Hopefully a small business considering this kind of loan can get some free advice from somebody like https://score.org/ before they get in too deep. I know I'd recommend that before I made that kind of investment.
Many sole proprietor businesses get in trouble with sales tax collections when they try to juggle accounts with cash flow problems. Adding a loan product like this... ouch.
So are there any differences in your product and SS? I assume the tech stack is much better. SS made me want to vomit. I guess this is an SS clone without the military focus? SS wasn't an original idea either, but at least they tried to put a spin on it. This just feels like blatant rip off
Uber and Lyft are very similar, but at least they could be differentiated. Lyft had tips at the start. The apps, sites, UX, colour scheme, etc... were still noticeably different despite offering the same product.
Also it's a little different when you work at one company, leave, and then a year later you copy their same product with little change and 0 attempt to establish your own brand.
In some ways it is similar to SlideBelt and how MissionBelt essentially stole their product. Except in that case I believe it was a family relation and not a professional relation.
In this case, we have businesses asking for money. What if the founders decide they like one of the bids? They could hide/remove the bid and then steal the business idea and use their connections, which the struggling business likely doesn't have, to steal the idea.
Would you really trust these people?
You may be right there. I was pretty miserable when I worked for SS and see most things from that period in a negative light. I don't mean to sound adversarial, but what would it be saying about me?
I think my issue here is that is feels more like a direct steal of a business idea and less like competition. I don't see any changes, differences, innovation, or rebranding.
It's a fine line, and everyone sees the line differently. For example, an outsider stealing a business idea is better in my mind. They could have very well been working on the same idea concurrently like Leibniz and Newton. They will also have a different perspective and take on the situation. When a previous employee steals an idea without improvement, it doesn't sit well with me.
I think I'd be fine with it even if they just shifted focus. As a direct improvement on SS they could say they are focusing on transparency and security, pushing users towards 2FA and secure practices while being open with some of the risks involved. They could focus on local small businesses within X km or maybe some new attempt to quantify risk and match investors to businesses based on risk profiles. They did none of that. They took the exact same "Main Street" motif and just changed the color. Competition is good, but cookie cutter companies like this with no innovation only hurt each other. And then when these companies fail, everyone that that pulled in to invest and the small businesses involved suffer.
And there isn’t any such thing as cookie cutter companies, at least not successful ones. When you start second you need to do something important better, or you can never catch up.
Apple is famous for being second to market with the same idea, but with a lot more thought and polish put into how it works.
Not really sure what you propose they do about it?
Just because something is define in law does not make it right or wrong. All we can really do is inform people and let them decide for themselves.
Your personal bias may be clouding your judgement.
I think it's a worthwhile data point that the creators of Mainvest couldn't be bothered to come up with a different layout for their landing page and took it verbatim from their former employer.
It helps me make the decision of using their investment platform or not. Where else did they take shortcuts?
If StreetShares used to look like Mainvest but changed their model, and Felix believed in the original idea and decided to quit and try it again, what's wrong with that? It's like the Vine founders starting Byte, or the Screenhero founders starting Screen. Not only is copying ideas a core part of capitalism, but it barely even counts as copying when it's an idea you yourself worked on.
I assumed a founder or one of the employees was the one to post the link. I was genuinely curious to see how they are different. SS did a lot of things wrong, and there was a lot of room for improvement, but at a glance this place looks the same.
edit: After re-reading the original comment, I guess the "blatant ripoff" line was a bit rough. I probably should have used some softer language
I don't know enough about the investment model they support, but any company that is trying to help grow important community businesses like Great Scott in Allston deserves attention.
I also thought Nick's message on internal diversity was one of the better takes (blunt & honest) I'd seen from a CEO: https://medium.com/@nick_97468/our-team-is-all-white-and-its...
Wish them the best of luck!
You have to pick a business based on a short description and some social media profiles. Some of the listings have a business plan or a slide deck, but none present an audited financial statement.
Then there is a mysterious metric called "investment multiple". It seems to be a 6.5-year ROI. When you break it down, it boils down to 3.5-8.5% return per year on the money you lend them. However, the payment schedule is unspecified, and it is not exactly clear what recourse do you have if things go under. A bank would never provide a business loan on such terms.
and that's why this is trying to find retail investors to invest. Good investment deals are almost never public, and will always be taken by those close to the deal.
This obsessive narrow focus on strict financial gains is part of the problem.
For businesses who set themselves up as for-profit, or those who wish to invest in for-profit businesses, a return on capital is required for those systems to work. Investors may accept a lower return on their money in a local business compared to one they will never see, but there is absolutely nothing wrong with making sure there is a investment return. Otherwise, how do you suppose the next business gets funded?
We're happy to answer any questions people may have about the small business landscape and how these investments are structured and can perform. Reach out! Nick@MainVest.com
Also, considering the uptick in cases over the past week, the timing of investing in small businesses seems suspect.
- It was founded in September 2019, but has not even acquired a lease on a suitable location yet.
- The presentation states they will use the money raised to take over an existing funeral home, but the "risks" section in the data room says it "is a newly established entity and has no history for prospective investors to consider." If they are taking over an existing funeral home, surely the numbers from that funeral home would be available.
- Later on in the presentation slides on the first place, they state that the funeral home they are looking to take over has about 200k revenue forecasted for FY2020. On the data room "financial forecasts" section projected revenue for year 1 is almost double that at 380-390k. Also despite the funeral home presumably existing for some time already, they think they'll be able to grow revenues almost 50% in 2-3 years.
- The president has over 20 years experience in death care which is nice. The vice president seems to be his wife and is currently working as a dental assistant.
- The risks include that they might not have sufficient accounting controls in place (!). You won't even know if they are doing well or not.
- They offer "guaranteed" (provided they still exist in 2026) return of $1800 on 1/1/2026 on $1000 invested. That is an annualized ROI of more than 11%. That they are offering interest rates this high means that all the providers of lower interest rates have rejected them. A highly speculative startup in electric scooters here in Amsterdam recently offered 8% and that was more than enough to get enough interested investors. You should ask yourself why they are offering such high interest rates and what it means for the (perceived by the market) chances of them not existing in 2026 to pay back your money.
To summarize: there are a number of "red flags" that warrant extreme caution.
I also thought this was weird, "Mizen will also showcase local art, host a weekly support group for veterans, and offer conference rooms to be used by local nonprofits."
I wasn't aware of conferences in funeral homes.
Getting some equity in the business always made more sense to me. Sure, I want the thing, but for the amount of risk I'm taking on, I want a percentage of your company and future profits!
Investing in a portfolio and watching a candles comes with one very singular yet very clear expectation. Those candles moving in ways that's favourable to you and yielding an unrefined monetary return.
Investing in Main Street? You would do that for a multitude of very different reasons or personal reasons. For instance, that coffee place down town is where you meet up with your friends, or you have fond memories of that place because you met your spouse there a decade ago. The value of a funeral parlour would be that the entire local community, at one point or another, will get into touch with them. Hairdresser? Corona forces me to do my hair at home, but as soon as I can, I'll go back to my hairdresser where you'd have the banter and the relaxing atmosphere while you get treated.
So, the idea of investing in new main street businesses isn't because they fulfil a simple, crude financial return. It would be because you expect them to flourish and add a wide range of intangible values and a unique identity to a local community, which you'd be hard pressed to find in one-size-fit-all chains of stores and services.
Put more succinctly, sure, you could invest in Starbucks on the stock market. But if you've been to one of their venues, you've pretty much seen them all. Which is the opposite for an independent coffee place where the owner went out on a limb to add their own unique touches and has build up their own specific clientele.
I invested in an associates coffee shop. A pool of people invested for 60% of the business, with the founder earning additional share for hitting milestones and getting the opportunity to buyout.
Charity would be giving money to a worthwhile cause without expecting any direct return. You don't buy a service or a good. You just give away money to a cause without expecting anything in return. Charity is an act of altruism.
As far as main street businesses are concerned, customers very much expect a concrete return: a decent cup of coffee, a proper haircut, a well sewn suit, leather shoes that don't wear out and so on. The difference between a large franchise and a small business is the added value of being treated like the individual, and part of the community, that you are. The altruistic part may then be that you understand that you're supporting others in your local community to make a living, even though you still expect a good or service in return.
The stock market is about investing in a venture with a clear singular goal: monetary return through speculation. It's basically a form of lending money in hopes of gaining even more money.
That doesn't necessarily mean that speculation in itself is bad. Your intentions are what makes all the difference. For instance, you could attach a clear intention to your investment: because you feel that the businesses you invest in are worthwhile i.e. your values align with the values of that venture. This is where the whole notion of "ethical investing" comes in: you choose to invest in ventures that "do no harm" to society and/or the ecosystem.
Whereas, if you simply invest money in the stock market, without caring in what types of ventures exactly, just so you can extract wealth for yourself, well, that's where all kinds of moral questions start to pop up.
The latter is nothing new. Throughout history, immoral money lending has been condemned an uncountable amount of times. This is what Cicero wrote about it:
> ...of whom, when inquiry was made, what was the best policy in the management of one's property, he answered "Good grazing." "What was next?" "Tolerable grazing." "What third?" "Bad grazing." "What fourth?" "Tilling." And when he who had interrogated him inquired, "What do you think of lending at usury?" Then Cato answered, "What do you think of murder?"
I said - did you buy these because it was a friend of yours, or do you expect them to increase in value over time? Or some other reason?
She said “I don’t know why I purchased these, I purchased them without understanding it”
Sooooooo there’s your answer. The level of analysis that average people do on investments is near zero or zero
Looking at the actual figures, a typical opportunity offers a capped 30-50% ROI owed within seven years, which is in the ballpark of average stock returns before you start to consider the businesses which can't repay. You can do better if a business exceeds revenue targets and repays early, but you're not exactly at the front of the creditor queue when they're underperforming...
Seems like a weird tagline, but could also be that I'm missing something as I don't live in the US.
Small business lending is an interesting space. Small business often fail and thus small business loans tend to have garbage rates. I'm assuming the idea is to hit people on an emotional level, allowing 'investment' into someone that you can relate with as opposed to some large corporation.
So the article wants people to make a worse investment (lower ROI and/or higher risk), and hopes that they will be okay with it because small businesses are more relatable? Am I understanding this right?