Why invest in startups? Investing in startup companies is a very risky business, but it can be very rewarding at the same time and startup investing can add diversification benefits to your portfolio. Having a diversified stock portfolio makes perfect sense from a financial perspective, and investing in startups can offer attractive financial returns to compensate for the risks taken.
StartEngine (OTCMKTS:STGC) is an equity crowdfunding with more than 500 offerings that have been successfully funded. The following startups have recently launched their equity crowdfunding campaigns and they seem attractive investment opportunities in various industries.
The 7 Best Startups You Can Buy on StartEngine Right Now
- Saucy Brew Works
- Detonation Space
- Skunk Brothers Spirits
These seven small startup companies have big ambitions. Grab hold and ride the rocket to the moon.
Saucy Brew Works
Saucy Brew Works is an Ohio-based production brewery with brewpub operations in both Cleveland, Ohio, and Detroit Michigan. The company has plans for expansion into 2023 and beyond, including expanding a production facility to double brewing capacity and additional brewpubs in other states.
Saucy Brew Works has won multiple awards for its beer and pizza and has a clear and ambitious business model. It supplies smaller and neighborhood-oriented pubs with a focus on winning in new markets, building community establishments and deploying capital efficiently.
This business philosophy’s emphasis on people and culture has gained traction, as the company was among the Top 35 breweries in sales for the entire state of Ohio last year. Additional revenue comes from launching new services and products, such as the opening of the company’s first Coffeehouse in Orange, Ohio in July 2020. There are plans for the expansion of the Coffeehouse in new regions and distributing the line of packaged Whole Bean Coffee at local grocery stores.
Saucy Brew Works raised $1,025,448 during a previous equity crowdfunding round. In the ongoing round, the minimum investment is $100 and the valuation is set at $113 million. There are 75 investors as of today and the price per share is $1.
When it comes to investing, you should always start with the business model. And when it comes to Bobacino, there are some key elements that make its business model especially compelling.
Bobacino has low costs, high quality and most importantly, high profitability. This company operates a fully automated boba bar that produces a variety of high-quality bubble teas. The philosophy of the business is to keep operational costs low and quality high.
According to the company “After becoming a staple in Asia, Boba quickly hit a global market value of $5.3 billion in 2019 and is expected to increase to $8 billion by 2024.” And there is a big opportunity here in the U.S., considered to be a very large untapped market for this multibillion-dollar industry.
Bobacino has already built a fully functioning prototype and the long-term plan is to place Bobacino stands in high-foot traffic areas such as colleges, shopping malls, airports, and business parks. These Bobacino stands serve customers automatically and all you need to operate a stand are a part-time employee to fill in ingredients, and a smart device.
The main advantages of running a Boba machine as a shop are flexibility, low costs compared to other traditional businesses, and a high-profit margin of 31%.
Bobacino has raised $35,197 from 24 investors so far; the minimum investment is $518.63 and the valuation is set at $7 million.
Alfadan is a maker of high-performance outboards, and says it has “created a proprietary, marine-specific outboard engine design that will revolutionize the boating industry.”
The company goes on to say that its “engines have at least 50% more horsepower, 50% less moving parts, and less weight which leads to better performance, less fuel consumption, and a much lower cost of operation.”
Reasons to invest in Alfadan? The global marine outboard engine market is large, forecast to reach $17 billion in 2025. The company claims it has a competitive advantage due to a four-cylinder engine design that produces greater horsepower, greater efficiency, and the best power to weight ratio compared to other marine engines that are outboard. Plus there is an experienced team working behind the scenes.
This brand new proprietary engine design seems to have plenty of potential in the global marine outboard engine market. The company has completed 33% of the development of the initial prototypes.
Alfadan has raised $1,063,180 from the previous equity crowdfunding round and in this round it has raised $68,662 from 44 investors. The minimum investment is $500, the price per share is $2 and the valuation is $32.6 million.
ICHOR is all about reducing emissions and increasing fuel economy. The company has developed RKI, a diesel fuel injector designed for heavy applications such as marine, rail, and truck industries.
A new technology that is called “BLUE FLAME TECHNOLOGY” has three main key features: an increase in fuel economy, reduction of particulate emissions, and a huge reduction in NOx emissions. The main goal for this innovative technology is to exceed the environmental emissions and fuel-efficient targets set by the USA and the European Union EURO 6 standards.
The solution that ICHOR offers will reduce emissions while improving performance and efficiency at the same time. It solves the problem at the engine, rather than after.
There are two main target markets, class 8 trucking and agricultural equipment. This company has traction, with rigorous testing, strong partnerships and a business model oriented towards consumer and environmental benefits.
ICHOR has raised $4,298 from seven investors, with a minimum investment of $246 and a valuation of $83.9 million.
Space: the final frontier. Detonation Space wants to transform the entire aerospace industry by making detonation engine technology fully commercial. The company has developed the LUNDET-7 detonation engine, a prototype engine that is 30% more efficient than traditional deflagration engines.
Key benefits of these detonation engines are that they are 40% lighter compared to other types of engines and therefore reduce pressurization requirements by 80%.
Detonation Space is raising capital to build a testing facility, with two patent applications pending and five more that are being prepared. The company has a bold mission statement, saying that “their detonation engine is a solution that will be a game-changer for any type of aircraft in any segment of the market.”
Applications include drones flying longer, aircrafts carrying more passengers, and rockets flying higher. How? With engines that are more efficient, available, and profitable.
The company is targeting aerospace, aviation, and drone markets having a total market potential of about 165 million units. If you want to invest in next-generation combustion engines then you should know that Detonation Space has raised $47,348 from 43 investors, with a minimum investment of $500 and a valuation of $15 million.
Skunk Brothers Spirits
Skunk Brothers Spirits makes high-quality grain-glass spirits in Washington state, specializing in Peated Bourbon, “Moonshine” Corn Whiskey, Sweet Apple Pie Brandy, and Seasonal Fruit Cordials.
The craft liquor market is large with a lot of expected growth in the future, even higher than the craft beer and wine markets growth seen in the past decades. This family-run distillery has dedicated customers and managed to double its sales year-over-year despite the economic slowdown due to COVID-19.
The traction is not unnoticed. The company has increased efficiencies since its last raise on StartEngine, and this means a doubled potential output. And by increasing the gross margins by 14% from 59% in 2019 to 67% in 2020, this is a very positive development.
The company has raised $61,166 from 91 investors with a minimum investment of $250 and a share price of $2. The valuation is estimated at $12.1 million. In the previous crowdfunded round Skunk Brothers Spirits raised $1,069,192.
This tech company makes next-generation intelligent robots that “behave like humans, making it easier to translate manual tasks into robotic behaviors in a way that’s safe and easy to interact with.”
The first commercial application has to do with robotic rehabilitation, and the prototype is under development. There has been a huge surge in demand for robotic automation and Roboligent wants to fill the gap, especially as service industries that require demanding and repetitive work have long suffered from labor shortages. Robots will be useful in these industries, but there is a big problem.
The robots used outside factories are considered to be unsafe for human interaction. The solution from Roboligent is a new robot that is safe and reliable for automating processes that potentially interact with humans, such for example filling the shelves in a supermarket. That means it can automate a wide range of manual tasks that require a list of features such as human manipulation, mobility and of course, intelligence. Safe for work.
The robotics market is a fast-growing segment. According to Business Wire:
“The global autonomous mobile robots market generated $29.3 billion revenue in 2019, which is expected to reach $220.6 billion in 2030. The market is predicted to witness rapid progress during the forecast period (2020-2030), with a CAGR of 18.3%.”
Roboligent has raised $85,366 from 44 investors. The minimum investment is $320, the price per share is set at $3.20 and the company has a valuation of $28.9 million.
On the date of publication, Stavros Georgiadis, CFA did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Stavros Georgiadis is a CFA charter holder, an Equity Research Analyst, and an Economist. He focuses on U.S. stocks and has his own stock market blog at thestockmarketontheinternet.com/. He has written in the past various articles for other publications and can be reached on Twitter and on LinkedIn.