Invest in This First Mover With Stunning Initial Growth

By Andy Gordon, Co-Founder, First Stage Investor

As the person who turns off the lights in various offices at the end of the day as I make my way from the third floor to the first and out the door, I think it was fate that I came across Sapient.

Sapient’s technology marries artificial intelligence and smart outlets with building energy management systems. It gives building owners and management companies the ability to control plug load, soon to be the single greatest source of waste in commercial buildings.

So what the heck is plug load?

It’s the energy consumed at each of the electrical outlets in a building. Devices like printers, computers and TVs are not managed or metered, even though 36% of the energy consumed by buildings is plug load. That number will climb to 45% in the next 10 years. And it will consume more energy in buildings than HVAC and lighting, the biggest energy gluttons in buildings today.

I suppose you could unplug half the outlets during the lunch hour and 80% of them at the end of the day. I’ve actually thought about making this recommendation to our own building manager. It is a bit impractical, though. And I’d have to deal with the handful of people who work through lunch and continue to use office equipment.

The beauty of Sapient’s system? It will learn who those people are.

Its machine-learning system optimizes power delivered to plugged-in devices based on the behavior of people in the building. Its algorithms then generate rules that control power delivery and reduce waste.

Smart outlets are used in homes, so the technology isn’t untried. But they are not designed for use in large buildings and lack enterprise-level software controls. Sapient is the only company doing this. So it enjoys all the advantages that come with being a first mover – building up its experience, brand and reputation… and capturing customers without worrying about competitors.

A Huge Market

Sapient’s business model charges according to a building’s square footage. In the U.S., there are more than 1 million commercial office buildings, totaling more than 16 billion square feet.

That’s a $130 billion market opportunity.

What’s more, commercial building floor space is expected to increase 39% over 2017 levels by 2050. This market is huge.

Stunning Initial Growth

Sapient went live last September. In just a few weeks it captured orders covering nearly 8 million square feet. That represents $400,000 to $500,000 of recurring annual revenue for at least the next three years (this type of work is booked under three-year contracts).

And because some of these customers manage thousands of buildings, Sapient’s pipeline from these clients alone climbed to 48,000 buildings. In the last month, that number has more than doubled to 100,000 buildings, which could bring the company as much as $2.4 billion in potential recurring revenue a year.

Not all of this pipeline will turn into actual business. Co-founder Sam Parks thinks he has a very good shot at converting 50% to 75% of it. It depends on how well Sapient’s technology performs.

The remainder of this year will see his system undergo “testing and deployment” by facility management companies, corporate real estate companies (large companies that are the sole tenants in thousands of buildings across the U.S.) and various other groups, including small businesses and school systems.

If these groups like Sapient’s system, Sapient could see revenues jump into the tens of millions by 2020.

Now, Sapient’s products are relatively new. So they will be tweaked in the coming months as the company learns more about how its technology works in certain environments. But Sapient’s system has already proven its ability to reduce plug load by 30% and save its larger customers potentially millions of dollars.

How It Works

Sapient bypasses costly building auditing and installation costs. And its products require no electricians or subcontractors. Customers give Sapient the layouts of their buildings on its web app. Sapient figures out how many smart outlets customers need and ships them out. Customers scan the back of each outlet or power strip and plug in. It takes 10 seconds per outlet. And users immediately gain control of more than 36% of their energy consumption.

Sapient’s hardware-as-a-service model charges a small upfront setup fee and a recurring annual service fee. It avoids the historic pain points of long sales cycles and large upfront capital expenditures that building automation and energy management companies have had to grapple with in the past.

Sam is developing Sapient’s core technology suite. He graduated from the University of Pennsylvania with a degree in applied physics and with research interests in quantum computation and quantum information technology.

From my conversations with him, I can tell he understands the opportunity and what he needs to do to realize its full potential. He is partnering with a capable co-founder, Martin Koch, who has a background in real estate and law.

The Big Picture Indicates Huge Potential Growth

Sapient is targeting a huge market, addressing a need that is real and growing, and offering an elegant and affordable solution. It’s also using technology that isn’t new, but that has never been tried before in combination with AI designed specifically for enterprises and smart outlets.

All of this indicates that Sapient is moving rapidly toward success. My question: Is it moving too fast?

I’ve never asked this question before. Most of the time, I ask founders how they could move faster toward monetization and self-sustainability. This is a much better problem to have.

Sapient doesn’t feel the need to hire salespeople right away and expand marketing since its large pipeline developed in the blink of an eye. It plans on hiring more engineers first, then more customer service people who will make sure customers are being taken care of.

Sapient is having a pre-hockey-stick moment. Absent a major setback, this company’s stunning initial growth should be followed by another surge in projects, customers and revenue beginning next year.

Given the rapid growth of Sapient’s pipeline and its utter lack of competitors in a space crying out for a solution, this company is in an ideal position to follow up on its own early and stunning success with a repeat performance in 2020.

How to Invest

Sapient is raising up to $1.07 million on Republic. If you don’t already have a Republic account, you can sign up for one here.

Once you verify your account and are logged in to Republic, go to the Sapient deal here.

Now click the blue “Invest in Sapient” button. Enter the amount you want to invest, starting as low as $50, and proceed through the required steps. Be sure your investment is confirmed, then you’re good to go.

Risks

This opportunity, like all early-stage investments, is risky. Early-stage investments often fail. Sapient might need to raise another round of funding in a year or two, if not sooner. If it executes well, this shouldn’t be a problem. But that’s a risk worth considering when investing in early-stage companies.

The investment you’re making is NOT liquid. Expect to hold your position for five to 10 years. An earlier exit is always possible but should not be expected.

All that said, I believe Sapient offers an attractive risk-reward ratio here. ■

Medical Cannabis Revolution

The Amazing Science of Cannabinoids

By Adam Sharp, Co-Founder, First Stage Investor

Cannabis is a truly remarkable plant. At times, its medical applications seem too good to be true. How can a single plant possibly treat all of the following conditions?

• Epilepsy
• Autism
• Parkinson’s disease
• Depression
• Anxiety
• Lack of appetite
• Nausea
• Addiction
• Autoimmune diseases
• Glaucoma
• Inflammatory bowel disorder
• Irritable bowel syndrome
• Multiple sclerosis
• Stress
• Traumatic brain injury

The answer to “How is this possible?” lies in cannabinoids, a family of 113 compounds found in the cannabis plant. THC (tetrahydrocannabinol) is the most well-known cannabinoid. It produces the “high” effect associated with marijuana. It’s also a painkiller and has several other useful medical properties.

CBD (cannabidiol) is the next best known cannabinoid. It has been proven to be an effective anticonvulsive in clinical studies. And a drug based on it has been approved by the FDA and is used in countries throughout the world.

We are just beginning to scratch the surface as to the potential of cannabinoids. Many researchers believe these powerful compounds are most effective when used in combination, as they are found in cannabis plants.

Cannabinoids are not the only medically active compounds in cannabis either. Terpenes also show tremendous medical potential. But today we’re going to focus on cannabinoids and the amazing way they interact with our bodies.

The Endocannabinoid System

Cannabinoids interact directly with the human endocannabinoid system (ECS). The ECS is like a communication system within our bodies. It is an integral part of our nervous system. The ECS is spread throughout the brain, spinal cord, reproductive systems and rest of the body. It regulates things like hunger, sleep, pain sensation, our immune system, metabolism and mood.

For example, the ECS is in charge of keeping us motivated. It rewards our brains when we achieve something. It’s also responsible for the euphoric feeling that runners experience during strenuous exercise (a “runner’s high”).

Many people believe the ECS is what keeps our bodies in “homeostasis.” This is the condition achieved when the body is in a state of balance – when things are running smoothly.

Sometimes people’s endocannabinoid systems fail them. We don’t know why yet. But cannabinoids are our best hope of treating these deficiencies, in addition to a lot of modern diseases.

Unlocking Cannabinoids’ Potential

So far scientists have discovered 113 unique cannabinoids in cannabis. These compounds interact with the ECS in specific ways. Some have painkilling effects, while others calm inflammation or help us sleep. Each cannabinoid can unlock a specific type of endocannabinoid receptor, triggering a different response.

Like other plants, cannabis can be selectively bred for desirable traits, such as yielding higher or lower levels of specific cannabinoids.

The two most common forms of cannabis today are marijuana, which is high in THC and terpenes, and hemp, which produces strong fiber and CBDs.

New strains are being bred that contain high levels of other promising cannabinoids, such as THCV (tetrahydrocannabivarin). THCV is being called the “new CBD” due to its wide range of therapeutic potential. It is being investigated by biopharmaceutical company Liposome Formulations for its possible brain-enhancing effects. There’s also CBN (cannabinol), which can treat insomnia and has antibiotic and anti-convulsive properties, among others.

(Side note: The genetics and breeding side of cannabis is one of the most interesting areas of investment. Unfortunately, there aren’t a lot of good publicly traded stocks in this area, but we at First Stage Investor are watching for opportunities.)

Now consider the fact that research on cannabinoids is just getting started. In fact, the ECS was discovered only in 1988! And the global ban on cannabis research is still in effect for the most part! Real research is happening in only a few parts of the world. We’re at the very beginning of a major shift in medicine.

Cannabinoids represent an unrivaled treasure of medical potential. It is so incredibly rare to find one compound that interacts with our bodies so effectively. But to find 113 such molecules? It’s insane. And based on what scientists find in these little miracles, synthetic compounds will be developed that target conditions the existing 113 compounds can’t.

Investing in the Future

We’re not going to sit idly by as this medical revolution happens. So we’ll soon be adding a new cannabis portfolio to First Stage Investor. It will be included with your current subscription and will focus primarily on the medical side of cannabis. That said, we won’t ignore amazing opportunities on the recreational side.

I suspect most companies will continue to operate in both the medical and recreational sectors. The line between medical and recreational will also blur. Some people will smoke pot instead of taking an antidepressant, for example. This is going to devastate Big Pharma’s business model, which is (in part) why I don’t own any stocks in that area.

However, I do believe the recreational side has more risk than the medical one. We don’t know if the federal government will legalize recreational marijuana anytime soon. It’s more likely to approve medical marijuana first (the FDA has already approved its first cannabis-based drug, Epidiolex).

Our first cannabis pick, Canopy Growth Corporation, is a great example of this mix of medical and recreational. The company owns a huge piece of both markets in Canada. It’s also investing $500 million in hemp in the U.S. These are setting Canopy up to be a giant in the industry within a decade.

It’s very early in the medical cannabis revolution, and our aim is to find the best opportunities and ride them to profits. ■

Cannabis Earnings Roundup

Cannabis Earnings Roundup

By Vin Narayanan, Senior Managing Editor, First Stage Investor

Evaluating earnings reports for cannabis stocks can be tricky. The marijuana market is expanding rapidly and unevenly because of legal and regulatory concerns. And stock prices can move sharply based on regulatory news.

A prime example of this is New Jersey’s push to legalize recreational marijuana. Democrats control the governor’s mansion and both chambers in the Legislature. So when a March vote was scheduled to legalize pot, the industry – and analysts – got excited. And U.S. pot stocks went up.

There was one problem, though. New Jersey doesn’t work like the rest of the world. (I was born in Jersey City, so I’m allowed to say that.) Even when everyone agrees, there’s enough infighting that nothing passes on its first try. And marijuana doesn’t fall into the “everyone agrees” category.

So it’s going to take two or three scheduled votes before it actually passes. That’s normal. But it is expected to pass. So don’t let price volatility surrounding this affect your mindset. But do take New Jersey’s (and other states’) impending legalization into account as you evaluate investment opportunities.

Remember, this is a long-term play.

Knowing that, you can reasonably expect marijuana revenue to increase with new markets coming online. That’s good news for the cannabis industry as a whole. And it’s particularly good for companies that have the infrastructure and cash to move into and operate in multiple markets and niches. Which brings us back to earnings reports. Just how should cannabis investors look at them?

As First Stage Investor co-founder Adam Sharp has written before, the marijuana industry is poised for major growth. It’s not often a $141 billion industry moves from illegal to legal. And we’re still in the early stages of the industry’s growth period. We’re barely scraping the surface of cannabis’ medical potential.

So as we look at earnings, we’re focusing on growth and growth potential. Are these companies growing? And are they making the right strategic decisions to grow in the future? What projects do they have coming online in the future? Are they on track or falling behind?

Other metrics, like how much money they’ve lost (or made), matter. If a company is just burning through cash, that’s a warning sign. But growth is the key driver here.

Earnings Call

Canopy Growth Corp. (First Stage Investor portfolio pick): It was a great quarter for Canopy Growth. The company recorded $62.2 million in revenue. In the same quarter last year, it had just $7.3 million in revenue. That’s a 749% increase. Canopy Growth reported a loss of $90.6 million. Most of the losses were paper losses (adjustments to convertible notes). If you take away the paper losses, Canopy lost $50.6 million. Canopy Growth also acquired Storz & Bickel, which makes medically approved vaporizers.

Tilray: Tilray reported quarterly sales of $15.5 million. That’s up from $5.1 million in the same quarter last year. Tilray also reported a $31 million loss. The company lost $2.9 million in the same time period last year. The company also completed the acquisition of Greenhouse Grower, which will significantly boost its production in Canada. And it bought Manitoba Harvest, the world’s largest hemp food company.

Aurora Cannabis: Aurora reported quarterly sales of $40.6 million. That’s up from $8.8 million in the same quarter last year. Aurora lost $178 million in the quarter. Most of those losses can be attributed to the declining value of the various cannabis stocks that Aurora holds. Aurora also acquired Whistler Medical Marijuana, which will increase Aurora’s medical marijuana supply in Canada. It will also increase Aurora’s access to the Australian market.

Curaleaf: Curaleaf operates in 12 states in the U.S. It reported fourth quarter revenue of $34.9 million and total 2018 revenue of $87.8 million. That represents 43% quarter-over-quarter growth and 209% year-over-year growth. Curaleaf reported a net loss of $16.5 million for the quarter and $61.8 million for the year. Curaleaf also acquired some new cannabis dispensaries in California and Nevada and was awarded a processing license in Ohio.

It’s incredibly satisfying to see cannabis companies starting to put up strong revenue numbers. And there’s no industry in the world right now with a brighter outlook than cannabis. We’re going to be paying a lot more attention to this market and providing more recommendations in the near future. Stay tuned. ■

JPMorgan Creates Its Own Coin

Evolution vs. Revolution

By Andy Gordon, Co-Founder, First Stage Investor

Remember the Terminator movies?

The robots sent Arnold into the past to destroy humankind’s future and forever put us under the boot of a smarter and stronger robotic race. The movie franchise launched a debate on the danger of robots that still rages today.

So what if I told you I see this same plot playing out before our eyes… but with a twist?

Just replace the robots with the big banks. Banks obviously can’t travel back in time, but they’re doing the next best thing. They’re foisting their own Skynet-like technology onto the present world in order to destroy a future where big-bank control of our money and finances is a distant memory.

Bad science fiction, you say? Not the case, unfortunately. You see, banking is one of the biggest industries currently in the crosshairs of decentralized blockchain applications. Blockchain uses code to automate and confirm transactions, which means it cuts out the middleman (a role the banks profit from, big-time). And it upends every industry where middlemen are used. So the banks are beginning to draw battle lines.

JPMorgan Chase is leading the offensive. It has created its own cryptocurrency – the JPM Coin (with real-world trials in a few months).

It’s a classic “stable coin” whose value is tied to the U.S. dollar. The coin will run on top of Quorum, the bank’s privately developed, controlled and owned version of the Ethereum blockchain. JPMorgan says it will make cross-border payments and settlement of security issuances faster and simpler. The coin can also replace U.S. dollars held internationally by subsidiaries of major corporations.

New and faster technology isn’t such a bad thing. But that’s all it is – a little faster than current tech. It would be an evolutionary step for how the world conducts its finances. But there’s nothing game-changing about it.

That’s no accident. Reinforcing the status quo perfectly suits the banks’ agenda and keeps intact the unholy alliance between governments, big banks and the hypotenuse connecting the two: fiat money. Widespread use of the JPM Coin would ensure the government’s unquestioned authority in controlling paper money… banks’ power in the global financial system… and, of course, the continued dominant position of fiat money.

That’s the trade-off you’re getting: faster settlements in exchange for the perpetuation of a deeply flawed status quo that stopped serving the interests of everyday Americans a long time ago.

It’s also no accident that JPMorgan’s private digital coin is being introduced right now. It’s a reaction to public blockchains, which are very different from private ones like JPMorgan’s.

These open-source blockchains are built on decentralized blockchain platforms, and they allow everybody to do all kinds of economic transactions at lower fees and without middlemen.

They’ve now reached a long-awaited inflection point. Progress toward a user-friendly and secure ecosystem is making significant headway behind the scenes. There are a half-dozen custodial solutions already in use or about to go live. SEC-sanctioned futures markets for bitcoin are operating without a hitch. Big companies like Fidelity and Nasdaq are developing cryptocurrency investment services. Bitcoin exchange-traded funds are probably right around the corner.

This kind of progress means we’re much closer to widespread use of public cryptocurrencies than was anticipated just a year ago.

Compare this version of the future with JPMorgan’s, where use of its JPM Coin is limited to the wealthy elite: “Only institutional customers passing J.P. Morgan [Know Your Customer guidelines] can transact with these coins.”

JPMorgan thinks it can leverage its global clientele to give it a big jump-start in the banks’ emerging war with public blockchains. Just listen to these quotes from Umar Farooq, JPMorgan’s blockchain lead:

• “Pretty much every big corporation is our client, and most of the major banks in the world are, too.” So, even using the token just among JPMorgan clients “shouldn’t hold us back.”
• “The applications are frankly quite endless; anything where you have a distributed ledger which involves corporations or institutions can use this.”

Could JPMorgan telegraph its intentions any more brazenly? We don’t need your permissionless, decentralized blockchain models, it’s saying. They’re unwieldy and slow. And, frankly, we think that nobody being in charge is NOT a good thing.

There’s a popular phrase among banks that encapsulates this attitude: “blockchain, not bitcoin.” It reflects their belief in underlying blockchain technology and skepticism of open-source cryptocurrencies backed by public, permissionless blockchains.

JPMorgan has been one of bitcoin’s most vocal critics. CEO Jamie Dimon has called bitcoin a “fraud” and has predicted that “it won’t end well.” What he didn’t say was that he hopes it won’t end well because he plans to use his own bank’s blockchain-based financial services to deliver a crippling, perhaps lethal, blow. Dimon wasn’t being completely forthright in his statements, but I don’t find it surprising.

Like a lot of bankers, he’s willing to use or co-opt blockchain technology for his own purposes but dismisses bitcoin (the first and most famous use of blockchain). And like a lot of bankers, he sees bitcoin as irreparably flawed with its slow speed, price instability, vulnerability to hacking and lack of interoperability.

The defense strategy against Dimon and the bankers is simple: Wait. At one time, the internet was an amorphous mess that users didn’t trust (Use my credit card online? Are you crazy?) and found basically useless. Crypto is currently in the equivalent era, still smoothing out the kinks.

If you trust the banks… if you think the relationship between big banks and big government is healthy and in your best interests… if you trust the government to astutely handle the next inflation cycle (there’s a first for everything)…

In other words, if you’re happy with the status quo… Then centralized blockchain solutions that enhance the power of banks while offering no significant relief from high fees are no big deal. But more and more people are dissatisfied with the status quo.

JPMorgan has issued the first salvo on behalf of big banks and big government. It’s presented us with a stark choice: centralized vs. decentralized solutions… evolution vs. revolution. To me, it’s a no-brainer. If public blockchains end up doing just half of what coin developers say they can do, we’re on our way to a brighter future.

But the ultimate outcome is anything but a no-brainer. The internet rolled over newspapers, brick-and-mortar stores, and dozens of other industries. That’s fun and games compared with what’s at stake now…

Who controls our money? Who owns our financial institutions? How will our access to digital assets be determined? We won’t find out for another few years. But the war for our future has already begun.

And bitcoin, like Arnold, has one thing to say to the big banks: Hasta la vista, baby. ■

Portfolio Update

Portfolio Update: Sickweather

By Andy Gordon, Co-Founder, First Stage Investor

In case you don’t remember this particular recommendation (it’s been more than a year since we introduced this company to you!), Sickweather uses groundbreaking technology to predict when and where people will get sick.

When we added Sickweather to the First Stage Investor portfolio last January, GlaxoSmithKline, Ketchum (a global PR firm), CVS, Walgreens, The Weather Channel and Pfizer were already using its breakthrough technology.

Now Sickweather CEO and co-founder Graham Dodge tells me the company has increased its revenue around 50%.

“Good, not great,” Graham says. “I expect sales and revenue to really pick up beginning this May.”

I spoke to Graham a few days before he was flying out to meet his new partner, Unum.

Unum is an employee benefits provider to large and small employers. It’s a large company covering 36 million people worldwide. And it’s ranked 267th on the Fortune 500 list.

Sickweather is making the short jump from predicting the prevalence of sickness by region (and now select major cities) to predicting absenteeism due to illness.

That’s a useful tool for an HR company.

With Sickweather, HR companies can give clients early notice when they need to staff up more than usual (and not lose money due to a lack of workers) or when they can save money by staffing down (because absenteeism is low).

Unum offered four of its large-employer clients Sickweather’s predictive absenteeism services in a pilot project.

It went so well that Unum and Sickweather are forming a joint venture arrangement that gives all of Unum’s clients access to Sickweather’s services.

The pilot project ended in March. The last details of the joint venture are being finalized this month. And the joint venture should go live in May.

When it does, it will become Sickweather’s biggest revenue driver.

[Geek alert: Graham is negotiating a payment mechanism called Per Employee Per Month fee, or PEPM. Sickweather needs to capture only a small slice of Unum’s total employee universe of 36 million to see its revenue spike.]

Graham expects revenue to top $1 million this year (the company’s fiscal year ends June 30).

Next year, he anticipates revenue will climb to between $2 million and $4 million.

But he’s also making room for an “edge case” scenario where the Unum-Sickweather joint venture generates significantly higher revenue.

Sickweather is also on the verge of becoming self-sustaining, with revenue close to exceeding costs.

“We’re a couple months away,” Graham estimates.

Sickweather is in the midst of a bridge round on SeedInvest right now.

The valuation cap for the bridge round is $7 million. When we recommended Sickweather, its valuation was $3.75 million (pre-money).

Graham tells me that all of his investors in the previous round are coming back for more, including Stout Street Capital, a Denver-based venture capital firm that led the previous round and is leading this one as well.

The minimum investment is $5,000, and the round is open to accredited investors – that is, only those earning at least $200,000 ($300,000 as a couple) OR those with a minimum net worth of $1 million (excluding their primary home).

The round ends April 19. ■

Portfolio Update: WhiteClouds

By Andy Gordon, Co-Founder, First Stage Investor

WhiteClouds is an on-demand industrial-scale 3D printing operation.

It provides a cloud-based software platform with a full-color 3D printing facility to give companies a wide range of impressively detailed products whenever they want.

Since we recommended WhiteClouds nearly two years ago, it’s made a major strategic shift in focus and now makes much bigger products than before.

CEO Jerry Ropelato says there’s much less competition in this space.

How big are the products?

The company recently printed an 11-foot statue for DreamWorks. WhiteClouds finished it in just a few days.

“Our operations are getting faster and more efficient,” says Jerry. (Of all the products he mentioned, my favorite has to be the 6-foot-tall cupcake.)

WhiteClouds has also picked up some very big customers recently.

Jerry told me I can’t mention names, but one is a major private-sector space company.

WhiteClouds built a prototype thruster for its new rocket.

Other companies include the world’s largest anatomical models supplier, two of the biggest healthcare 3D visualization developers in the U.S. and Europe (used by 6,300 healthcare providers), and two of the biggest trade show organizers in the world (each does roughly 15,000 shows a year).

Trade shows use precise 3D colored props to showcase their industries.

The trade show companies (two of 20 trade show companies it works with) have been WhiteClouds’ biggest customers this year.

Its largest customer acquisition this fiscal year (so far) is Mars Petcare, a huge veterinary surgical company. It took a lot of work, Jerry says. “They’ve been ‘trying us out’ for the past 23, 24 months,” he said. “But it was worth it.”

Mars has 1,870 surgical centers.

And WhiteClouds has now been cleared to provide pre-surgery 3D models of the animal patients to all of them. These models minimize the time an animal is under anesthesia.

The same benefits can be applied to human surgeries. Jerry told me that the experience and reputation WhiteClouds will gain in the vet space will pave the way for it to use its 3D printing technology for complex surgeries in humans. “It’s our next big step,” he says.

It’s shaping up to be a critical year for the company. WhiteClouds is once again raising on Wefunder in order to expand its sales and marketing efforts. Jerry anticipates revenues will jump to $6 million this year, from $3.5 million in 2018.

While he says the bulk of the sales will come in the latter half of the year, the company began its raise on Wefunder with 70 Fortune 1000 customers. The following month, it acquired 10 more.

When I asked Jerry what preparations he’s making to ensure the company can handle a spike in business, he said they plan to rely on third-party 3D printing farms.

And he assured me expansion will be achieved without a jump in capital expenditures.

WhiteClouds is raising at a valuation of $22 million, a 22% increase over the $18 million valuation it had when we recommended it.

If all goes according to plan, Jerry says, it’s very possible the company will be doing a Series A round toward the end of the year. ■