Getting Started in Crowdfunding Investing

[Note: I am not an owner or employee of any of these firms, and no one asked me to do this.  I am providing this solely as information based on my recent personal experience using the Platforms]

For a bit over a year, federal law has permitted just about any John or Jane Doe to invest in Business Start-ups or expansions, an activity usually reserved for the wealthy or "accredited investors."  Today, often in increments as low as $100 to $500, individuals can get in on the ground floor of a new venture.  These investments may take the form of actual stock equity (which can not be easily traded or sold, and are not listed on a stock market); convertible notes (loans which convert to equity, or stock, if certain conditions are met); and revenue sharing, which acts as a loan paid back not over a specific time period, but as a function of the revenue received by the company.  The goal on these revenue sharing agreements is to pay back the investor anywhere from 1.2 times to 2.0 times their investment (although I have seen one shooting for 3x investment).

And of course, like any company, all investment is at risk and you could lose everything.  No one, of course, is hoping for that, but it is a possibility.

All of the platforms below are simply web-based platforms designed to 'match' potential investors with companies seeking to raise funds.  Once the investment is completed, the investor deals directly with the company they have invested in and the platform has no further intermediatory role between you.

Each Platform, with small exceptions, is structured, visually, in a fairly uniform format, so getting familiar with one makes the next one easier.  In no particular order, the five that I have found easiest to use are these:

1.  START ENGINE - This is the largest of the five I am including. s of this date, 68 active companies are listed, representing a broad variety of industries. They provide an excellent, clear tracking of the status of your investments during the process, and are active in sending emails announcing news and updates. If you need to cancel an investment, they are efficient and no-hassle. Each company has a very visible "Terms" button which explains clearly what kind of investment is being offered, with some minor exceptions. Unlike many platforms, they actually permit the use of credit cards (Use with Caution!) to make investments.

2. NEXTSEED - Next Seed is small (7 active companies), with a heavy emphasis on "mega-bars" and drinking/entertainment venues.  Of all the platforms, it provides the *clearest* indication as to the 'terms of the deal' and the hoped-for returns. The Chat function with the platform is efficient and helpful.

3. WEFUNDER - Another large platform, there are 45 companies currently raising funds. There are an excellent set of FAQs for new investors that should be read thoroughly. The site features many tabs to search for precisely the type of company you wish to invest in (tech, main street, software). On the down side, the terms of each deal are not big and bold: they are printed in fine type at the bottom of each company's icons in just a word or two. By clicking on a company icon, you can see the terms in more detail.

4. MICROVENTURES This is actually a partnership (not entirely explained) using First Democracy FV as a bridge between Microventures and Indiegogo, a respected company which adds some credence to the viability of the fundraising companies; there are 7 companies currently listed.  Some of the companies have very clear terms of the deal, while others take a little more digging.

5. FUNDANNA - Whereas many crowdsourcing platforms steer away from start-ups involved in the cannabis industry, Fundanna focuses on such companies. The 6 companies listed have *very clear* terms, and have done a good job explaining their business plans and approach to their businesses, with extensive information for the investor. One gets the impression that Fundanna is a small operation: the website has a few glitches, and is not entirely intuitive, and the chat function is not always on...but when responding to email, it is clear that they are giving highly personal responses rather than pat answers. One nice touch is that they actually accept old-fashioned checks in addition to bank withdrawals for payment. 

I have used all five of these of that platforms, and will continue to do so as I seek to diversify my investments, which currently include a race horse, a vertical farming operation, an organic dairy, a cannabis growing facility, a boxing club, a Brazilian liquor company, and a sports bar.

In addition, some states have set up Non-profit platforms (Such as MILKMONEY VT) to assist local in-state businesses, and which are often only open to in-state residents.

Happy Investing!  Be smart and be cautious, but know that you CAN get in on the ground floor of the "Next Big Thing!"

Gov. Scott - NO New Firearms Control in Vermont!

Dear Sen. Nitka,

I am a resident of Chester, and am writing to you regarding the proposals in the Senate regarding increased firearms regulation. I am extremely concerned for the ramifications of some of these proposals. PLEASE hear me out.

I am a retired teacher, who chose to move to Vermont - in spite of the financial burden on retirees compared to other states - precisely because of the life style here.  I am a fairly liberal gay man who, more than once, has found myself a target on the streets of New York and elsewhere.  To protect myself, I carry a firearm, because I am my own best line of defense when these incidents occur.

I used to live in Massachusetts.  In spite of currently being in the US Coast Guard Auxiliary out of Station Burlington, with Homeland Security Clearance, having NO criminal record of any kind, and having been fingerprinted with the FBI no fewer than 11 times (for Coast Guard work and during the adoption of 6 children and foster care of three others) - the background check and license I requested there TOOK EIGHT MONTHS to process (even though the law there said 60 day maximum).  No one should have to wait that long to exercise a Constitutional right to protect themselves!  The background check there was a total disaster. I moved to Vermont for several reasons, but paramount was the fact that it is the safest state in the union, and I don't have to beg for permission to exercise my right to self defense.

In a vacuum, Universal Background Checks seem to make sense, to weed out those with criminal records and mental health issues, and that seems to be driving this initiative, but there are terrible unintended consequences:

1) The majority of people with criminal records are non-violent offenders, most for drug offenses, and many with marijuana convictions - ironic, considering we have just legalized marijuana in Vermont!  A background check will not only flag these people, but will disproportionately affect minorities who are caught up in this system (and yes, I have an inter-racial family).  Progressives are appropriately trying to seal these types of convictions so that non-violent offenders can be re-integrated into society and get jobs - and yet this throws that entire effort into chaos.

2) As a teacher, I worked frequently with Veterans, many of whom return from overseas and are assisted with mental health counseling for PTSD.  These are men and women who know how to safely use firearms better than most - and yet, they are precisely the ones who will be caught up in mental health check.  Are we now going to require that physicians and counselors report the details of privileged patient-client information to a government database?

Similarly, the effort to raise the age for purchase to 21 is an insult to the people who we consider old enough to vote for you at age 18.  At 18, they can join the military and carry military-grade automatics, and they can be trusted as armed police officers in our Towns...but they would not be able to purchase a hunting firearm in a state with a long, proud history of hunting?!

I realize that in the wake of the tragedy in Florida, people are emotional and looking for "government to do something;"  and yet, this is precisely the time when legislators make poor choices.  The 'crisis of the moment" lead to the internment of Japanese-Americans in WWII, and it lead to the Patriot Act and FISA courts - both examples of terrible losses of Constitutional Rights as a result of an emotional reaction to tragedy.

I am asking you to OPPOSE any effort to restrict the firearms laws here in Vermont.

Thank you,

Thomas T Simmons

The Investment Series....

Many years ago, when I first began teaching, I made a decision that most of my fellow teachers did not understand: I opted out of the state Retirement System.  I gave up a guaranteed pension for life after 20+ years of service.  Instead, I chose an Optional Retirement plan, whereby I invested and controlled my own contributions.  Now that I've "retired," that decision is paying off.


Now, rather than waiting for a monthly check from the state, I have taken my stash of cash with me, to use as I see fit. And having spent the last 20 years teaching Economics & Business, and working with young entrepreneurs seeking to start their own businesses through the Grinspoon Entrepreneurship Initiative, I am now entering a new phase of "work:"  using my accumulated retirement funds to invest directly in new and growing businesses. 

We're not talking stocks here: we're taking making loans and buying equity in small family businesses that are not traded on the markets. It is probably one of the most exciting and rewarding things I have ever done.

After planning for this for the past year, I have eight deals in various stages of closing.  And so today, I reveal my first investment:

Green Mountain Organic Creamery is a 20,000 sq/ft dairy processing plant located in Hinesburg, Vermont. GMOC was founded by Cheryl and John “JD” Devos, organic dairy farmers from Addison County, Vermont. Cheryl and JD own and operate the 200 cow, Kimball Brook Farm, which is capable of producing 3,400,000 pounds of milk per year. GMOC purchases its organic milk primarily from the Farm at fair market value prices and then produces and distributes certified organic, Vermont milk and value-added milk products (flavored milk, cheese, butter, etc.) throughout Vermont, New England, and New York.

"But...My ancestors came here legally!"

To all my 3rd and 4th generation-American friends who are complaining about immigrants who "broke the law" and came here "without papers"....how the hell do you think YOUR ancestors got here? And before you shout out, "They came legally and went through all the paperwork!," listen up.

No, they didn't. They didn't have paperwork. Your Irish ancestors who arrived in the "coffin ships" during the famine had no papers. Neither did your Greek, Italian, and German ancestors fleeing war.

Many did not know what day they were born on, because they didn't have nice pictoral calendars on their non-existent refrigerators. In fact, they were born at home, and had no birth certificates. They not only lacked a college degree, they lacked a high school degree. They had no social security cards or driver's licenses, because they didn't exist.

They arrived penniless. Paperless. With little knowledge of US government, the English language, or basic literacy. They arrived at Ellis Island, had an eye test and a TB test, and some official gave them an "americanized" name because most didn't know how to spell their own names so the immigration officers guessed.

The Dreamers you're bitching about now? *These people are no different than your grandparents and great-grandparents, folks.* It's just that now you've 'made it' so you want to close the door on the next wave who just want a better life.

Before you bitch about them, go into a quiet room and ask your great-grandma up in heaven what she would say about the immigration experience, the hope of America, and the heartbreak and obstacles she encountered. Ask her what she would have done if after being here 15 years, she was threatened with being
sent back to Europe. And ask her how *she* sees those threatened by Trump's reversal of DACA.

End of rant.

Why the 20% Tariff on Mexican Goods Could be an American Economic Disaster

In any basic Economics class on Trade, I ask my students why they don't raise their own sheep, harvest the wool, process it into yarn, and make their own clothes. I ask why they don't set up a greenhouse, grow their own coffee beans, and roast their own coffee. I ask why they don't chop down their own tree, mill it with the appropriate tools, and make their own door molding instead of running down to Home Depot.

Intuitively, students understand how ridiculous this is. They conclude that while they could, if absolutely necessary, do these things, it is highly inefficient. The time and effort needed to undertake these actions means would require so much of their effort that they would have to give up engaging in other activities - such as washing their clothes, going to work, or studying for school. They understand quite easily that it makes far more sense to do what they do best - wait tables, work at a retail store, stock items in a warehouse - and then use the fruit of their labor to purchase those goods they do not or can not make as efficiently (such as a T-shirt, a can of coffee, or a piece of lumber.)

That, of course, is the basis of trade: nations do what they do best, and trade for those items that others produce more efficiently.

Mexico is the United States' third largest trading partners. In spite of the social media comments by those who insist they don't buy Mexican goods anyway, we import - quite cost-effectively - billions of dollars of goods from Mexico annually. Beer. Washing Machines. Chevy and Dodge Trucks. Medical Equipment. The United States imports a total of about $295 billion per year from Mexico, including $74 billion worth of vehicles, $63 billion of electrical machinery, $49 billion in machinery and $21 billion in agricultural products. Mexico is the second-largest supplier of agricultural imports to the United States: tomatoes, limes, lettuce, avocados, and more.

Trump's current proposal is to pay for his wall with a 20% import tariff on Mexican goods. Applying this 20% tax to $295 billion worth of imports would result in an increase in prices to the tune of almost 60 Billion dollars annually.

How would this affect Americans?

Well, once again, let's break this down into understandable personal transactions.

Let's say that I have $100 in my pocket. I go to the store to purchase a tricycle for my child, and it costs $50. I can buy this tricycle for $50, and still have another $50 left in my pocket to spend elsewhere - a pizza for the family for dinner, a bouquet of flowers for someone on their birthday, and one or two new pair of blue jeans.

Now let's say that tricycle was made in Mexico, and now there is a 20% tax on top of that price. Instead of $50, that tricycle now costs me $60, and I purchase it. But wait, now I only have $40 left in my pocket instead of $50 - in other words, i have $10 less in disposable income than I had before.

Who loses? I have to give up some other purchase: either the pizza, or the flowers, or one of the pair of jeans. Some American business must lose out, because I no longer have the ability to purchase the same number of goods I could before.

Now multiply this times all the consumers in the American economy. With the tax, $60 Billion dollars less is available for spending in American businesses.

But it gets worse.

Let's say that, due to this new tax and my lower disposable income as a result, that I decided to skip buying the flowers at the local florist. If I *had* purchased those flowers, the ten dollar bill would not have sat in a cash register: the Florist may have used some of that to buy ribbon from a ribbon manufacturer, or to buy some vases in which to display flowers, or to pay their delivery man. And of course, that delivery man would then have used that income to purchase something for himself - perhaps a new windshield wiper, or a baseball for his child, or a ticket to a local performance.

And since I couldn't buy those flowers, none of those transactions took place.

And now, multiply that by $60 billion dollars which will no longer multiply throughout the economy.

The 20% tariff may be a great way for the President to buy political capital and 'pretend' that Mexico is paying for his wall...but the reality is that Americans will pay - over and over - as the economy takes a hit it can not afford to take.

----------------------

Thomas Simmons is a graduate of Hofstra University and Hofstra Law School, and has worked as an Economist for the last 30 years. He is the author of three college textbooks on Economics.

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36 States: 3rd Parties Polling Greater than Margin Between GOP and Dems

But...but.....a Third Party Vote is a wasted Vote! How many times have you heard that plaintive cry during the 2016 election season? Or the usual follow-ups: "A vote for Johnson (or Stein) is a vote for (Fill-in-the-Blank: Trump or Hillary!)"

It seems that every strong Clinton supporter, and every strong Trump supporter (or, perhaps more accurately, every Anti-Clinton Voter and every Anti-Trump Voter) has been working overtime in the mainstream media and on social media to convince people not to vote for a third party in 2016. "After all, they won't win...and that will only help Candidate X win," they say. They don't seem to understand that even if there were no third parties, I would not vote for either Clinton or Trump.

And to be honest, many of them try to give me constructive advice: "Please, this is a two-party nation, and only one of the two major party candidates can win. Why don't you work within one of the major parties to make effective change instead?," they plead.

Because history has shown that won't work.

There are only two factors that motivate party policy.

The first is money. And sorry, I don't have enough to influence either party in that respect.

The second is votes - and more important, winning elections.

When they win, they assume they touched on the right issues in the right way, and ran their ground games in an effective and successful way. If what you want is more of the exact same nonsense that both major parties have handed out, then by all means, vote for a major party. They will assume that their win means they did everything correctly, and you can expect more of the same in the years to come.

When they lose, they must admit that they did something wrong, and begin the process of looking at polls and votes and voter turnout rates to see where they lost ground.

Want to send a message to the major parties to make them seriously examine what they have done this election cycle? FORCE THEM TO RE-EVALUATE WHAT THEY'VE DONE.

It is a Media cliché at this point to speak of 'blue states' and 'red states' and 'battleground states.' But the number of states on the edge is far bigger than anyone could imagine this year.

This year, in 36 states, polls show that the combined support for Libertarian Gary Johnson and Green Party candidate Jill Green exceeds the margin of difference between the Republicans and Democrats. These states represent 358 Electoral votes: far more than the 270 needed to win.

The table below indicates the margin of difference between Clinton and Trump, and the combined 3rd Party support, as published by the Washington Post 50-state poll on September 6:

*Maine and Nebraska assign their electoral votes by Congressional District, increasing the volatility of the election in these states.

And, to further drive home the point, here is a map (courtesy of 270towin.com). Red states are runaway Trump, Blue states are runaway Clinton, and the Grey states represent those states where the 3rd Party support now exceeds the difference between them:

So there you have it.

Are the chances slim that a 3rd Party candidate will win the election outright? Yes.

Are the chances large that the 3rd Party vote might tip an election in some of these state one way or another? Yes.

Are the chances even larger that a party that loses a state - or even comes close to losing - will need to examine what they're doing wrong? ENORMOUS.

No, your vote for a Third Party is not a wasted vote; rather, it is the most significant way you have demanding change in the system.