SEC Allows Crowdfunding

November 4, 2015 by Brian Benchoff 40 Comments

Kickstarter is not an investment, and no matter how many times this is repeated, you’ll find the phrase ‘my investment’ in the comments section of nearly every failed Kickstarter, Indiegogo, or other crowdfunding campaign. These campaigns are more closely related to group buys, and you’ll never find a Kickstarter offering equity or any sort of return beyond the latest electronic bauble, indie game, or graphic novel. Sure, you may bootstrap a business with that pledge, but don’t expect dividends from Ouya or Pebble.

Now, this may finally change. The US Securities and Exchange Commission approved new rules for crowdfunding, allowing startups to raise money from Jane and Joe Internet.

Previously, angel investments, venture capital, and hedge funds were not for the common man; these were high-risk investments, and only accredited investors could participate in these funding rounds. Accredited investors, at least in the US, are individuals with a net worth of at least $1 Million, or an income greater than $200,000 in each of the previous two years. The reason for only allowing accredited investors – depending on your interpretation – is to protect consumers or to maintain a perverse oligarchy by installing a glass ceiling over the middle class. Either way, normal people couldn’t invest in high-risk investments until now.

Congress has seen fit to create a new class of investor, and pursuant to Title III of the JOBS Act, the SEC recently released the complete rules for crowdfunded investment. In a massive, 600-page tome, all the regulations are laid bare, ready for the next serial entrepreneur who seeks at most $1 Million in investment for their next startup.

Investors and Startups

The rules issued by the SEC immediately place some limitations on what can be done under the new regulations. For startups, a maximum of $1 Million can be raised over a 12-month period.

For investors with an annual income or a net worth of less than $100,000, a maximum of $2,000 or 5% of annual income can be invested, whichever is greater. For investors with an annual income or net worth greater than $100,000, 10% of their income or net worth can be invested, whichever is smaller.

Brokers and Funding Portals

Investors and entrepreneurs are not allowed to keep their transactions to themselves; this is the SEC after all. Transactions will go through registered broker-dealers or something called a ‘funding portal’. These funding portals are forbidden from offering advice, making recommendations, advertising, paying employees a commission, holding securities themselves, and the regulation bars directors, officers, and partners of the funding portal from holding investments using that funding portal’s services.

It’s The Complete Opposite of Kickstarter

Kickstarter was never known for its transparency. While the basic premise of crowdfunding the manufacturing of a few baubles or 3D printers is sound – it’s cheaper per unit to build a hundred of something than to build just one – the reality of actually building something meant Kickstarters failed – it’s exponentially harder to build ten thousand of something than it is to build a hundred. Add to this Kickstarter’s investments in campaigns featured on their website, and you have the recipe for practices that aren’t illegal but certainly don’t pass the sniff test.

The regulations put forth by the SEC turn the most common trope of the Internet economy on their head; companies responsible for bringing startups and investors together are not financially dependant on these startups. Companies can not raise more money than they could handle, and hopefully individual investors won’t take to crowdfunded companies like online poker and day trading.

Traditional crowdfunding has started a lot of great companies so far; the Form1 printer began as a crowdfunding campaign, and Reading Rainbow still lives thanks to a successful Kickstarter. With these new regulations come new possibilities for the latest startups, and more paths to success than a traditional angel investor or VC tycoon.

Amino Wants To Bring Bioengineering To Your Workbench

October 23, 2015 by Cameron Coward 28 Comments

As the maker movement has exploded in popularity in recent years, there has been a strong push to put industrial tools into the hands of amateur tinkerers and hackers. CNC mills, 3D Printers, and laser cutters were all extremely expensive machines that were far too costly for most people until makers demanded them and hackers found ways to make them affordable. But, aside from the home brewing scene, those advancements haven’t really touched on anything organic. Which is a deficiency that Amino, a desktop bioengineering system, is seeking to address.

Amino, created by [Julie Legault], is currently seeking crowd-funding via Indiegogo. Hackaday readers are more suspicious than most when it comes to crowd-funding campaigns, and with good reason. But, [Julie Legault] has some very impressive credentials that lend her a great deal of credibility. She has four degrees in the arts and sciences, including a Masters of Science at the MIT Media Lab.

It was for that degree at MIT that [Julie] started Amino as her thesis. Her plan is to bring the tools necessary for bioengineering to the masses – tools which are traditionally only available in research labs. Those tools are packaged into a small desktop-sized unit called Amino. Backers will receive this desktop system, along with the supplies for their first project. Those projects are predefined, but the tools are versatile enough to allow users to move on to their own projects in the future. [Julie] thinks that the future is in bioengineering, and that the best way to feed innovation is to make the necessary tools both affordable and accessible.

Continue reading “Amino Wants To Bring Bioengineering To Your Workbench” →

Kickstarting Even More Router-Based Dev Boards

April 22, 2015 by Brian Benchoff 41 Comments

The latest and greatest thing makers and IoT solutions is apparently router hacking. While most Hackaday readers lived through this interesting phase where Linksys routers were used to connect sensors and other such digital bits and bobs to the Internet a few years ago, SOCs have improved, and now there are router-based dev boards.

The latest is the Onion Omega, an exceptionally tiny board just under two inches square. Onboard is an Atheros AR9331 chipset – the same found in a number of cheap WiFi routers – attached to 32 pins breaking out GPIOs, SPI, I2C, and USB. With WiFi and Ethernet, this is a board designed to connect sensors, motors, actuators, and devices to the Internet.

This is not the only recent router-based dev board to make it to the crowdfunding sites. A week or so ago, the Domino hit Kickstarter, featuring the same AR9331 chipset found in the Onion Omega. The Onion does have a few things going for it – cloud integration, a web-based console, and an app store that make the Onion vastly more useful for the ‘maker’ market. The Domino has a boatload of pins available, and competition is always good, right?

Advanced Not-Reading Technology

April 6, 2015 by Brian Benchoff 174 Comments

Yesterday, there was a Hackaday post for a Kickstarter campaign. Because we force everyone to read every Hackaday post, there were some complaints and suggestions that we flag posts about Kickstarter campaigns. The most obvious solution to this problem of forcing people to read what they don’t want to read would be a UserScript or browser extension that automatically removes posts with objectionable tags.

It took 12 hours for [Daniel Ward] to lift you up to salvation, ending the inexorable toil you have all suffered under the thumb of idiotic and incompetent Hackaday editors.

[Daniel] wrote a UserScript for GreaseMonkey or TamperMonkey that looks at the tags for each and every Hackaday post. If a tag matches, “crowd-funding”, “crowdfunding”, or “kickstarter”, the post is removed from your browser.

It’s an astonishing advancement in state of the art, “not reading what you don’t want to read” technology. Bards and troubadours will sing of this day for years. Philosophers and theologians are citing this as evidence of something they’re calling, ‘free will.’ We don’t know who [Will] is, but at least he’s free now.

If that’s not enough, [RoGeorge] came up with an astonishing twist on this life-changing technology. By adding, ‘Arduino’ to the blacklisted tags, all posts tagged ‘Arduino’ are also removed. This can, of course, be extended to any tag. Imagine; a world where you don’t have to read what you don’t want to read. A futuristic utopia. Astounding.

A Cellular Dev Kit With A Data Plan

April 5, 2015 by Brian Benchoff 37 Comments

After years of futzing around with 433 MHz radios and WiFi, we’re finally seeing a few dev boards that are focused on cellular radio modules. The Konekt Dash is the latest offering that puts a small u-blox SARA cellular module on a board with a small ARM Cortex M4 microcontroller for a complete cellular solution for any project you have in mind. Yes, until we get radios that make sense for an Internet of Things, this is the best you’re going to get.

If the Konekt sounds familiar, you’re right. A few months ago, Spark introduced the Electron, a cellular dev board based on the u-blox SARA-U260 module that includes a SIM with a 1MB of data a month. Practically, it’s not much different from the Konekt, but the Dash and Dash pro offer battery management and a battery connector, two power supplies, and encryption from the board to a server. There are slight differences for about the same price, but that’s what’s great about competition.

The Konekt Dash is now a few days in to a Kickstarter campaign that includes as rewards a board and a SIM with a six months to a year’s worth of data. There are a lot of things that can’t be done with WiFi, Bluetooth, or other radio modules, and if you have something like that in mind, you won’t do better than a Konekt or Spark Electron.

When PayPal And Crowdfunding Don’t Mix

January 22, 2015 by Brian Benchoff 58 Comments

For the last decade or so, PayPal has drawn the ire of Internet commentators and people who try to do business on the Internet. The claims go from freezing the accounts of non-profits for months, earning interest all the while, ineffectual support, and generally behaving exactly like a bank but without all those nifty consumer protection laws on the books in every sane country. Then the founder of PayPal turned into Tony Stark and everything was cool again.

This doesn’t mean PayPal isn’t up to its old tricks, though. [Gareth Hayes], the guy behind the HackRF Blue, recently had a run-in with PayPal. The PayPal account associated with the HackRF Blue Indiegogo project was frozen shortly after the campaign ended. To unfreeze his account, [Gareth] was required to submit a few forms of identification and proof of residence. He could submit this via fax (‽) or through an ‘upload’ button in the PayPal resolution center that didn’t exist.

[Gareth] is not one to mess around, and it was only after several emails, ending with him demanding PayPal release the funds with interest and a few hours of consulting at $300/hr that the funds were released. When somebody is keeping $40,000 from you, it’s a good idea to play hardball. However, [Gareth]’s PayPal account was still frozen for the better part of three weeks. For a crowdfunding campaign, that’s three weeks that suppliers can’t be paid, components can’t be bought, and assembly can’t happen. For any campaign, PayPal is a liability.

This, unfortunately, isn’t anything new. Google News is littered with stories of PayPal withholding funds from crowdfunding campaigns. The message is clear: get your passport, driver’s license, utility bills, dog license, and fourth grade report card uploaded to PayPal somehow before the campaign ends.

Yesterday, [Gareth] received word that his account had been unfrozen, but not before he threatened the nuclear option and started letskillpaypal.com. A worthy cause if we’ve ever seen one.

The Hoverboard You Can Build At Home

October 21, 2014 by Brian Benchoff 160 Comments

Press embargoes lifted today, heralding the announcement of the world’s first hoverboard. Yes, the hovering skateboard from Back to the Future. It’s called the Hendo hoverboard, it’s apparently real, and you can buy one for $10,000. If that’s too rich for your blood, you can spend $900 for a ‘technology demonstrator’ – a remote-controlled hovering box powered by the same technology.

Of course the world’s first hoverboard is announced to the world as a crowd funding campaign, so before we get to how this thing is supposed to work, we’ll have to do our due diligence. The company behind this campaign, Arx Pax Labs, Inc, exists, as does the founder. All the relevant business registration, biographical information, and experience of the founder and employees of Arx Pax check out to my satisfaction. In fact, at least one employee has work experience with the innards of electric motors. At first glance, the company itself is actually legit.

The campaign is for a BttF-style hoverboard, but this is really only a marketing strategy for Arx Pax; the hoverboards themselves are admittedly loss leaders even at $10,000 – the main goal of this Kickstarter is simply to get media attention to the magnetic levitation technology found in the hoverboard. All of this was carefully orchestrated, with a ‘huge event’ to be held exactly one year from today demonstrating a real, working hoverboard. What’s so special about demoing a hoverboard on October 21, 2015?

I defy anyone to come up with a better marketing campaign than this.

The meat of the story comes from what has until now been a scientific curiosity. Everyone reading this has no doubt seen superconductors levitated off a bed of magnets, and demonstrations of eddy currents are really just something cool you can do with a rare earth magnet and a copper pipe. What [Greg Henderson] and Arx Pax have done is take these phenomena and turned them into a platform for magnetic levitation.

According to the patent, the magnetic levitation system found in the Hendo hoverboard works like this:

One or more electric motors spin a series of rotors consisting of an arrangement of strong permanent magnets.
The magnets are arranged in a Halbach array that enhances the magnetic field on one side of the array, and cancels it on the other.
By placing the rotors over a conductive, non-ferrous surface – a sheet of copper or aluminum, for example – eddy currents are induced in the conductive surface.
These eddy currents create a magnetic field that opposes the magnetic field that created it, causing the entire device to levitate.

That’s it. That’s how you create a real, working hoverboard. Arx Pax has also developed a method to control a vehicle equipped with a few of these hover disks; the $900 ‘Whitebox’ technology demonstrator includes a smart phone app as a remote control.

If you’re still sitting in a steaming pile of incredulity concerning this invention, you’re in good company. It’s a fine line between being blinded by brilliance and baffled by bullshit, so we’re leaving this one up to you: build one of these devices, put it up on hackaday.io, and we’ll make it worth your while. We’re giving away some gift cards to the Hackaday store for the first person to build one of these hoverboards, preferably with a cool body kit. The Star Wars landspeeder has already been done, but the snowspeeder hasn’t. Surprise us.