The SEC Asks Court Why Elon Musk Should Not be Held in Contempt for Tweets

The Securities and Exchange Commission (SEC) has filed a motion for an order to show cause, on February 25, why Elon Musk, CEO of Tesla, should not be held in contempt for violating the terms of the Court’s October 16, 2018, Final Judgment. The agreed upon terms required Musk to obtain pre-approval of any written communications that contain, or reasonably could contain, information material to Tesla or its shareholders.

This pertains to Musk’s tweets regarding Tesla’s operations. At 7:15 PM ET on February 19, 2019, Musk posted via Twitter:

“Tesla made 0 cars in 2011, but will make around 500k in 2019.”

The SEC says this statement was disseminated to Musk’s now over 24 million Twitter followers, including members of the press, and was publicly available to anyone with Internet access.

At 11:41 PM ET that same day, Musk published another tweet correcting his 7:15 tweet:

“Meant to say annualized production rate at end of 2019 probably around 500k, ie 10k cars/week. Deliveries for year still estimated to be about 400k”.

According to the SEC, Musk has admitted that he did not seek pre-approval of his 7:15 tweet, as required by the Court’s Final Judgment and Tesla’s Policy.

Musk claims that he did not believe that he needed to seek and obtain pre-approval for his 7:15 tweet because he thought he was simply recapitulating information that had already been pre-approved in connection with two Tesla communications that took place 20 days earlier on January 30.

The SEC disagrees with this statement.

What We Can Learn From the SEC’s Lawsuit Against Elon Musk

On September 27, 2018, the SEC filed a lawsuit against Elon Musk for committing securities fraud because of some tweets he published on August 7, 2018. A mere two days later, September 29, 2018, Musk settled with the SEC.

As part of their settlement agreement, Musk agreed to step down as Tesla’s chairman. An independent chairman will replace him and he will be ineligible to be re-elected as chairman for three years. Musk will also pay a $20 million penalty.

On the same day as Musk’s settlement, the SEC also charged Tesla (NASDAQ:TSLA) for failing to have “required disclosure controls and procedures relating to Musk’s tweets.” Tesla settled such charges by agreeing to pay a separate $20 million dollar penalty. A court will oversee the distribution of the $40 million in penalties to harmed investors. The funds from Tesla and Musk will be distributed to investors harmed “will be distributed to harmed investors under a court-approved process.”

Although $40 million for a few tweets may seem like a harsh penalty, Musk could have faced a far worse fate if the case had gone to trial. The SEC’s charges against Musk illustrates how easy it is to violate federal securities laws and the severe penalties that can result from such violations.

The Tweets that Lead to the SEC’s Complaints

On August 7, 2018, Musk tweeted the following: “Am considering taking Tesla private at $420. Funding secured.”

As a follow-up to his initial tweet, Musk also tweeted:

  • “Shareholders could [sic] either to sell at 420 or hold shares & go private.”
  • “My hope is *all* current investors remain with Tesla even if we’re private. Would create special purpose fund enabling anyone to stay with Tesla. Already do this with Fidelity’s SpaceX investment.”
  • “Investor support is confirmed. Only reason why this is not certain is that it’s contingent on a shareholder vote.”

The Aftermath of the Tweets

Following the tweets, Tesla stock jumped 7%. The SEC alleged that the tweets caused market chaos and harmed investors, that “Musk knew or was reckless in not knowing that each of these statements was false and/or misleading because he did not have an adequate basis in fact for his assertions,” and that he “directly or indirectly made untrue statements of material fact and omitted to state material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading.”

The Allegations of the SEC Against Musk

As support for the SEC’s case, it alleged the following:

  • Musk never discussed a going-private transaction with any potential funding source for $420/share
  • He had not “investigated whether it was possible for all current investors to remain with Tesla as a private company via a “special purpose fund,” and had not confirmed support of
  • Tesla’s investors for a potential going- private transaction.
  • He also knew that he had not satisfied numerous additional contingencies, the resolution of which was highly uncertain, when he unequivocally declared, “Only reason why this is not certain is that it’s contingent on a shareholder vote.”
  • Musk’s public statements and omissions created the misleading impression that taking Tesla private was subject only to Musk choosing to do so and a shareholder vote.”

The Timeline of Events that Lead Up to Elon Musk’s August 7 Tweets

On the days leading up to Musk’s tweets, he had in fact talked to potential investors about going private.

On July 31, 2018, he spoke to a lead representative of a fund (the “Fund”) that recently acquired five percent of Tesla’s common stock. The representative was an authorized decision-maker for the Fund and represented that the Fund was interested in taking Tesla private.

On August 2, 2018, he wrote to his board, CFO and general counsel, “Offer to go private at $420.” The $420 price was based on a 20% premium over the price which Tesla was trading on August 1. On July 31, the stock had closed at $298, but spiked 17% following Tesla’s August 1 earnings report.

According to the SEC, “Musk realized that a spike in Tesla’s share price might make a going-private transaction not feasible  because it would require an investor in the transaction to pay a “premium on a spike.””

On August 3, 2018, as a follow-up to Musk’s email, he and Tesla’s board had a conference call. Musk informed the board that the Fund was interested in taking Tesla private and that he wished for Tesla’s current shareholders to remain investors.

At least one board member informed him that it would be very difficult for small shareholders to remain invested if Tesla goes private.

Musk told the board that he wanted to contact shareholders about their interest in Tesla going private. The board approved and asked Musk to report back his findings.

On August 6, 2018, Musk talked to a private equity fund partner about going private. He was informed that to go private, Tesla could have no more than 300 shareholders. Currently, Tesla has over 800 institutional shareholders and many more individual shareholders. Given this, the fund partner informed Musk that his proposed transaction was “unprecedented.”

The August 7, 2018 Tweets and the Aftermath

Despite the uncertainty about whether going private was a possibility, he tweeted to his followers that Tesla was going private at $420 per share and it was only contingent on a shareholder vote. In addition, public companies are required to notify NASDAQ at least 10 minutes before announcing certain corporate events, such as going private, but Musk made no announcement before tweeting to his followers.

On August 13, 2018, possibly after realizing the egregious mistake he had made, Musk posted a blog on Tesla’s website explaining why he published the offending tweets.

The SEC Seeks the Ultimate Punishment for Musk

Given the August 7 Tweets, the SEC sought to stop Musk from further violating certain anti-fraud provisions of the Exchange Act and asked for a court order to disgorge Musk of profits plus interest, penalties, and to bar Musk from ever serving as an officer or director of any public company again.

The potential penalties were so severe that Musk settled with the SEC a mere two days after the SEC filed its complaint.

Key Takeaways in the SEC Lawsuit Against Elon Musk

For some corporate executives, monetary penalties may be par for the course of doing business, but a bar from serving as an officer or director of a public company is devastating to blow to any corporate executive’s career.

The SEC’s complaint against Elon Musk is a good case study in how easy it is to violate securities laws and how severe the consequences can be.

1- Anti-Fraud Provisions Are Easy to Trigger

The SEC charged Elon Musk under Section 10(b) of the Exchange Act of 1934 (“Exchange Act”) and Rule 10b-5 thereunder (the “Anti-Fraud Rules”).

What the Anti-Fraud Rules Say

The Anti-Fraud Rules prohibit any direct or indirect “use of any means or instrumentality of interstate commerce, or of the mails or of any facility of any national securities exchange,”

  • “To employ any device, scheme, or artifice to defraud,
  • To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or
  • To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person, in connection with the purchase or sale of any security.”

What the Anti-Fraud Rules Mean

You Can Violate the Anti-Fraud Rules with Indirect Statements of Fact or Even Omissions of Fact

The Anti-Fraud Rules do not prohibit only direct statements of untrue facts. You can violate the anti-fraud rules even if you make indirect statements of material facts that are untrue or omit material facts that would make a statement not misleading.

For example, if Elon Musk linked to someone else’s tweet about Tesla going private at $420 per share, that would be an “indirect statement of fact.” If he did not correct this statement with clarifying information such as the share price hasn’t been discussed and whether going private is even a possibility, it would be an omission of material facts, and thus, a violation of the anti-fraud rules.

Under Section 10(b) and Rule 10b-5 of the Exchange Act, you can violate the anti-fraud rules even if you make indirect statements of material facts that are untrue or omit material facts that would make a statement not misleading.

For example, if Elon Musk linked to someone else’s twitter post about Tesla going private at $420 per share, that would be an indirect statement of fact.” If he did not correct this statement with clarifying information such as the share price hasn’t been discussed and whether going private is even a possibility, it would be an omission of material of material facts, and thus, a violation of the anti-fraud rules.

You Don’t Have to Know That You Are Making a False or Misleading Statement

You don’t even have to know that you are making a false or misleading statement as long as you are reckless in not knowing.

Musk was in fact contemplating going private at $420/share and had been discussing this with potential investors and even his board. However, he didn’t do any additional investigation to determine whether this was in fact possible, which suggests that at best, he was reckless in not knowing, which violates the Anti-Fraud Rules.

2- Consequences for Securities Violations Are Severe

Possible Consequences for Securities Law Violations

The SEC can seek various penalties against those who violate the federal securities laws, such as disgorgement, civil penalties, and jail.

The SEC Seeks the Ultimate Civil Sanction Against Musk

In the case against Elon Musk, the SEC sought the ultimate sanction: an order ousting him from his current company and from ever serving in another on the board or as an executive of any public company.

If the SEC had prevailed in its lawsuit against Musk, it would not have only affected his role at Tesla, it would have prevented him from taking an executive or board position in any company and even owning over a certain percentage of voting stock in any company, public or private.

Under the Bad Actor Disqualification Rules, Companies That Are “Bad Actors” or Have Certain Affiliations with “Bad Actors” Will Face Bleak Obstacles Raising Money

The federal securities laws have “bad actor rules” that prevent companies that are lead by bad actors or where bad actors own 20% or more of a company’s voting shares from relying on certain securities exemptions from raising money, including Rule 506 of Regulation D (Reg D), one of the most relied-upon exemptions for private companies to raise substantial—and unlimited—amounts of capital.

The bad actor disqualification provisions also apply to Regulation A and Regulation Crowdfunding (Reg CF), which takes another two exemptions off the table for raising money, forcing an issuer that is a bad actor or has certain affiliations with one to rely on a different exemption for raising money.

In Musk’s case, if the SEC had prevailed in its lawsuit against him, Musk’s career at Space X could have been jeopardized. For example, if Space X ever had to raise funding, Musk’s role as CEO would have prevented Space X from raising funding under many exemptions unless SpaceX successfully applied for a waiver. Similarly, if Musk owns more than 20% of SpaceX’s voting shares, SpaceX will face similar obstacles raising money. In addition, if it decided to raise money by going public, Musk would have had to resign as CEO.

Given the severe consequences that Musk could have faced if the SEC had prevailed in the lawsuit against him, it is unsurprising that he decided to settle.

3 – You Must Be Careful About How You Communicate With the Public, Especially if the Subject of Your Communication Involves Your Securities

Finally, the SEC’s lawsuit against Elon Musk reminds us that it is important to be careful about how you communicate with the public, especially if you are raising money or or discussing your securities in any way.

Before making such communications, especially in a public forum, you should run your communications by a qualified securities lawyer to ensure that the communications are permissible.

In the SEC’s complaint against Musk, it alleged that he did not run his tweets by Tesla’s General Counsel before tweeting them. If he did, the GC very likely would have advised Musk against tweeting.

The time to review a communication is before it is made, not after.

Once a communication is made, it is too late. When Musk attempted to take back his August 7 tweets in a blog post on August 13, it was already too late. Similarly, when Tesla’s Chief Financial Officer asked Musk if he would like the assistance of the head of Tesla’s communications and General Counsel to draft a follow-up communication for him, Tesla’s fate had also befallen it as well.

Musk and Tesla were fined $20 million each, for a total of $40 million, a few tweets that Musk distributed on a single day, a steep price to pay for the party making the tweet as well as the one responsible for overseeing such communications.

 


Onki Kwan is a partner at Vanguardium Legal LLP, a San Francisco-based law firm that advises blockchain and technology startups. Her expertise includes entity formation, capital-raising, blockchain-related securities and regulation issues, commercial transactions, and employment, technology, product, marketing, consumer protection and privacy related matters. In her previous role as a senior attorney and director at a public interest law firm, she launched and managed a SEC and FINRA compliant JOBS Act funding portal. 


Disclaimer: The author’s views may not reflect the views of Vanguardium Legal LLP or any other person. This article is intended to provide general information only and should not be construed as legal advice or a legal opinion. If you have a legal problem, you should contact a lawyer for advice on your particular set of facts and circumstances. The information provided herein may not reflect the most current legal developments and is subject to change without notice. You should not take any action or refrain from taking any action in reliance on the information contained within this article. The author and Vanguardium Legal LLP disclaim all liability with respect to such actions to the fullest extent permitted by law.

SEC Chair Jay Clayton Comments on Elon Musk & Tesla Enforcement Action and Settlement

“…when companies and corporate insiders make statements, they must act responsibly, including endeavoring to ensure the statements are not false or misleading and do not omit information a reasonable investor would consider important in making an investment decision.”

– Jay Clayton, Chairman of the SEC

Securities and Exchange Commission Chair Jay Clayton has weighed in on the high profile enforcement action against Elon Musk and Tesla Motors (NASDAQ:TSLA).

This past week, it was publicly revealed that the SEC has leveled allegations of securities fraud for a series of false and misleading tweets about a potential transaction to take Tesla private.  Musk, a well known entrepreneur who is worth an estimated $20 billion, had tweeted that funding was secured for a deal that would take Tesla private at $420 per share. Shares in Tesla closed at $264.77 down a whopping 13.9% versus day prior.

On the day of the tweet, shares in Tesla closed at almost $380 a share – near its 52 week high of just over $387 share – clearly reacting to Musk’s very public statement.

Musk added that shareholders could cash in at $420 or hold on for the roller coaster ride of the electric car manufacturer – a company that has captured the attention of the world while struggling to become profitable.

The SEC allegation stated that Musk had “not discussed specific deal terms with any potential financing partners.” This is a huge breach of fiduciary responsibility for any executive of a publicly traded company whether your last name is Musk or not.

Steven Peikin, co-Director of the SEC’s Enforcement Division, said that corporate officers hold positions of trust and have important responsibilities to company owners – including the shareholders beyond Musk’s substantial position in the firm.

“An officer’s celebrity status or reputation as a technological innovator does not give license to take those responsibilities lightly,” Peikin stated.

Stephanie Avakian, the other co-Director of the SEC’s Enforcement Division, added:

“That standard applies with equal force when the communications are made via social media or another non-traditional form.”

By this weekend, Musk and Tesla had smartly settled the SEC fraud charges.

The deal, which is yet to be confirmed, is for Musk to pay a fine of $20 million, Tesla another $20 million, and for Musk to step down as Chairman of the Board but remain as CEO of the company.

Additionally, Tesla will appoint two new independent directors to its board and will establish a new committee of independent directors and put in place additional controls and procedures to oversee Musk’s communications.

While the $20 million fine amounts to little more than a slap on the wrist for the mega rich Musk the changes in management will hopefully reign in Musk’s freewheeling management methods.

SEC Chair Clayton issued a statement on the settlement with Tesla and Musk – something that does not typically occur in a routine enforcement actions. Clayton stated:

“This past Thursday, after the completion of a thorough investigation and following dialogue with representatives of Mr. Musk and Tesla, the Commission filed an action against Mr. Musk in federal district court.  I fully supported the filing of the action.

I also fully support the settlements agreed today and believe that the prompt resolution of this matter on the agreed terms, including the addition of two independent directors to the Tesla board and the other governance enhancements at Tesla, is in the best interests of our markets and our investors, including the shareholders of Tesla.

This matter reaffirms an important principle embodied in our disclosure-based federal securities laws.  Specifically, when companies and corporate insiders make statements, they must act responsibly, including endeavoring to ensure the statements are not false or misleading and do not omit information a reasonable investor would consider important in making an investment decision.”

So who wins in all of this? Tesla shareholders do.

The enforcement action should help compel Tesla and Musk to act in a more professional manner instead of a rich guys playground.

The removal of Musk as Chair, and addition of two new independent board members, will hopefully add some managerial clout to a board that has been negligent in their oversight of the company in the past. Musk recently went on a radio interview where he allegedly smoked marijuana and acted in a bizarre fashion. What did the board of Tesla do? Zippo. Nothing.

In this situation, the SEC Enforcement Division acted appropriately and should be commended in settling this matter as quickly as possible. A lingering lawsuit would be bad for all shareholders. The fine was material but not harmful to the operations of the firm which reportedly has $2.2 billion in cash on hand (even though they are burning through it rapidly).  Settlement means Tesla can move forward with its goal of becoming profitable.

The fact the SEC demanded Musk be removed as Board Chair is an important action and statement. It is the opinion of this writer that the title of CEO and Chairman of the Board should never be shared in a public corporation. There is an implicit conflict of interest when this occurs in listed firms. Boards drive strategy. CEOs execute on agreed upon objectives. Let’s hope Musk, and the Board of Tesla, have both learned a valuable lesson.

 

Rayvolt & Crowdcube: Stylishly Cruisin’ toward an E-Bike Rayvolution

What do Harley-Davidson, Tesla and Rip Curl have in common? Each has showcased Rayvolt bikes in their hallowed halls. From a garage brand making custom bikes, Barcelona-based Rayvolt has grown into an international brand with reportedly 50K followers on social media. Pre-valued at £9,500,000, the startup broke even (1.3K GBP) in 2017. Ready to move forward at a faster clip, Rayvolt has paired with Crowdcube to raise £450,000. At this writing, Rayvolt has secured over 40% of its goal within its campaign’s first week, or more than £185,460 from 79+ investors, for the 4.52% equity offered.

[easy-tweet tweet=”.@rayvoltbike @crowdcube :yesterday’s charm, tomorrow’s technology, today’s solution @CrowdcubeES #ebike #bcn #crowdfunding #JoinTheRayvolution!”]

Having already established a retail distribution network in 23 different countries, Rayvolt is ready to “be the lifestyle brand of transportation by creating unique vehicles full of character.” The crisp Insta marketing exemplifies this mission.

“Our iconic Cruzer [pictured beside iconic Rocky sculpture in the City of Brotherly Love. Eye of the tiger, Rayvolt.] is inspired by the first Harley-Davidson and Indian from the early 1900s, the London Cafe Racer from 1960 and the California Beach Cruiser,” explained Rayvolt on its campaign. “All this contrasted with a twist of technology featuring an onboard computer loaded with smart features. We define Rayvolt as a technology company with a lifestyle approach.”

Funding will be used to grow Rayvolt’s market to a broader clientele and produce new models that reflect its core values: “yesterday’s charm, tomorrow’s technology, today’s solution.”

“The e-bike market has a double-digit growth in most countries and the moped market has experienced a decline,” noted the campaign. “We feel that there is a great opportunity for commuter bikes to replace those obsolete gasoline vehicles.”

Future marketing plans include:

  • expanding the model range: “we designed 6 different models that all target a different customer profile, yet keeping our core, we make bikes for the lovers of beautiful objects.”
  • strengthening the brand image to create merchandising that pairs with the bikes.
  • Franchising. Rayvolt currently has a Barcelona Showroom which is profitable selling a single product (only Cruzer is in the market at this time); in 2019, Rayvolt intends to franchise the concept in various destination stores.

[easy-tweet tweet=”.@rayvoltbike :’We define Rayvolt as a technology company with a lifestyle approach.’ @crowdcube @CrowdcubeES  #crowdfunding #ebike”]

Co-Founded by CEO Mat Rauzier, a former yacht Captain and naval architect, COO Ying Zhang and CTO Jaime Pla, Rayvolt noted recent success with its Cruzer model (UK prices start at 2800 GBP) at Surf Expo 2018 with the Cruzers with 12 new dealers secured in North America.

“Most of those dealers are Surf and watersport oriented which is a great opportunity to reach a totally different clientele and enhance the lifestyle effect of the Brand,” blogged Rauzier.

The brand has also partnered with legendary guitar maker Nik Huber who designed a new guitar co-branded with Rayvolt, inspired by his british racing green Cruzer.

Rayvolt currently sells to dealers in France, Spain, Holland and Sweden and has appointed a US importer & distribution company that is creating the shop network in North America. In addition, Rayvolt was invited to the Wow expo in Dubai in November where it plans to find Middle East Partners. Rayvolt has
appointed a distribution company in Germany to secure growth and market share and has just shipped a container of bikes to its new Japanese distribution partner.

“By the end of 2019 we want to be present in China, Australia and Korea,” shared Rauzier via Crowdcube. “Already in discussion with few potential partners there.South America is in our sight, but we didn’t find partners there yet.”

For more information about Rayvolt’s Crowdcube campaign, please click here. The electric bike’s equity crowdfunding campaign closes in 23 days.

________________________________________________

 

Overfunding: UK Rental Car Brand Whitecar Surpasses £650,000 Funding Target During Crowdcube Round

Whitecar, a UK-based new rental car brand, has successfully secured its initial £650,000 equity crowdfunding target through Crowdcube. The company originally sought to raise £850,000 but has decided to lower the funding goal after closing funds through a subscription that cannot be reflected on the Crowdcube progress bar.

As previously reported, White Car describes itself as UK’s leading new car rental brand, notably offers only white Tesla car in Heathrow, Gatwick, Manchester, and Edinburgh airports.

Whitecar opened at Heathrow in July 2016 with 5 Tesla Model S cars and set out to prove the business case. With 1,828 customers, two of which have become investors and directors, experience proved that there is an opportunity to create significant value for shareholders by expanding the concept across European airports. 3 more airport outlets followed during 2017; Manchester, Edinburgh and Gatwick and the company is ready to scale.”

The company also reported since starting with 5 Tesla 90D’s, it has grown to a fleet of 15 cars and intends to expand to over 900 cars and operate from at least 30 hubs in the UK and Europe by 2022. Current price for rentals £149 per day and is projected to change to £129 post-funding round. The company also noted that it currently has a revenue run rate of £600,000 per year (year 1 loss projection of £800,000).

Funds from the Crowdcube campaign will be used to rollout additional hubs across the UK and Europe. This will include Dublin, Oslo, Frankfurt, Geneva, Madrid, Malaga, and Zurich. White Car added:

We can open new outlets cheaply and low overheads mean the directors believe that, on current assumptions, the company does not require further equity capital before exit.”

The campaign is currently set to close next Wednesday.

UK Rental Car Brand Whitecar Now Seeking £850,000 Through Equity Crowdfunding Platform Crowdcube

Whitecar, a UK-based new rental car brand, has launched an equity crowdfunding campaign on Crowdcube to raise £850,000 as it preps for expansion. The company, which describes itself as UK’s leading new car rental brand, notably offers only white Tesla car in Heathrow, Gatwick, Manchester, and Edinburgh airports.

Whitecar opened at Heathrow in July 2016 with 5 Tesla Model S cars and set out to prove the business case. With 1,828 customers, two of which have become investors and directors, experience proved that there is an opportunity to create significant value for shareholders by expanding the concept across European airports. 3 more airport outlets followed during 2017; Manchester, Edinburgh and Gatwick and the company is ready to scale.”

Whitecar also noted that since starting with 5 Tesla 90D’s, it has grown to a fleet of 15 cars and intends to expand to over 900 cars and operate from at least 30 hubs in the UK and Europe by 2022. Current price for rentals £149 per day and is projected to change to £129 post-funding round. The company also noted that it currently has a revenue run rate of £600,000 per year (year 1 loss projection of £800,000).

Funds from the Crowdcube campaign will be used to rollout additional hubs across the UK and Europe. This will include Dublin, Oslo, Frankfurt, Geneva, Madrid, Malaga, and Zurich. The company also reported:

We can open new outlets cheaply and low overheads mean the directors believe that, on current assumptions, the company does not require further equity capital before exit.”

Since its launch, the campaign has secured nearly £475,000 from more than 50 investors. It is set to close mid-December.

LendUp Appoints Former Tesla VP Bill Donnelly As First Chief Financial Officer

LendUp, a socially responsible online lender on a mission to redefine financial services for the emerging middle class, announced on Tuesday it has appointed former Vice President of Global Financial Services for Tesla, Bill Donnelly, as its new (and first) Chief Financial Officer.

According to LendUp, Donnelly has 30 years of experience in consumer credit with extensive experience in credit cards and loans products. He spent the past four years with Tesla as Vice President of Global Financial Services and was responsible for providing financing solutions for Tesla’s customers across 29 countries. Donnelly also served as President of Tesla’s captive finance company, Tesla Finance LLC. Speaking of Donnelly’s appointment, Sasha Orloff, Co-Founder and CEO of LendUp, stated:

“Our strengthened leadership team, from some of the world’s fastest-growing and most impactful companies, will help LendUp accelerate our efforts to build a lasting, iconic company that will be a category leader for years to come. We couldn’t be more excited to have an executive of Bill’s caliber join our quickly expanding team. Tesla is one of the most innovative companies in the world, and completely disrupted the sleepy auto industry. Bill’s experience leading complex global financing programs, and building first-of-their-kind, mobile-first platforms, will be invaluable to us as we continue to build out our product ecosystem and be on the forefront of serving more Americans in need of better financial services options.”

Donnelly went on to comment:

“I have long admired LendUp for the important work the company is doing to expand credit access and help people improve their financial health. At Tesla I witnessed how a strong sense of mission combined with a talented, passionate team can lead to incredible success and to overcoming seemingly insurmountable challenges. I have found that same sense of mission among LendUp’s amazingly talented and passionate team. I look forward to leading our finance organization and serving as a strategic partner to the entire team as we continue building innovative and mobile-first financial services products. Together, I can’t wait to achieve extraordinary success—for our customers and for our investors.”

In addition to Donnelly, Anu Shultes has joined as General Manager of LendUp’s loans business and Dr. Leonard Roseman has joined LendUp as Chief Data Scientist. LendUp recently surpassed $1.25 billion in originations and claims it has saved its borrowers $150 million in fees and interest through the use of its credit card and loan products.

Brief: Crowd2Fund’s ‘Smart Money’ Investor Coin To Be Revealed At Exclusive Mayfair Launch

crowd2fund smart money

Crowd2Fund has developed one of the first crowdfunding coins, “Smart Money,” exclusively for members of the Crowd2Fund Investor Club, according to the company’s press release. It entitles members to receive a coin about the size of a £2 piece which has an RFID (radio frequency identifier) chip built into it. Crowd2Fund is calling this “Smart Money.” Investors will be able to link their Crowd2Fund account to the coin so that funds can be spent directly from the platform in the same way money can be spent using a contactless credit card.Crowd2Fund Founder

Initially the “Smart Money” will play a role similar to that of a loyalty card; however, the ultimate aim of developing the RFID-enabled coin is to find a more cost-effective way to make financial transfers for Crowd2Fund investors, potentially using blockchain and circumventing the traditional payments system. The technology being developed behind the “Smart Money” is the first of many areas of FinTech, other than crowdfunding, which Crowd2Fund is seeking to disrupt.

Crowd2Fund cupsBecoming a member of the Investor Club allows you to gain access to a loyalty scheme exclusively open to individuals who have invested a significant amount on the platform. Benefits of the Investor Club will include rewards and special offers from luxury brands and businesses that have been funded via the platform. Tesla is one of the first companies who are interested in signing up. Members will be invited to exclusive investor events where they can meet other members of this selective club.

The first event, to launch the ‘Smart Money’ coin and Investor Club, takes place on 2nd of December at the exclusive Erata Galleries in Mayfair. The intimate setting will allow investors to find out more about the Investor Club and its benefits as well as watch demos of innovative disruptive businesses and network with like-minded peers.

Chris Hancock, CEO of Crowd2Fund said,

The launch of the Investor Club will allow us to offer a highly personal experience to our best customers. The crowdfunding industry is growing up, and it is important that the industry accommodates sophisticated investors who understand the risks of lending and investing online and have expectations of receiving a high level of service. There has been a lot of talk amongst investors about the ‘Smart Money” coin and we are proud to be able to finally reveal it and it’s benefits on Wednesday. We know investors will not be disappointed.

Crowdfunding Campaign Launched to Battle New Jersey Tesla Ban

Governor Chris ChristieA crowdfunding campaign has been launched on FundElevator to raise donations to battle the State of New Jersey’s ban on Tesla sales.

Money raised will be designated for a lobbying effort to fight against the odd ban.  The  group behind the campaign has labeled themselves the “People’s PAC”, claims that the only reason this ban happened is because of lobbying by auto dealers, and not because it is good for the public.

In a statement on their campaign page the organizers declare;

Tesla sells directly to us instead of using a dealership system precisely because they are not a traditional company. They want to educate, relieve buyer pressure, and put those savings back into the company so they can continue to innovate. Right now, they are making a more affordable model, which will be released in 2015/16.

But this isn’t about whether or not you can one day afford a Tesla- it’s about not sitting by while politicians and special interest groups stop American growth and progress.

Fund ElevatorIt’s time we show politicians and special interest groups that we will no longer be silent. We will no longer sit by and watch our political system stifle innovation. If our democracy is for sale, then it’s time we become the buyers.

And politicians aren’t that expensive. In NC it only took $8,000 to get a state senator to sponsor an anti-Tesla bill. So give what you can, $1, $5—it’s not the amount of money we raise but the number of people we get to contribute that counts—it is the popular support that is what makes this movement invaluable, this, is what Tesla needs. If we don’t hit our goal off $155,000 (the amount that NJCAR, NJ’s Auto Dealers’ group, spent lobbying last year) in 90 days you will get a full refund.

Ban Tesla Sales New JerseyIn a release the organizers state the Auto Dealers of America, a powerful lobby, has been fighting to ban Tesla in several states. The contributions to sponsors of such bills can be tracked on sites like followthemoney.org.

The campaign has promised full refunds if their goal of $155,000 is not hit in 90 days.  The campaign has been launched without the knowledge of Tesla and is completely independent from the company.

Kickstarter Has Already Accomplished The Hardest Thing For An Internet Brand

kickstarterSince launching on April 28th, 2009, Kickstarter has enjoyed the type of meteoric rise and success reserved for a precious few online brands.

There are a handful of reasons for this. First and foremost, consider monetization. Companies like Google, Twitter and Facebook all launched without a way to keep the lights on, relying heavily on outside funding in the early years. Kickstarter’s monetization strategy is intrinsic, transparent and simple to understand. For every dollar Kickstarter makes there is an artist or entrepreneur out there who reached their respective funding goal. Customer satisfaction? I’d say so. Meanwhile, Kickstarter adds to the war chest and gains the ability to hire terrific talent, put them in an amazing office space and empower them to do awesome things, all without relinquishing creative control.

Between Veronica Mars and Zach Braff alone the earned media for Kickstarter is astounding. They manage to stay top of mind all the time.

Veronica Mars The Funds Continue to Roll In

Secondly, Kickstarter somehow always manages to land the campaigns that move the needle. Consider this: the largest campaign on Kickstarter to date was the Pebble watch at $10-million-plus dollars. The largest on chief competitor Indiegogo’s site? $1.37 million for Matthew Inman’s Tesla Museum. Between Veronica Mars and Zach Braff’s “Wish I Was Here” alone the earned media for Kickstarter is astounding. They manage to stay top of mind all the time. Celebrities from Ricki Lake to Seth Godin have launched a Kickstarter project.

The last reason, however, is the most important and the most astonishing considering Kickstarter is a mere four years old.

Kickstarter is ubiquitous.

The hardest thing to accomplish for an Internet brand is becoming a verb. We used to “search” for things online, but now we just “Google” them. You don’t post to Twitter, you just “tweet.” Today do you crowdfund something or do you “Kickstart” it? Kickstarter’s brand is so strong that it’s becoming synonymous with crowdfunding in general. Incredible that they have managed to do this in such a short amount of time and in this technological climate. Disruption seems to happen so often anymore… but not like this.

To be fair, Kickstarter has had a lot of help. The media has played an enormous role in spreading the Kickstarter gospel, and they continue to do so. They will continue to do so as long as Kickstarter can land the next great crowdfunding campaign. It’s hard to imagine that any competitor is going to be able to waltz in and steal market share in the foreseeable future.

Maybe we need to collectively step back and appreciate what we’ve seen with Kickstarter, because it doesn’t happen very often and especially not this quickly. Kickstarter is a platform, an idea, an international movement and a verb. Enjoy the show.

Tesla Laboratory Purchased with Proceeds from Crowdfunding

Nikola Tesla Museum MissionTesla Wardenclyffe Laboratory Purchased For Museum with Funds Raised on Indiegogo.

Friends of Science East, Inc., dba Tesla Science Center at Wardenclyffe, is pleased to announce that it has completed the purchase of the last remaining laboratory of scientist, visionary, and inventor Nikola Tesla in Shoreham, NY. The site was sold by Agfa Corporation, with headquarters in New Jersey.

The 15.69-acre laboratory site, known as Wardenclyffe, is where Tesla planned his wireless communications and energy transmission tower, in the early 1900s. He was never able to complete the construction of the tower due to lack of funds.

At the end of August 2012, Friends of Science East, Inc. partnered with online comic Matthew Inman (TheOatmeal.com) to hold an online crowdfunding campaign on Indiegogo.com in which they were able to raise $1.37 million towards saving the Wardenclyffe site. Over 33,000 people from 108 countries contributed to the success of the campaign, which reached the $1 million mark in just over a week.

“This is a major milestone in our almost two-decade effort to save this historically and scientifically significant site. We haveTesla Science Center been pursuing this dream with confidence that we would eventually succeed,” said Gene Genova, Vice President of the organization. “We are very excited to be able to finally set foot on the grounds where Tesla walked and worked.”

“Now begin the next important steps in raising the money needed to restore the historic laboratory,” said Mary Daum, treasurer. “We estimate that we will need to raise about $10 million to create a science learning center and museum worthy of Tesla and his legacy. We invite everyone who believes in science education and in recognizing Tesla for his many contributions to society to join in helping to make this dream a reality.”

Tesla Science Center at Wardenclyffe is a 501 (c) 3 not-for-profit corporation in the state of New York, dedicated to saving and restoring Wardenclyffe, and transforming it into a science learning center and museum.

Tesla Museum raises over $1.3 million, puts Indiegogo on the map

We all know about Kickstarter, but there’s another crowdfunding kid on the block – Indiegogo. Indiegogo, along with Matthew “The Oatmeal” Inman, launched an Indiegogo campaign that aimed at buying some land for a Nikola Tesla dedicated museum.

Read More at Tweaktown