Deal Details
Security type: Convertible note (will convert into shares in the future at no higher than a $10 million valuation)
Valuation: $10 million cap
Minimum investment: $1,000
Investment Portal: SeedInvest
Raise: Series A
Link to invest
EnergyFunders is an investment platform focused on the energy sector. We have a chance here to invest in its Series A round at a $10 million valuation.
The investment platform is live and has raised more than $5 million for energy startups and projects so far.
Note: I like this deal quite a bit, and I’ve been watching it for more than a year. The founder has executed the business extremely well so far. The valuation is very reasonable, the team is excellent and it could be a very large business one day.
We have recommended investment platforms in the past, and those have done extremely well. In our previous service for accredited investors, we recommended investing in the early rounds of both SeedInvest and Wefunder. Both have grown tremendously since and are looking like they’re going to be great investments. More recently, we recommended another quality investment portal – StartEngine – for you, our First Stage Investor subscribers.
As you know, I’m extremely bullish on online startup investing. I think it’s the future of capital formation. Investing in the investment platforms themselves is a no-brainer. EnergyFunders is a great opportunity to do so.
Why I Like EnergyFunders
EnergyFunders is a more focused version of other equity crowdfunding platforms (like Wefunder, SeedInvest, Republic, etc.). It helps energy-related startup companies raise money from the public by selling shares. It also lets investors participate in oil and gas drilling and exploration.
Anyone can invest in the startup companies.
But the oil and gas drilling investments are reserved for accredited investors (those with a salary of $200,000 or more per year or a net worth of more than $1 million).
EnergyFunders built the oil and gas part of its business while awaiting regulatory approval to become an equity crowdfunding platform. And it raised an impressive $5 million for oil and gas deals on the platform – all in a short time.
EnergyFunders eventually wants to let everyone participate in oil and gas drilling deals. But for now, those deals are for accredited investors only.
EnergyFunders just received approval to become a registered crowdfunding investment platform, so it’s in the early stages of building up its portfolio of deals for retail investors. These will be investments anyone can make, and they’ll focus on things like oil field services, drilling technology startups and renewable energy (wind, solar, hydro, etc.).
You can see one of EnergyFunders’ first equity crowdfunding deals here (remember: it just launched). The listing is for a neat startup that builds software to help drilling operators be more energy-efficient.
EnergyFunders is based in Houston – the perfect city to build an energy investment platform. Founder and CEO Casey Minshew has a large network of entrepreneurs, operators, companies and drillers in the area.
Team
Over the past year, I’ve gotten to know Casey, and I’m extremely impressed with his vision and ability to execute. He’s an extremely active founder that effectively sets and meets goals, raises money, brings on new talent and sources quality deals for the platform.
He is exactly the type of founder I look for in an early-stage investment. Early-stage investments need somebody that can run the business, raise money and attract talent all at the same time. Casey has shown he can do so.
He’s also assembled an excellent team that has industry experience and connections. And the company is keeping costs low by compensating employees mostly with equity (stock options).
Read more about the EnergyFunders team here.
How to Invest
First, you’ll need a SeedInvest account. Sign up for one here if you don’t already have one.
Once you have created your account and logged in, go to EnergyFunders’ page on SeedInvest.
Click the blue “Invest in EnergyFunders” button. The minimum investment is $1,000.
Then choose your payment option and make sure you complete all the steps.
How You Can Help
One of the most important aspects of being an early-stage investor is adding value where you can. Startups do better when their investors help. It’s a big part of startup investing. And since we have a large membership base, we can leverage that to help our portfolio companies succeed.
The easiest way to add value to this company is to sign up on EnergyFunders.com and start looking at its deals. There will be more “deal flow” in the coming months now that the team is approved to operate and will finish a round of funding soon.
And if you have friends who like investing in energy, tell them about EnergyFunders.
Risks
Like all early-stage investments, this one carries significant risk. Invest only money you can afford to lose. Early-stage investments are calculated risks, and ideally you should invest in more than 10 startups to diversify your holdings.
This investment is not liquid. Expect to hold on to your shares for years. There may be a chance to sell in the near future on a secondary market being built by SeedInvest, but there’s no guarantee.
EnergyFunders will need to raise money within the next eight to 12 months. That will give the team time to grow the business and continue to raise capital. The founder, Casey, has shown himself to be effective at raising money in the past. (EnergyFunders raised $1.5 million before this round.) He also has a loyal user base that invested $106,000 in the deal on SeedInvest within the first day.
However, it is an early-stage private company, and naturally, there are risks.
The security you’re buying will convert into shares in the future as long as certain conditions are met. This is a standard early-stage deal using a “convertible note.”
Note: As always, our research is 100% independent. We don’t accept compensation from the investment portals or the startups we recommend.
Good investing,
Adam Sharp
Co-Founder, First Stage Investor