The Happy Medium for Equity Crowdfunding

As a rule, most venture capitalists won’t invest in a startup unless they think it could return 100 times their money.

In fact, their business model requires that they bag a few 100X-plus “Unicorns.” It’s how they justify high fees (and make up for inevitable flops in such a high-risk, high-reward asset class).

So they swing for the fences every time.

As individual investors, we have no such restrictions. We have the freedom to invest in all sorts of businesses. Ones that are growing 35% a year, which no VC would touch, for example.

VCs are too busy chasing companies growing 35% month over month. Nothing wrong with that. But when you invest in mega-growth, you pay a premium.

So as we approach the full launch of equity crowdfunding on May 16, realize that not only will you have the chance to invest in those “potential 100X” startups, but you’ll also have the chance to invest in promising small businesses.

Investments that could return 5X, 10X, even 25X over the long run.

These are companies that would never even register on a VC’s radar. And most of them are far too small to attract private equity investments.

There are countless startups that fall into this “happy medium” category. And equity crowdfunding is going to do amazing things for many of them (and their investors).

Along those lines, today we’re going to look at a Maryland startup called MF Fire.

The young company has built a wood stove that burns cleaner than anything on the market today. And it’s equipped with a unique smart fan that can be controlled through its phone app.

MF Fire falls into what I’d call the “sweet spot” for equity crowdfunding. By this I mean it is a company that:

  • Would benefit greatly from having hundreds of investor “champions”
  • Is outside the traditional VC’s bailiwick
  • Has a founding team with deep and relevant experience
  • Could accelerate its business through the buzz surrounding an equity crowdfunding campaign.

A Smarter, Cleaner Stove

A friend introduced me to MF Fire, and CEO Paul LaPorte was nice enough to agree to an interview. Enjoy.

1. What makes your product superior to a traditional wood stove?

EI_mulciber3

Traditional wood stoves have no control, and are dirty and inefficient. We reimagined the wood stove as a clean energy source. By combining combustion science with advanced technology, we created a smart stove that delivers the cleanest burn ever achieved – 20X lower than new EPA regulations – less smoke than a single cigarette.

By creating and maintaining ideal combustion conditions throughout the fire box, we prevent the formation of soot, resulting in an ultra-clean burn with maximum efficiency. This unique approach delivers a perfect burn every time.

People are emotionally connected to fire – it delivers warmth, safety, hot food and fond memories. We maximized the viewing area – 180 degrees of glass – so you can see the entire flame. Because we constantly optimize each fire, we deliver maximum efficiency with an unparalleled viewing experience.

Our smart stove communicates with you through an app. With the app you can control the burn at the touch of a button. Just set your room temperature and let the smart controller do everything. The app also updates you on your environmental impact, emissions, fuel savings and total impact of the MF Fire community. Imagine remotely starting your fire on your last ski run, extending the burn time during a party or increasing the heat output to quickly break the chill.

2.  Why is this product and technology important to the consumer?

Clean emissions mean eliminating traditional health issues of wood stoves, such as heart and respiratory problems. Traditional wood stoves contribute about 40% of the nation’s harmful particulate matter. Our stove produces almost no soot and produces 30% less CO2 than traditional wood stoves. High efficiency means lower fuel costs. Smart technology enables the consumer to see the benefits and control the experience.

3.  How much funding have you raised to date and where has it come from?

We have received over $400,000 in non-dilutive grants and awards from MIT, TEDCO (funded by the State of Maryland) and the University of Maryland.

4.  Where is the company at today?

We’re ready for commercialization. This is a $5.5 billion market today and is ripe for disruption. We completed R&D and manufactured several iterations of products for testing. We shipped beta units to homes and have a backlog of customer requests for the product. We are about to start commercial manufacturing for the upcoming season. We’ve eliminated technology risk without equity dilution thanks to some wonderful supporters. We are now ready to focus on marketing, sales and commercial operations.

5.  How has reception been so far?

Reception has been terrific. We have received numerous industry awards, including…

  • Low Emissions Prize in the Wood Stove Decathlon
  • MIT Clean Energy Prize for Energy Efficiency
  • MIT Clean Energy Prize, the People’s Choice Award
  • Grand Prize at the Wood Stove Design Challenge.

We’ve been featured in many outstanding publications, including the Smithsonian magazine, Popular Mechanics, National Geographic, The New York Times, and Fast Company; and stove owners around the world have reached out to us and asked to be put on a reservation list.

6.  How did the company come together?

MF Fire was started in 2013 by Taylor Myers and Ryan Fisher, fire science and engineering students at the University of Maryland. They engineered the Mulciber, named after its Roman God namesake, to be in perfect control of metal and fire. Mulciber debuted in the 2013 Wood Stove Design Challenge and beat all industry competitors to win the Low Emissions Prize. A year later, it won the Grand Prize at the 2014 Wood Stove Design Challenge and two MIT Clean Energy Prizes. I was reviewing Ryan and Taylor’s application for TEDCO funding and was impressed. I reached out and started mentoring them, and a year later joined them.

7. Do you see an equity crowdfunding round in MF Fire’s future?

Very likely. Crowdfunding is an excellent option for us, and we’re actively exploring it now. This is a real consumer product with easy-to-understand value. People relate to it and can get behind it emotionally and financially. Crowdfunding allows us to connect with investors who believe in what we are doing. Our funding to date has been non-dilutive and we have additional matching funds available, making it an attractive opportunity for anyone investing in IoT (Internet of Things), clean or renewable energy, or green, sustainable lifestyles.


Thanks to Paul for taking the time. If you’re a pyro fire enthusiast like me, this is fascinating stuff. To be notified when the MF Fire stove is ready for sale, head over to MFFire.com and sign up for its newsletter.

And, of course, we’ll be sure to let you know if the team over at MF Fire decides to do an equity crowdfunding round.

Have a great weekend, everyone.

Adam Sharp
Founder, Early Investing