Dear Reader,
Last Wednesday, I launched a project that has been in the making for nearly seven years – Day One Investor. I’ve been on what some have called a mission to make early stage private investments accessible to all investors, regardless of whether they are accredited investors or not.
It has been a long process that has required a lot of persistence. And new legislation that was approved late last year and is now in effect has made private investing far more accessible to all investors than ever before.
The timing was finally right. And now I can do something about it…
Having reflected on the launch over the weekend, I wanted to share what I thought was the most important question that was asked during the Q&A session of the webinar.
I’m paraphrasing, but the question was along the lines of, “Why are you willing to do this? If you have access to a great private deal, why wouldn’t you keep it for yourself? Why would you be willing to give it to your subscribers?”
It’s a logical question, and I greatly appreciate that it was asked. After all, it’s natural to wonder if I’d be giving my second-best deals to my subscribers and keeping what I believed to be the best deals to myself.
So what is my motivation? Why would I give fantastic investment opportunities to my subscribers? There are two reasons:
The first reason is purely selfish – it makes me happy. Every time that I recommend what I believe to be a great investment opportunity, and that recommendation makes my subscribers money, it makes me happy.
My work carries a great burden, and one of the ways that I lighten that load is by winning for my subscribers as much as I can. And bringing small, private companies with incredible potential for my subscribers through hard work, analysis, and a global network that I have built up over three decades is something that I have wanted to do for years.
It is a great relief that I have a platform to do this with now. Not only can I provide my subscribers with life-changing investment opportunities, but I can also be part of the process of enabling incredible founders to have the capital that they need to build a fantastic business.
The second reason is that investing in small, private companies is not a zero-sum game. I don’t view the thought of me not being able to invest in one of my recommendations as a “loss.” I actually see it as a win (see my first reason).
The reality is that there are a very large number of high-potential private investment opportunities. No one investor or venture capital (VC) firm could possibly evaluate and invest in them all.
And the reality is that each individual deal is unique and has different funding goals. Sometimes an opportunity might come along, but the company only needs $500,000 as a bridge to a future funding round. I can’t recommend something that small. There just isn’t enough liquidity to go around for a group of subscribers.
But when I find great companies that are looking to raise at least $5 million through a Reg CF or Reg A/A+, and see the benefit of having a large number of investors who have a vested interest in the company’s success, then I will always recommend those to my subscribers.
There are more than enough opportunities out there to go around – it’s not a zero-sum game. And we can do it together.
It’s not too late to be part of what I believe will be a revolution in early stage capital formation through crowdfunding.
Day One Investors and Brownstone Unlimited subscribers have shattered all records for crowdfunding. Since our launch, more than $33 million has been raised for my very first official recommendation in Day One Investor.
What’s so exciting is that we are the genesis for business creation. We are literally enabling a business to be born and to ultimately be successful.
This is a very special one for me because not only are we investing at day one, but we’re investing at the earliest stages of a bleeding edge industry that is now being formed. That’s when the magic happens.
This isn’t the roll of the dice or placing a bet. It’s not even speculation… This is a calculated and well-researched investment with incredible potential.
If you’d like to learn more, please go right here. But please make sure you act quickly…
In less than 36 hours, my publisher will be taking this research offline for the rest of the year. And the investment opportunity itself will likely be gone within a matter of days.
Last week, one of 13 copies of the U.S. Constitution was sold at the Sotheby’s auction house.
The 230-year-old copy is extremely rare, as it represents one of only two copies independently held outside of the Library of Congress and Princeton University.
And in the run-up to the event, a group of more than 17,000 individuals banded together to form a DAO – a decentralized autonomous organization. Their mission was to raise enough capital to buy the rare document.
At the time, art collectors believed the historic item would sell for about $25 million, so the organization planned to raise enough capital to win the auction and have enough capital left over for insurance, transport, and storage.
In a few days, the DAO raised over $43 million.
The crowdfunded capital was more than double what the 1297 Magna Carta went for in 2007.
Unfortunately, the DAO was outbid. It was sold for $43.2 million by Ken Griffin, head of Citadel Securities – the same man who pays Robinhood to front-run regular retail investors.
But what started off as a somewhat tongue-in-cheek experiment – where a group looked to purchase a document that reflects traits held dearly by builders in the Web 3.0 arena – turned into a showcase of how efficient DAOs are becoming.
It took only days to crowdfund an incredible amount of capital with the sole purpose of acquiring a single, very expensive asset. In the tech world, we’d refer to an effort like this as a “sprint.” And through fast-paced collaboration, the participants of the DAO began to build a road map for how to take care of the finer details in terms of ownership.
Sadly, the DAO was unsuccessful, but the funds will be easily returned to investors. The capital was raised in cryptocurrencies and will be returned in the same way. Blockchain technology is what enables this to be done so easily.
Just like what has happened in the last few days with Day One Investor, this is clearly the beginning of a movement where people can band together and make investments of scale that have incredible potential, or in this case, have incredible meaning.
This is the vision for Day One Investor. By joining together, we have the ability to reshape the early stage venture capital industry by crowdfunding the most promising private companies at their earliest stages.
We can give incredible founders and entrepreneurs the runway that they need to build their businesses at an accelerated pace. Technology is making it all possible, and the investment returns are coming in a matter of years instead of decades as a result.
If you want to learn more about Day One Investor, you can access last week’s event, where I unveiled my first opportunity. But don’t wait – the doors to this new service will close soon…
The Los Angeles Auto Show is an event where big announcements are made. This year was no exception.
One of the bigger announcements surrounding the show came from Apple. The company revealed it’s picking up the pace of developing its own electric vehicle. It also shared a material shift in how it will execute this plan. Apple is now focused on fully autonomous vehicles.
Early rumors for the design suggest there will be no steering wheel, brake, or accelerator. It will simply be a seating space on wheels for people to ride in and move from point A to B.
We’ve known that the effort, known as Project Titan, has been investing in electric vehicles and automotive design. And after nearly a decade in the works, Project Titan’s latest development tells us how Apple is trying to position itself – as a real competitor to Tesla.
Tesla’s success is likely acting as a motivator for Apple here. Tesla is a $1.1 trillion company. And if you are a $2.6 trillion company like Apple, in order to grow materially, you need to get into a business that is potentially worth a trillion dollars.
This makes the two likely competitors in the years to come.
To date, Apple has made substantial progress. It has been hard at work designing a new chip that will act as the brains for its autonomous vehicles.
Apple already designs all of its key semiconductors for its iPads, MacBooks, and iPhones… and it does all this in-house. It even has artificial intelligence (AI)-specific chips designed to run neural networks.
There’s no reason it can’t do it again for its car. It already has 69 Lexus SUVs experimenting with its technology.
This tells me it will go down a similar route as Tesla by using neural networks to power the autonomous vehicle.
Apple is currently targeting 2025 for when its vehicles will come to market. This is three years sooner than originally imagined. It is clear this space is ramping up and will only get more exciting in the next few years with Apple joining the race.
Of course, all of this raises the question… Who is going to manufacture these cars?
This is one of the exciting unknowns for us to watch… And Foxconn is one of the players of interest. It already manufactures many of Apple’s current products. And it recently unveiled three electric vehicle prototypes it plans to manufacture.
Another possibility would be a Japanese automotive manufacturer like Toyota, which is the parent company of Lexus vehicles.
Apple already has close ties with Japanese manufacturer Panasonic, with whom it is in discussions to partner on EV batteries. Panasonic has close ties with the Japanese automobile industry, and it was the original partner with Tesla for its EV battery manufacturing.
However, the relationship between Panasonic and Tesla is on the decline now that Tesla has the funds and ability to do battery development on its own. This opportunity with Apple could help make up for lost revenue from Tesla.
Apple has the technical know-how, financing, and experience to compete against Tesla for a consumer product. And anybody that secures a contract involving Project Titan will be sure to do well.
Of course, there are other ways for investors to benefit from the electric vehicle trend besides Apple’s car… If you’re interested in learning about one such opportunity in this space, go right here to learn more.
We’ll end the day by highlighting an unusual capital raise for a lobbying organization.
The Blockchain Association, a trade association that represents companies in the blockchain and crypto space, just raised $4 million. It plans to use the funds to hire additional staff, host more events, and function at the same level as lobbying groups for other industries.
The three donors for this raise were cryptocurrency exchange Kraken, the large VC firm Digital Currency Group, and the foundation behind the decentralized storage project Filecoin.
These are major players stepping up to support this organization. And the timing comes as no surprise…
The infrastructure bill President Biden signed into law last week included an amendment to provision 6050I, a part of the U.S. Tax Code.
The change focuses on the definition of a “broker.” With the new law, any person or business that receives more than $10,000 in digital assets must verify the sender’s personal information. This includes their name, address, social security number, and more.
If the receiver fails to submit a report to the Internal Revenue Service (IRS) in 15 days… they could be committing a felony.
Criminal charges could possibly even fall on any of us who sent $10,000 or more using cryptocurrency if we try to structure our transactions to avoid the reporting threshold.
Individuals or companies that do something as simple as mine a cryptocurrency or create software for a digital wallet – clearly not acting as a broker – could be liable for up to five years in prison for not complying with this new regulation.
For traditional entities that broker transactions, identity verification is just part of doing business. But when it comes to the blockchain industry, it represents a hostile piece of legislation.
Many of the applications, users, and businesses that use cryptocurrencies, even though they are clearly not brokers, will now be required to file these forms. It will be a major deterrent for aspiring innovators.
Luckily, the bill as it stands won’t go into effect until 2024 – meaning there is time to act.
This new law is creating a rallying cry for the blockchain industry. It is now the single biggest issue the industry needs to deal with.
The industry is organizing itself by raising capital and educating policymakers. And for anybody involved in the industry, this is the most important voting item as we approach the midterm elections.
What is clear here is that a failure to amend this provision would drive businesses and jobs offshore. And it would punish both companies and individuals who are not acting as brokers in any way.
This turning point can make or break the industry. My belief is that this abomination of a regulation will only make the industry stronger. It is too illogical to persist.
And thanks to organizations like the Blockchain Association, the Chamber of Digital Commerce, and so many other talented and committed industry executives engaged with policy makers, we’re going to win this battle.
Regards,
Jeff Brown
Editor, The Bleeding Edge
Like what you’re reading? Send your thoughts to feedback@brownstoneresearch.com.
The Bleeding Edge is the only free newsletter that delivers daily insights and information from the high-tech world as well as topics and trends relevant to investments.
The Bleeding Edge is the only free newsletter that delivers daily insights and information from the high-tech world as well as topics and trends relevant to investments.
