Category: Newsletter
IC 2023 Mid-Year Review
Throughout 2023, the IC remains active and vibrant, monitoring our portfolio, evaluating literally dozens of opportunities, and choosing when to invest. Our efforts to attract new members were successful resulting in three new members. Of course, we want all 48 members to continue to participate as they have in the past.
The nine-member Steering Committee is comprised of me, Greg Fell and seven active members. This group has done an incredible job of continuously identifying new ventures and collectively screening them. We meet every other Wednesday, and all members are welcome to attend.
In the first six months of this year, the IC completed investments in Ottometric and, most recently, in Versus Games. We have several more attractive opportunities including Life Guides which are being considered so there is still time to get in on the action.
The details on all companies, presentations, current valuations and the performance of your individual portfolio can be found at Seraf-Investor.com. Contact me if you need help gaining access.
We continue to encourage all members (past and present) to top off their account with $15,000 and to stay in the game. We want more of your expertise and insights during selection, as well as input and guidance for the startups in which we invest. Bring us new opportunities, add capital, or simply join in the conversation.
To withdraw and receive a distribution of your remaining capital, send me a written request confirming your current address and I will issue a check. Please note you cannot withdraw invested capital.
We hope you will be inspired to participate or perhaps refer others you know who may also want to join us.
Joseph A. Puglisi
Chairman & Co-Manager
NAIC 2
(914) 623-8508
Member Update 2022
Throughout 2022, the IC has remained active and vibrant, monitoring our portfolio, evaluating literally dozens of opportunities, and continuing to invest.
Our partnership has become all that Len Hafetz, our founder, envisioned. We continue our efforts to attract new members and invite former and existing members to continue to participate as you have in the past.
As you know, we have a Steering Committee comprised of the co-managers, Greg Fell and me and seven active members. This group has done an incredible job of continuously identifying new ventures and collectively screening them.
In 2022, we scheduled many presentations and conducted evaluations of products or services, as well as the management team, founder, market strategy, spending plans, competition and other factors that can mitigate risk and contribute to success of a startup.
This year we had several exit events returning capital to our members. New investors in Allwork offered to purchase all outstanding notes and we benefited with a 1.5x return. We also invested in one new company; Legends of Learning and provided additional financial support to Puraclenz. The details of these companies, their performance and the performance of your portfolio can be found at the Dashboard – Investors Collaborative | Seraf-Investor.com. Contact me if you need help gaining access.
We invite all members (past and present) to add $15,000 before the end of the year to stay in the game. We continue to develop a pipeline of interesting new ventures and want more of your expertise and insights during selection, as well as input and guidance to the startups in which we invest. To do this, we need you and added capital. To withdraw and receive a distribution of your remaining capital, send me a written request with your current address.
We hope you will be inspired to participate or to refer others you know who may also want to join us.
Joseph A. Puglisi
Chairman & Co-Manager
NAIC 2
(914) 623-8508
2021 Year End Update
The Investor Collaborative concluded 2021 having made four new investments, in receipt of several note payments and with three exits.
- 2021 IC investments included Puraclenz, QSM, Ottometric and Irrigreen
- We collected $10,000 of interest [over]due on our Labcloud note
- 7AC was acquired and payment received with a small portion held in escrow until May 2022
- AVG had two successful exits (Lessonly and Luma) so we received payment on our portion
All payments were distributed to individual members based on their portfolio positions. Activity is posted in our management platform, Seraf, which all members can access. We also use our LinkedIn page for events and articles of interest. We suggest you follow this page to keep abreast of all developments.
Each new investment is made pro rata, dividing the amount invested by the number of active members with sufficient capital to cover their portion of the amount. There are two exceptions:
- You may opt out by indicating you do NOT want to participate in the IC any more or
- You can contribute additional capital at any time to cover your portion and continue to be active
Using Seraf we are capable of managing “side car” investments by members who want to individually contribute a larger sum of capital to a specific deal.
The Steering Committee meets every other week on Wednesday at 4:30PM Eastern. All members are welcome to participate in the call.
Please contact me if you have any questions.
Joseph A. Puglisi
Chairman & Co-Manager
NAIC 2
(914) 623-8508
WWW.NAIC2.com
*** If you are aware of members who did not receive this update, please pass it along.
2021 First Half — Update
During the first half of 2021 COVID has been a major distraction and very disruptive to most businesses. But it has not prevented the IC from making significant strides forward.
We have completely revised the web site WWW.NAIC2.COM and we encourage you to visit and provide us with some feedback.
All of the transactions for each member have been entered to our new management platform Seraf. This system delivers complete transparency to your holdings and current value of your portfolio, as well as, insights and updates to the performance of the group as a whole.
We made an investment in Puraclenz, an appliance designed to disinfect both air and surface by emitting ions. We made additional investments in a social media platform called Display and a pet diagnostic service QSM. 7AC, an older investment from IC 1, finally cashed out. Funds have been collected and payments will be made to the nine members in that property. We are also tracking the value of NetCapital as it is trading. Once we receive the stock certificate we can realize the gain and distribute the cash.
Though a number of members withdrew last year becoming inactive participants, we added one new member early this year. With 20 active members and limited remaining available capital we are somewhat limited in our ability to invest.
The second amendment to our operating charter makes it possible for new or existing members to contribute any amount we choose. This combined with the new Seraf platform makes it possible for us to continue investing without some of the previous constraints or limitations. We no longer have to act in lock step.
Our attention will now turn towards a marketing campaign to create more awareness of the IC and to attract new members. We hope to build up our capital base and find new and exciting startups to fund.
Of course, we also hope some of our former members will take a renewed interest and perhaps add some capital to their accounts. The Steering Committee meets every other Wednesday at 4:30 for 30 to 60 minutes and we invite any interested parties to join.
Joseph A. Puglisi
Chairman & Co-Manager
Q4 2020 Update
On behalf of the entire Steering Committee, Greg and I hop[e you had an enjoyable holiday season and wish you the very best for the coming year. This will be our final activity report for 2020. We trust it finds you all healthy and doing well.
The IC has enjoyed the opportunity to evaluate many new investments and continues to identify and fund the ones we believe hold the most promise. In fact, we have invested more in the last 6 months than we did in the prior three years, and we intend to continue.
Here are some updates and highlights of our recent activity:
- DAVI was our final investment in 2020. This company will market very high end audio headphone equipment. IC invested $25,000 for the group while three members added additional funds to bring the total investment in the company to $50,000.
- TSU looks very promising with a recently announced valuation of $100 million. This new social media platform with a unique revenue sharing model is showing signs of phenomenal growth reaching extraordinary subscription levels in record time.
- We committed $50,000 to the initial round of QSM. This innovative group has invented an instrument which can detect a very specific and common ear infection in dogs. With a vast market, manufacturing and distribution in place, and the longer term potential to take this technology to the human market, we expect a very good return from this investment.
- Netcapital was acquired last fall by a microcap public company named ValueSetters, Inc., which subsequently changed its name to Netcapital, Inc. As a result, IC has its first publicly traded company (trading symbol NCPL)! Our investment is still held as a convertible note which , under the terms of its merger with ValueSetters, will convert once their market cap exceeds $11.5 million for 15 straight days. We are not there yet, as the market cap is approximately $5 million.
- Early this month David Safaii provided a rather upbeat report on Trillio. They are building staff and revenue, while expanding into new markets. They are moving to new quarters, and closed on a $12M Series B as well as $3.5M in debt financing. Though facing COVID headwinds, their prospects are good for growth in 2021.
- GreenSight recovered well in 2020 after overcoming a cash crunch early in the year. Revenues were approx. $4M, and the company generated a slight profit for the year. Government contracts represent roughly 50% of the business, and the company’s existing contracts support growth to $6M+ in 2021. The golf business is growing but does not appear to be a big enough opportunity to build a major business. GreenSight’s key issue is to figure out how to leverage the government contracts into a major commercial business.
- In case you are trying to track these, a few of our holdings now go by other names:
- Skulpt became Myolex
- Courtagen became Medicinal Genomics
- Antera became Adeo (but dissolved in 2019)
- eCurve became Demand Q
- As reported last time, holdings such as Allwork, Drink More Good and Labcloud continue to suffer under the current economic conditions. Not much further to report.
- Finally, 7AC, an NAIC 1 investment reported they are entering into a merger resulting in a buyout. Proceeds, if any, will be distributed to the participating members as soon as it is received.
We always welcome thoughts and input from our members, both past and present. Of course, we are also interested in attracting new members who can contribute to our intellectual and financial asset base. If you know anyone who may be of interest send them our way. Moreover, we are offering former members who withdrew or have run out of available capital an option to buy back in and regain your standing for $15,000. This “topping off” will be the way forward for us as a group to continue and to grow in 2021 and beyond. It is an approach to allow new, exiting and former members to have sufficient funds to continue participation in the new year.
Recently, we identified a new, very high potential company in the health care space which is looking for capital to fuel marketing efforts. They have a finished product, patents to protect it, manufacturing capacity and distribution channels already lined up. Their product is highly likely to be successful on its own, but we anticipate the company will be acquired quickly resulting in an even greater return. Their product is an appliance that continuously disinfects large, open spaces using charged ion particles making it very attractive to certain markets such as restaurants. Demand will be high particularly during these COVID times but even beyond. It is attractive enough that at least two members are putting extra capital into the deal. None of our current or former members should miss out so if your capital is insufficient or you withdrew, we strongly urge you consider the option to get back in the game.
As an investment group our three key goals remain:
- Manage the current portfolio to maximize return to our members who are invested with us,
- Identify new investment opportunities to increase the portfolio value and add more potential return,
- Grow the membership to broaden participation and increase our investment power.
If you have any questions please feel free to reach out to me or Greg, or any member of the Steering Committee on copy here.
Sincerely,
Joseph A. Puglisi
Chairman & Co-Manager
NAIC 2
(914) 623-8508
2020 August Update
We are keeping a close eye on global economic conditions and we have adjusted to the new normal way of conducting virtual meetings. While the pandemic has certainly created challenges and changes in the investment community, we see new ventures starting every week and there are still plenty of good opportunities. I am happy to report the NAIC Steering Committee has been both active and productive since our last update.
- As I reported back in June, we invested in TSU, a new social media platform. Over the past few months, TSU continued to add subscribers and gain traction in the marketplace. While the product is not complete, they are on plan and have an optimistic outlook for the future.
- Net Capital entered into a agreement to be acquired and upon reaching a trigger point in volume, it will become part of a publicly traded entity. This could take a long time or potentially fail. However, our best option was to participate in the transaction and hope for the best.
- As expected on the heels of their growing success in the marketplace Cyware is advancing to a Series A round. Based on an analysis of the risk and potential return, the Steering Committee decided to take advantage of our option to participate in the next round. Though additional participation was offered, we remained conservative taking only our allotment and no more.
- Following an impressive presentation by the founder of QSM, and based on our due diligence as well as research and opinions from other groups, we have committed $50,000 to the initial round. This innovative group has invented an instrument which can detect a very specific and common ear infection in dogs. With a vast market, manufacturing and distribution in place, and the longer term potential to take this technology to the human market, we expect a very good return from this investment.
- Trilio is doing very well despite the current economic climate. Revenue is up, they are gaining new customers and they are moving into new technology markets. Management are advancing towards the second round of a Series B to raise $15 million. We have not discussed our participation in this round.
- AllWork has suffered from the severe drop off in retail activity. They tightened their belt and have sufficient funding to survive through the end of the year. Assuming retail activity comes back, they will resume their growth albeit 8 to 12 months behind the original plan. Their resilience and relationships with key partners are likely to preserve the value of this investment and will likely result in a positive long term outcome for us.
- DrinkMoreGood has also retrenched, giving up the retail store and selling it’s production facility to Recess, itself a beverage startup and DMG’s largest customer. While DMG may remain a small, locally produced niche syrup company, DMG (and therefore we) are now shareholders in Recess which hold great promise of a huge ROI.
We evaluated but passed on several other opportunities to support a startup with a new product or service, and we will continue to look for deal flow. We welcome thoughts and input from our members, both present and past. Of course, we are also interested in attracting new members who can contribute to our intellectual and financial asset base. If you know anyone who may be of interest send them our way.
Our three key goals remain:
- Manage the current portfolio to maximize return to our members who are invested with us,
- Identify new investment opportunities to increase the portfolio value and add more potential return,
- Grow the membership to broaden participation and increase our investment power.
If you have any questions please feel free to reach out to me or Greg, or any member of the Steering Committee on copy here.
Joe Puglisi
Co-Chair
NAIC 2
2020 February Update
Over the last few weeks there has a been a lot of activity and Greg and I wanted to share all the news and updates with our members.
With the assistance of Bill Asher, our organization has been brought current by filing annual reports and other documents as required by the State of Massachusetts. This cleared the way for Greg Fell and I to be formally recognized as co-managers of the IC. This enabled Greg to open a new business account with Chase bank. Jere O’Sullivan will arrange the balance of our treasury to be transferred to this account enabling Greg and I to gain control over the funds.
In February we conducted a few meetings with the newly formed permanent steering committee (PSC) as provided by the Amendment. In addition to Greg and myself, the members of this committee are:
- Bill Asher
- Staffan Ericsson
- Norm Jacknis
- Eric Kagan
- Mark Modzelewski
- Steve Young
This team has already accomplished a great deal. We have arranged for our tax return and K1s to be prepared by our accounting firm. Norm is migrating all the active documents from Drop Box to a new file store and we will make it available to all members as soon as it is complete. We discussed the current portfolio and have assigned one of the PSC members to monitor and report on each existing investment going forward. This information will be posted to the new file store as well.
Bill drafted the attached agreement for those members who expressed a desire to withdraw. We are sorry it took this long and we hope you will consider staying with the group. Review and sign it if you still want to withdraw. The terms are clear and upon receipt you will be excluded from future investments. You will receive a check and a statement of your current holdings.
Finally, we have jumped back on the horse and conducted due diligence on a new, potential investment. TSU is a new social network with a unique value proposition and business model with the promise of a very good return. We are finalizing documents and have a placeholder for a modest investment in the company. You will not be included in this investment if you withdraw from the group.
Greg and I continue to be excited about the IC and look forward to continuing our work with the PSC, and our existing members as well as new members.
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