Elio Motors recently released a prototype version of Elio which is a three wheel, two-seater vehicle. Its size is about half the width of a regular car, and due to its three wheel feature, it is technically being classified as motorcycle. Eventually it is retailing at about $6,800.
Paul Elio, founder of Elio Motors, said that the company needed about $300 million before they could start manufacturing cars. It is currently has received about 45,000 preorders of the vehicle. The company does not follow the conventional process of raising venture capital as private equity would not do pre-revenue investments and venture capitals thought that the project was too big for an eventual follow up check and therefore, Elio Motors is considering a few non-conventional funding options which making use of Regulation A+, a new regulation which allows non-accredited investors to invest in private startups.
Regulation A+ is considered a new program as it is just launched on June 19th. The process of the regulation is that the company who applied for it need to enter the “Test the Waters” period where they can advertise that they are accepting investment and investor is able to pledge a non binding amount. In this case, Elio contracted StartEngine to do the job for them. StartEngine is a new platform built to guide the companies through Regulation A+ fundraising process. It is different from the Kickstarter fundraising program.
After the investment amount has been met, the company will then need to submit a Form 1-A offering statement to SEC with a complete full financial audit. As of now, there are about 100,000 investors have pledged for Elio Motors, bringing a total investment of $37M.