NASA vs. The SEC
By Wayne Mulligan, on Thursday, November 5, 2015
Is there a certain subject where you're an expert?
For example, do friends and family come to you for advice about the stock market, or buying a car, or stereo equipment?
Now imagine that you had an opportunity to make a great deal of money from your expertise—imagine you could make millions of dollars from it.
Sounds exciting, right?
But then imagine this:
The U.S. Government shows up and tells you to stop right there. It literally bans you from using your expertise to provide for yourself and your family.
How would you feel?
Irritated? Angry? OUTRAGED?
So when a group of NASA scientists were banned by Uncle Sam from capitalizing on their knowledge, you can probably imagine their indignation.
But now these rocket scientists are about to get even—
And it could mean big gains for them... and big gains for you.
Please, Not Another Mobile App
In a minute, I'll explain exactly how the government prevented these scientists from using their wits to make a fortune.
But before I do, I'd like to point out a big problem we're seeing today in the world of technology, and the world of technology investing.
My thoughts on this topic started taking shape two weeks ago, when I realized that it was October 21, 2015. In the classic movie, Back to the Future, Part II, that's the date Doc Brown and Marty McFly travel to in the future.
In their exciting glimpse of the future, they're exposed to self-tying shoes, and cars that float through the air without wings.
But back in the real world, it occurred to me that we hadn't made much progress on these futuristic ideas...
And we hadn't made much progress on more meaningful visions, either—for example, discovering ways to prolong life, or creating alternative fuel sources.
And there's a good reason for this:
For investors, backing visionary companies that are working with hardcore science, or with complex chemicals and materials—that takes real smarts and knowledge.
It's easier, perhaps, to back things that are more readily understandable...
A video site like YouTube, for example, or a mobile app like Instagram.
How can we foster hardcore technological innovation—and how can we benefit from it financially?
Enter Propel(X).
A Platform for "Deep Technology" Companies
Propel(X) is a new funding platform that connects investors like you with "deep technology" companies that are raising capital online.
These companies are working on truly disruptive and meaningful technologies.
To help vet and evaluate these opportunities, the company has recruited a community of industry experts—from mechanical engineers and physicians, to NASA rocket scientists.
According to one of the founders, Swati Chaturvedi, "We are building a community of investors who are truly passionate about deep technology startups and the positive impact they have on humanity."
Deep Technology Returns
In addition to having a positive impact on humanity, these investments could also have a positive impact on investors' portfolios...
"Deep technology" is a term that includes companies not just in tech, but in Aerospace & Defense, Healthcare, and Biotech—and if you look at the industries from the last 10 years with the best financial performance, these sectors top the list.
Currently, Propel(X) features about a dozen investment opportunities, all of which have been vetted by industry experts.
As just one example, when Propel(X) looked at a company developing a new space propulsion device, it brought in NASA scientists to evaluate it.
Getting access to that type of specialized insight could end up being worth millions of dollars to investors on its platform.
But shockingly—and now we'll get back to the thread I mentioned earlier—the U.S. Government banned these scientists from capitalizing on their own expertise.
Here's why...
More Money Than Sense
Even though these scientists were experts in their field, they weren't "accredited" investors.
Meaning, they weren't worth at least $1 million, or they didn't earn at least $200,000 a year. And according to the SEC, if they didn't meet those criteria, they were banned from investing in private companies (like the space propulsion device they were evaluating).
That's outrageous. I mean, who's more likely to make an informed investment decision about a space propulsion company:
A millionaire investor with zero industry experience?
Or a brilliant NASA scientist who earns $120,000 a year?
Thankfully, the SEC finally decided to do something about this issue.
Last Friday, October 30th, in a vote of 3-1, the SEC passed Title III of The JOBS Act.
What this means is, in 6 months, all investors—regardless of their income or net worth—will be able to invest in private deals like the ones you'll find on Propel(X).
Those NASA scientists will be able to use their knowledge to back companies they're confident in—and you'll be able to leverage their experience to invest yourself.
You can read more about our perspective on this new law here »
Happy investing.
Please note: Crowdability has no relationship with Propel(x), or with any of the companies we write about. Crowdability is an independent provider of education, information and research on start-ups and alternative investments.
Wayne Mulligan
Crowdability.com
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Tags: Equity Crowdfunding Title III The Jobs Act