts in the regulatory environment that allow for this offering to take place. “Up until recently, the majority of fundraising opportunities in North America were limited to the wealthiest 3 percent of the population – this includes both startup owners looking to grow their business as well as investors interested in pursuing progressive new financial opportunities.”
“Equity crowdfunding stands to be the biggest financial leap in a generation, allowing everyone to back the the progressive companies of tomorrow. These startups will lead to job creation and enable a new revolution in fundraising, helping everyday investors realize the modern American dream,” Miller concluded.
To learn more about the Elio Motors offering on StartEngine, follow this link.
With just a few days left in the offering window, Elio and Miller will join me here for a live discussion about it on Thursday, January 28, 2016 at 5:00 PM Eastern. Tune in here then to watch the interview live. Post questions in the comments below or tweet questions before the interview to @devindthorpe.
More about Elio Motors:
Founded by car enthusiast Paul Elio in 2009, Elio Motors Inc. represents a revolutionary approach to manufacturing an ultra-high-mileage vehicle. The three-wheeled Elio is engineered to attain a highway mileage rating of up to 84 mpg while providing the comfort of amenities such as power windows, power door lock and air conditioning accompanied by the safety of multiple air bags and an aerodynamic, enclosed vehicle body. Elio’s first manufacturing site will be in Shreveport, Louisiana.
More about StartEngine:
StartEngine is the premier equity crowdfunding platform, connecting Millennials and aspiring investors with tomorrow’s progressive companies. Based in Los Angeles, the company was created in 2013 by Howard Marks, co-founder of Activision, and Ron Miller. StartEngine aims to revolutionize the startup business model by helping individuals invest in private companies on a public platform, now viable for the first time in history, thereby helping entrepreneurs achieve their dreams. Learn more at http://www.startengine.com
Bio: Paul Elio graduated from General Motors Institute and the Engineering and Management Institute (now Kettering University) in Flint, MI, Magna Cum Laude with a degree in Mechanical Engineering. He began his career at Johnson Controls, the global diversified technology and industrial leader, where he developed business software and training courses for degreed engineers. He left Johnson Controls to start engineering company ESG Engineering as a founding partner. Under Elio’s guidance, ESG was issued several patents and became known for quickly moving ideas from concept to reality. In 2008, Elio led the ESG Engineering team in the development of a three-wheeled, ultra high mileage, safe, ultra low price vehicle. The project led to the creation of Elio Motors within ESG Engineering. Elio has over 18 years of engineering and executive management experience and has spent much of his time in the automotive space focused on technology development. He holds number patents related to mechanisms. Elio resides in Phoenix, Arizona where he is raising his three sons.
Ron Miller is a four time Inc. 500/5000 Award recipient and an Ernst & Young Entrepreneur of The Year Award Finalist. He has visualized, founded, built and sold five companies through management buyouts, private equity firms, private investors and public markets. Currently, Ron is the CEO of StartEngine Crowdfunding, the most successful equity crowdfunding platform to date. Ron founded the San Diego Chapter of the Entrepreneurs Organization (EO) and is also a member of WPO/YPO where he has served on the executive committee. Ron is active in the LA Mayor’s Council on Technology and Innovation, the Advisory Council of USC Greif Center for Entrepreneurial Studies and is an instructor at UCLA Anderson School of Business.