This week’s Investment Roundtable tackles critical trends in startup investing, exploring the concept of zombie companies with low growth and how it affects investors. The team also introduces new Kingscrowd raise page features, giving investors a closer look at updated financial metrics. The deal we review is Trevi Systems, a forward-osmosis desalination startup led by a founder with prior billion-dollar exits, offering promising growth but at a premium valuation. Finally, Brian recaps recent meetings with the SEC and Congress, where discussions covered improved investor protections, tax credits, and greater transparency in the crowdfunding space.
What are zombie companies, and why are they a concern for investors?
Brian explains that zombie companies are those still operating but with stagnant growth, tying up investor capital. Teddy adds that many companies raising again may need the funds to survive rather than grow, leading to slower revenue growth across the industry.
How can KingsCrowd’s new raise page features help investors?
Lea highlights the updated Financials tab, which includes the latest revenue and cash figures to provide investors with up-to-date financial information. Teddy discusses the importance of metrics like burn rate and gross margin for assessing a company’s financial health.
What makes Trevi Systems an interesting investment opportunity?
Lea describes Trevi Systems as a forward-osmosis desalination startup with promising traction and multiple revenue streams, including water treatment for agriculture and mining. Despite a high valuation, the company’s capital-light project funding approach and founder’s track record of prior exits add appeal.
What was discussed in the recent meetings with the SEC?
Brian shares insights from recent CFPA meetings with the SEC, where they advocated for searchable form C documents, better SPV disclosures, and a potential tax credit of up to $1,000 for investments in reg CF offerings.
