In 1884, despite serious reservations, a 47-year-old man named Samuel L. Clemens climbed onto a bicycle for the first time.
He soon announced his verdict:
“Get a bicycle,” he urged. “You will not regret it, if you live.”
Clemens was the pen name for Mark Twain, and over the next decade, millions of Americans followed his advice. We’re lucky they did:
As The New York Times has reported, not only did the bicycle jump-start the process of American industrialization, but it gave birth to major innovations such as the pneumatic tire, ball bearings, and even the automobile.
Recently, however, I learned about an innovation to the bicycle itself. Essentially, it’s a new kind of bike — and 50 million of them were sold last year.
Today I’ll tell you what’s going on here…
And then I’ll tell you how you could profit from it.
The Ever-Popular Bike
More people than ever live in urban areas today, and traffic is at all-time highs.
That explains why alternative forms of “mobility” like bikes and scooters are finding new popularity.
But on a hot summer day, it’s no fun working up a sweat biking to work.
That’s where electric bikes come into the picture…
In 2013, about 25 million of these e-bikes were sold. By 2017, that number had doubled to more than 50 million. And according to Navigant Research, by 2025, worldwide sales of e-bikes will reach $24 billion.
But despite those big numbers, electric bikes tend to be too expensive or cumbersome for most consumers.
So a new start-up called GeoOrbital came up with an innovative solution…
The GeoOrbital Wheel
A few years ago in Cambridge, Massachusetts, a tech entrepreneur and an engineer from SpaceX teamed up to create a new kind of bicycle wheel.
This futuristic GeoOrbital Wheel converts any bicycle into an electric bike simply by replacing the front wheel with a “vehicle propulsion system.”
Here’s what its wheel looks like:
As you can see, it has no spokes:
Instead, it contains 500-Watt motors, a computer, and 36-Volt removable Lithium-Ion batteries that can power a bike at 20 MPH for up to 20 miles.
As reported in Inc Magazine, with a 60-second installation time and priced under $1,000, the GeoOrbital wheel allows people to use their current bike "to bicycle to work without sweating, or to ride via routes with hills that they would otherwise be unable to conquer."
And with more than 1 billion bikes already on earth, the potential market for such a device is enormous.
Progress To Date
GeoOrbital has received glowing praise:
The Boston Globe said that it’s “reinvented the wheel.”
Time Magazine said, "Swap out the old front wheel for a 21st-century one."
And The Huffington Post called its solution “revolutionary.”
In 2017, its first full year of sales, the company’s revenues exceeded $2 million.
But now it needs some capital to help grow more quickly.
Which is where you come in…
Investment Round
Last year, GeoOrbital raised capital from investors like you on a funding platform called StartEngine. It used those funds to increase sales.
Now, GeoOrbital is raising another $1 million on a platform called Net Capital. With sales growing, GeoOrbital needs capital to fund more inventory, do additional R&D, and increase its marketing efforts.
Any investor can get involved, regardless of their income or net worth.
The minimum investment is just $100.
Should you invest?
Let’s take a look at a few pros and cons.
Kicking the Tires
On the “pro” side, GeoOrbital has a strong team and has made quick progress — from patenting its product, to bringing in millions of dollars in sales.
But there are some big “cons” here, too:
For example, GeoOrbital’s valuation for this round is a relatively high $13.5 million, up from $10 million in last year’s funding round.
To make 10x your money on this investment (which is what we aim for on early-stage investments), this start-up would need to get acquired or go public for at least $135 million.
Since the majority of start-ups that get acquired do so at levels closer to $30 million to $50 million, we prefer investing at valuations of $5 million or less, so we can hit that 10x number.
So, how can we decide whether or not to invest?
How To Make Investment Decisions
Today you heard about a start-up aiming to carve out a leadership position in the fast-emerging market for electric bikes.
As you learned, this start-up has significant pros and cons — and that can lead to confusion about whether or not to make an investment.
Subscribers to our premium services like The Early-Stage Playbook and CrowdabilityIQ are already learning how to make these decisions.
But if you’re not ready to subscribe, keep reading our free articles, and be sure to take advantage of our free resources, like our White Paper on the 10 Commandments of Crowdfund Investing »
And in the meantime, you can learn about GeoOrbital’s investment round here »
Happy Investing
Please note: Crowdability has no relationship with Net Capital, or with any of the companies or platforms we write about. Crowdability is an independent provider of education, information and research on start-ups and alternative investments.
Best Regards,
Founder
Crowdability.com
