- Distributed throughout New England by Valley, National, and Farrell (own regional distribution rights of Anheuser- Busch) as well as Atlas and Central (own regional Miller-Coor Distribution rights).
- The two founders previously built Litl' Squirts, a children juice brand. Endorsed by the John Stalker Institute of Nutrition as a healthy beverage for school aged children.
- The product is organic, vegan, non-GMO, soy-free, dairy-free, gluten-free with no additional sweeteners.
- Company plans to donate 5% of profits to support local animal welfare organizations.
- Seed :
- Minimum Investment: US $500 per investor
- : Crowd Note
- US $2,500,000 :
- Side by Side Offering
4Pure, Inc. is a Maine company that produces a line of organic lemonades made from only 4 ingredients; purified water, organic maple syrup, organic fruit purees and organic lemon juice. The beverage contains no dyes, corn syrup, or GMOs, yet provides the added health benefits of maple syrup and contains less sugar than conventional sweeteners. Each of 4Pure’s products is vegan, free of gluten, soy, and dairy, and created from only four simple ingredients making it a pure, clean choice for consumers. The line consists of three delicious flavors—Pure Lemonade, Blueberry Lemonade, and Raspberry Lemonade. The company packages its products in BPA-free bottles, and donates 5% of profits to support local animal welfare organizations.
4Pure is a clean beverage option for the health conscious consumer. Maple syrup is used as the primary sweetener in our beverage products. Not only is maple syrup lower on the glycemic index than conventional white sugars or corn syrup; maple syrup is also packed full of nutrients such as Potassium, Manganese, Zinc, Riboflavin, Thiamine and Calcium. Each of the three flavors (Pure Maple Lemonade, Raspberry Maple Lemonade and Blueberry Maple Lemonade) is made with the highest quality organic ingredients available. What’s not in the 4Pure bottle? A lot - in an entirely good way! The product is organic, vegan, non-GMO, soy-free, dairy-free, gluten-free with no additional sweeteners. Using maple syrup as the primary sweetener has created a lemonade that not only quenches your thirst, but also elevates the drinking experience with a light creamy texture that is smooth and far surpasses any other commercial lemonade.
The idea of 4Pure started just over two years ago. While working with Hannaford Supermarkets on our healthy kid's drinks, Litl' Squirts. My contact gave me the sales data for all their juice based drinks. I was immediately drawn to the high velocity sales data for teas and lemonades. In a meeting with Dr. Dirk Asherman, (friend and partner in the Litl' Squirts product), I mentioned the data I had received from Hannaford Brothers. He responded by saying "Have you ever had a lemonade sweetened with maple syrup"? My response was "no", but I'm gonna give it a try. That next day, with the help of my kids, Jacob and Audrey, we began mixing up different formulations of lemonades and teas sweetened with maple syrup. I was astonished at how good the flavor was. The maple was not overpowering and there was a really nice balance of sweet and tart. I knew right away that this could be a huge winner. “Keeping it simple” would be our motto, with only 4 organic ingredients in each bottle.
Now the research began. Is there enough maple syrup in the World to scale a successful beverage product? That question was answered very quickly with the help of Google and our neighbors to the North, Canada. The United States keeps gold bars in Fort Knox, the Canadians keep maple syrup in their "Fort Knox". Don't believe me? Look it up! As a matter of fact, the Canadian Government is still trying to solve a heist that netted $30 million dollars worth of maple syrup that vanished almost overnight. Later that day, I called my friend and business partner Chris Lewis. We need to run the numbers and look at the feasibility of producing a lemonade sweetened with maple syrup. Within a few weeks we had sourced ingredients and other raw materials enough to put together a preliminary budget of what the product would cost in a full scale production. I knew that maple sap and maple syrup were beginning to become very hot commodities in the beverage industry. I had met Kate Weiler a few times, one of the founders of Drink Maple. I loved her product and I had heard of their explosive growth. People are looking for alternatives in their food choices. Not necessarily a complete change, but if you can take a classic and make it better? That would be a hit. Especially with Millennials. And so began the work of meeting with our food scientists, nutritional labels, raw material sourcing, organic certifications and meeting with our established contacts in the beverage industry.
The name and logo for our labels was still up in the air. What do we call it? I had been wanting to work with Taja Dockendorf and her team at Pulp and Wire. A local marketing company that specializes in the food industry. I had a few names in mind and was looking for an old fashioned look of the label. Something that would stand out. I had my initial meeting with Taja and her team. It went very well. We discussed several different ideas. We adjourned and looked to meet again in a week. Our next meeting was when Taja and her team showed me 5 different versions of logos. 4 were similar to what my vision was and #5 was a show stopper. Not only had they completely changed the label, they came up with a different name, 4Pure. My first reaction was "Wow, that is so profoundly different than anything I had contemplated, but I love it"! This screams simplicity and quality.
Before looking for sources of maple syrup outside the State of Maine, I researched the Maine Maple Syrup Association's website and reached out to Deke and Kurt Sawyer from Jackman, Maine. They said they could supply me with several barrels of organic maple syrup and could scale over time to produce even more. What is exciting for us is the opportunity to partner with Sawyer’s Maple Farm in Jackman, Maine to create a new market in the maple syrup industry. A high velocity product using maple syrup as a primary ingredient can cause such a profound and positive impact on a industry in the Northeast that can use a big boost. Our goal was to open an entirely new market for maple syrup, taking it from the breakfast table to a mainstream sweetener.
After we were able to produce a small sample run of 4Pure, we began setting appointments with an already established network of distributors in the Northeast. The response was amazing and at a perfect time. The distributors we were approaching had just lost Hubert's Lemonade to a Coca Cola acquisition and were looking for a product to fill the void. 4Pure not only fills the void, but is a clean beverage option for the health conscious consumer. After just a few meetings, we knew we had a winner.
A Side by Side offering refers to a deal that is raising capital under two offering types. If you plan on investing less than US $20,000.00, you will automatically invest under the Regulation CF offering type. If you invest more than US $20,000.00, you must be an accredited investor and invest under the Regulation D offering type.
|Terms & Description|
|Investor Types||Accredited Only||Accredited and Non-accredited|
|Round size||US $500,000||US $500,000|
|US $0||US $38,500|
|Minimum investment||$20,000||US $500|
|US $250,000||US $250,000|
|US $2,500,000||US $2,500,000|
|Closing Terms||The Company is making concurrent offerings under both Regulation CF and Regulation D (the "Combined Offerings"). Unless the Company raises at least the Target Amount of $25,000 under the Regulation CF offering and a total of $250,000 under the Combined Offerings (the “Closing Amount”) by the last day of the campaign, no securities will be sold in this offering, investment commitments will be cancelled, and committed funds will be returned.||The Company is making concurrent offerings under both Regulation CF and Regulation D (the "Combined Offerings"). Unless the Company raises at least the Target Amount of $25,000 under the Regulation CF offering and a total of $250,000 under the Combined Offerings (the “Closing Amount”) by the last day of the campaign, no securities will be sold in this offering, investment commitments will be cancelled, and committed funds will be returned.|
|Investment Management Agreement||All non-Major Purchasers will be subject to an Investment Management Agreement (“IMA”). The IMA will authorize an investment Manager to act as representative for each non-Major Purchaser and take certain actions for their benefit and on their behalf. Please see a copy of the IMA included with the Company's offering materials for additional details.||All non-Major Purchasers will be subject to an Investment Management Agreement (“IMA”). The IMA will authorize an investment Manager to act as representative for each non-Major Purchaser and take certain actions for their benefit and on their behalf. Please see a copy of the IMA included with the Company's offering materials for additional details.|
- Variety 12 pack of 4Pure.
- $50.00 donation to a local animal shelter.
- 3 - 12 packs of 4Pure.
- $100.00 donation to a local animal shelter.
- 12 month subscription of 4Pure. One 12 - pack per month. You choose flavor.
- $150.00 donation to a local animal shelter.
- 12 month subscription of 4Pure. One 12 - pack per month. You choose flavor.
- 12 month subscription of 1Qt. bottles of Maine maple syrup.
- $200.00 donation to a local animal shelter.
- 12 month subscription of 4Pure. One 12 - pack per month. You choose flavor.
- 12 month subscription of 1Qt. bottles of Maine maple syrup.
- Exclusive invite to spend a day with the product development team of 4Pure developing the next great flavor. All inclusive.
- $200.00 donation to local animal shelter.
- 12 month subscription of 4Pure. One 12 - pack per month. You choose flavor.
- 12 month subscription of 1Qt. bottles of Maine maple syrup.
- Exclusive invite to spend a weekend with the 4Pure management team tapping and collecting maple sap in the Northern Maine woods. Learning the process of boiling down the sap in our sugarhouse to make your own maple syrup. All inclusive.
- $200.00 donation to local animal shelter.
It is advised that you consult a tax professional to fully understand any potential tax implications of receiving investor perks before making an investment.
Please see the financial information listed on the cover page of the Form C and the Reviewed Financial Statements in the Data Room in addition to the following information.
The Company was incorporated on November 22, 2016 in the State of Maine. The financial statements of the Company were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The Company’s headquarters are located in Cumberland, ME. The Company makes delicious organic lemonade beverages without unnecessary additives. 4 Pure’s lemonades consist of only four ingredients. The sweetness comes from pure maple syrup. There are no dyes, no GMOs, and no corn syrup used to make 4 Pure’s product.
4 Pure, Inc. makes delicious organic lemonade beverages without unnecessary additives. Our lemonades consist of only four (4) ingredients. The sweetness comes from pure maple syrup. There are no dyes, no GMOs, and no corn syrup used to make our product.
We have historically relied on related party financing to fund operations. Since Inception, we have incurred losses and will incur additional costs until revenues are substantial enough to support operations. These matters raise substantial doubt about the Company’s ability to continue as a going concern. During the next 12 months, the Company intends to fund its operations with funding from sale of our products, our proposed Regulation Crowdfunding campaign, and debt and/or additional equity financing as determined to be necessary. There are no assurances that management will be able to raise capital on terms acceptable to the Company. If we are unable to obtain sufficient amounts of additional capital, we may be required to reduce the scope of our planned development, which could harm our business, financial condition and operating results. The financial statements do not include any adjustments that might result from these uncertainties.
Liquidity and Capital Resources
The proceeds from the Combined Offerings are essential to our operations. We plan to use the proceeds as set forth above under "Use of Proceeds", which is an indispensable element of our business strategy. The Combined Offering proceeds will have a beneficial effect on our liquidity, as we currently have $2,500 in cash on hand which will be augmented by the Combined Offering proceeds and used to execute our business strategy.
The Company does not have any additional sources of capital other than the proceeds from the Combined Offerings.
Capital Expenditures and Other Obligations
The Company does not intend to make any material capital expenditures in the future.
Material Changes and Other Information
Trends and Uncertainties
After reviewing the above discussion of the steps the Company intends to take, potential Purchasers should consider whether achievement of each step within the estimated time frame is realistic in their judgment. Potential Purchasers should also assess the consequences to the Company of any delays in taking these steps and whether the Company will need additional financing to accomplish them.
The financial statements are an important part of the Form C and should be reviewed in their entirety. The financial statements of the Company are in the Data Room.
Risks Related to the Company’s Business and Industry
Financial projections suggest potentially unrealistic growth. The Company’s financial model projects extremely rapid (up to 8x) growth in a very short amount of time, as the founders claim they are confident in their ability to scale up production rapidly because the beverage industry has an extremely steep growth curve. Further, initial margins are nearly at 0% in order to attract initial buyers for the product.
The Company has a low cash balance of $2,500 (as of October 2017). Although the Company anticipates a third production batch and additional sales this fall/winter, this balance may be insufficient to meet 4 Pure’s capital needs in the meantime. The Company will have to fund additional units to satisfy future orders in the coming months. The company may struggle to fund orders in the future without a line of credit or additional investment dollars.
There is little suggestion that 4 Pure has traction among consumers. Exposure to consumers has been minimal, and most of the brand’s confidence lies with distributors. Growth may not occur as rapidly if consumers do not like the product as anticipated.
Working capital. The Company could be harmed if it is unable to meet its cash demands to adequately manage its product inventory. Working capital for CPG companies is challenging to manage, and 4 Pure may struggle to fulfill and deliver orders. They may find it difficult to fund purchase orders if they experience more demand than they are anticipating. This problem could be exacerbated by the fact that the Company does not currently have a line of credit outside of founders’ capital.
The reviewing CPA has included a “going concern” note in the reviewed financials. The Company has historically relied on related party financing to fund operations. Since inception, the Company has incurred losses and will incur additional costs until revenues are substantial enough to support operations. These matters raised substantial doubt with the CPA about the Company’s ability to continue as a going concern. During the next 12 months, the Company intends to fund its operations with funding from sale of its products, the Combined Offerings, and debt and/or additional equity financing as determined to be necessary. The independent accountant notes that there are no assurances that management will be able to raise capital on terms acceptable to the Company, and that if the Company is unable to obtain sufficient amounts of additional capital, it may be required to reduce the scope of its planned development, which could harm our business, financial condition and operating results. The independent accountant further notes that the financial statements do not include any adjustments that might result from these uncertainties.
The Company has not filed its federal and state taxes for the 2016 tax year. The fact that a company has taken the steps necessary to file a tax return may be evidence that the company is a legitimate operation that is interested in complying with federal law. The lapse of tax filing may indicate poor corporate governance or legal oversight.
The Company’s CEO contributed $16,980 to the Company. Prior to the Company’s inception and for the period ended December 31, 2016, the Company’s CEO contributed $16,980 to the Company, primarily for inventory and operational expenses.
Deferred Compensation. In July 2017, the Company entered into an employment agreement. The employee agrees to defer all compensation until the Company secures funding in the amount of at least $300,000. The employee has the option to elect to convert any portion of the first $25,000 of his compensation to equity shares and take the balance of his salary in monetary form. Conversion will be done using a company valuation of $2,500,000.
We have a limited operating history upon which you can evaluate our performance, and accordingly, our prospects must be considered in light of the risks that any new company encounters. We were incorporated under the laws of Maine on November 22, 2016. Accordingly, we have no history upon which an evaluation of our prospects and future performance can be made. Our proposed operations are subject to all business risks associated with new enterprises. The likelihood of our creation of a viable business must be considered in light of the problems, expenses, difficulties, complications, and delays frequently encountered in connection with the inception of a business, operation in a competitive industry, and the continued development of advertising, promotions, and a corresponding client base. We anticipate that our operating expenses will increase for the near future. There can be no assurances that we will ever operate profitably. You should consider the Company’s business, operations and prospects in light of the risks, expenses and challenges faced as an early-stage company.
We may face potential difficulties in obtaining capital. We may have difficulty raising needed capital in the future as a result of, among other factors, our lack of an approved product and revenues from sales, as well as the inherent business risks associated with our company and present and future market conditions. Our business currently generates minimal sales and future sources of revenue may not be sufficient to meet our future capital requirements. We will require additional funds to execute our business strategy and conduct our operations. If adequate funds are unavailable, we may be required to delay, reduce the scope of or eliminate one or more of our marketing efforts, any of which may materially harm our business, financial condition and results of operations.
The development and commercialization of our products is highly competitive. We face competition with respect to any products that we may seek to develop or commercialize in the future. Our competitors include major companies worldwide. Many of our competitors have significantly greater financial, technical and human resources than we have and superior expertise in research and development and marketing approved products and thus may be better equipped than us to develop and commercialize products. These competitors also compete with us in recruiting and retaining qualified personnel and acquiring technologies. Smaller or early stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. Accordingly, our competitors may commercialize products more rapidly or effectively than we are able to, which would adversely affect our competitive position, the likelihood that our products will achieve initial market acceptance and our ability to generate meaningful additional revenues from our products.
We rely on other companies to provide raw materials, major components, basic ingredients subsystems for our products. We depend on these suppliers and subcontractors to meet our contractual obligations to our customers and conduct our operations. Our ability to meet our obligations to our customers may be adversely affected if suppliers or subcontractors do not provide the agreed-upon supplies or perform the agreed-upon services in compliance with customer requirements and in a timely and cost-effective manner. Likewise, the quality of our products may be adversely impacted if companies to whom we delegate manufacture of major components or subsystems for our products, or from whom we acquire such items, do not provide basic ingredients which meets required specifications and perform to our and our customers’ expectations.
In general, demand for our products and services is highly correlated with general economic conditions. A substantial portion of our revenue is derived from discretionary spending by individuals, which typically falls during times of economic instability. Declines in economic conditions in the U.S. or in other countries in which we operate may adversely impact our consolidated financial results. Because such declines in demand are difficult to predict, we or the industry may have increased excess capacity as a result. An increase in excess capacity may result in declines in prices for our products and services.
The Company’s success depends on the experience and skill of the board of directors, its executive officers and key employees. In particular, the Company is dependent on Will Boyle and Chris Lewis who are Founder and CFO of the Company. The Company has or intends to enter into employment agreements with Will Boyle although there can be no assurance that it will do so or that they will continue to be employed by the Company for a particular period of time. The loss of Will Boyle or any member of the board of directors or executive officer could harm the Company’s business, financial condition, cash flow and results of operations.
The amount of capital the Company is attempting to raise in this Offering is not enough to sustain the Company’s current business plan. In order to achieve the Company’s near and long-term goals, the Company will need to procure funds in addition to the amount raised in the Offering. There is no guarantee the Company will be able to raise such funds on acceptable terms or at all. If we are not able to raise sufficient capital in the future, we will not be able to execute our business plan, our continued operations will be in jeopardy and we may be forced to cease operations and sell or otherwise transfer all or substantially all of our remaining assets, which could cause a Purchaser to lose all or a portion of his or her investment.
We have not prepared any audited financial statements. Therefore, you have no audited financial information regarding the Company’s capitalization or assets or liabilities on which to make your investment decision. If you feel the information provided is insufficient, you should not invest in the Company.
We source certain packaging materials, such as bottles, caps and labels from a number of third-party suppliers and, in some cases, single-source suppliers. Although we believe that alternative suppliers are available, the loss of any of our packaging material suppliers could adversely affect our results of operations and financial condition. Our inability to preserve the current economics of these agreements could expose us to significant cost increases in future years.
We are heavily dependent on our distributors. Although we currently have a network of wholesale distributors, sustained growth will require us to maintain such relationships and enter into arrangements with additional distributors in new markets. No assurance can be given that we will be able to maintain our current distribution network or secure additional distributors on terms favorable to us, or at all.
Our business is substantially dependent upon awareness and market acceptance of our products and brands. Our business depends on acceptance by both our end consumers as well as our independent distributors of our brands as beverage brands that have the potential to provide incremental sales growth rather than reduce distributors’ existing beverage sales. We believe that the success of our product name brands will also be substantially dependent upon acceptance of our product name brands. Accordingly, any failure of our brands to maintain or increase acceptance or market penetration would likely have a material adverse affect on our revenues and financial results.
As a food production company, all of our products must be compliant with regulations by the Food and Drug Administration (“FDA”). We must comply with various FDA rules and regulations, including those regarding product manufacturing, food safety, required testing and appropriate labeling of our products. It is possible that regulations by the FDA and its interpretation thereof may change over time. As such, there is a risk that our products could become non-compliant with the FDA’s regulations and any such non-compliance could harm our business.
Our products rely on independent certification that they are organic and must comply with the requirements in order to label our products as such. The FDA has defined the term “organic”, “non-GMO” and "gluten-free" and we must comply with the FDA’s definition if we include this label on our products. The loss of any of these independent certifications, including for reasons outside of our control, could harm our business. The FDA has not yet defined “Dairy-free” or “Soy-free”, and these terms. In general, those with milk or soy allergies cannot rely on “dairy free” or “soy-free” claims and will need to scrutinize the ingredient statement for evidence of milk.
Risks Related to the Securities
The Crowd Notes will not be freely tradable until one year from the initial purchase date. Although the Crowd Notes may be tradable under federal securities law, state securities regulations may apply and each Purchaser should consult with his or her attorney. You should be aware of the long-term nature of this investment. There is not now and likely will not be a public market for the Crowd Notes. Because the Crowd Notes have not been registered under the Securities Act or under the securities laws of any state or non-United States jurisdiction, the Crowd Notes have transfer restrictions and cannot be resold in the United States except pursuant to Rule 501 of Regulation CF. It is not currently contemplated that registration under the Securities Act or other securities laws will be effected. Limitations on the transfer of the Crowd Notes may also adversely affect the price that you might be able to obtain for the Crowd Notes in a private sale. Purchasers should be aware of the long-term nature of their investment in the Company. Each Purchaser in this Offering will be required to represent that it is purchasing the Securities for its own account, for investment purposes and not with a view to resale or distribution thereof.
We are selling convertible notes that will convert into shares or result in payment in limited circumstances. These notes do not have a maturity date and only convert or result in payment in limited circumstances. If there is a merger, buyout or other corporate transaction that occurs before a qualified equity financing, investors will receive a payment of the greater of two times their purchase price or the amount of preferred shares they would have been able to purchase using the valuation cap. If there is a qualified equity financing (an initial public offering registered under the Securities Act or a financing using preferred shares),the notes will convert into a yet to-be-determined class of preferred stock. The notes will convert at a discount of 20%, or based on a $2.5 million valuation cap meaning investors would be rewarded for taking on early risk compared to later investors. Outside investors at the time of conversion, if any, might value the Company at an amount well below the $2.5 million valuation cap, so you should not view the $2.5 million as being an indication of the Company’s value. If you choose to invest, you should be prepared that your notes will never convert and will have no value.
We have not assessed the tax implications of using the Crowd Note. The Crowd Note is a type of debt security that does not include a set maturity date. As such, there has been inconsistent treatment under state and federal tax law as to whether securities like the Crowd Note can be considered a debt of the Company, or the issuance of equity. Investors should consult their tax advisers.
The Crowd Note contains dispute resolution provisions which limit your ability to bring class action lawsuits or seek remedy on a class basis. By purchasing a Crowd Note this Offering, you agree to be bound by the dispute resolution provisions found in Section 6 of the Crowd Note. Those provisions apply to claims regarding this offering, the Crowd Notes and possibly the securities into which the Crowd Note are convertible. Under those provisions, disputes under the Crowd Note will be resolved in arbitration conducted in Delaware. Further, those provisions may limit your ability to bring class action lawsuits or similarly seek remedy on a class basis.
You may have limited rights. The Company has not yet authorized Preferred Stock, and there is no way to know what voting rights those securities will have. In addition, as an investor in the Regulation CF offering you will be considered a Non-Major Investor under the terms of the notes offered, and therefore, you have more limited information rights and you will not have the right to automatically participate in future offerings, and therefore not have the same anti-dilution protections as Major Investors.
A majority of the Company is owned by a small number of owners. Prior to the Offering the Company’s current owners of 20% or more beneficially own up to 89.3% of the Company. Subject to any fiduciary duties owed to our other owners or investors under Maine law, these owners may be able to exercise significant influence over matters requiring owner approval, including the election of directors or managers and approval of significant Company transactions, and will have significant control over the Company’s management and policies. Some of these persons may have interests that are different from yours. For example, these owners may support proposals and actions with which you may disagree. The concentration of ownership could delay or prevent a change in control of the Company or otherwise discourage a potential acquirer from attempting to obtain control of the Company, which in turn could reduce the price potential investors are willing to pay for the Company. In addition, these owners could use their voting influence to maintain the Company’s existing management, delay or prevent changes in control of the Company, or support or reject other management and board proposals that are subject to owner approval.
You will be bound by an investment management agreement, which limits your voting rights. As a result of purchasing the notes, all Non-Major Investors (including all investors investing under Regulation CF) will be bound by an investment management agreement. This agreement will limit your voting rights and at a later time may require you to convert your future preferred shares into common shares without your consent. Non-Major Investors will be bound by this agreement, unless Non-Major Investors holding a majority of the principal amount outstanding of the Crowd Notes (or majority of the shares of the preferred equity the notes will convert into) held by Non-Major Investors vote to terminate the agreement.
Start-up investing is risky. Investing in startups is very risky, highly speculative, and should not be made by anyone who cannot afford to lose their entire investment. Unlike an investment in a mature business where there is a track record of revenue and income, the success of a startup or early-stage venture often relies on the development of a new product or service that may or may not find a market. Before investing, you should carefully consider the specific risks and disclosures related to both this offering type and the company which can be found in this company profile and the documents in the data room below.
Your shares are not easily transferable. You should not plan on being able to readily transfer and/or resell your security. Currently there is no market or liquidity for these shares and the company does not have any plans to list these shares on an exchange or other secondary market. At some point the company may choose to do so, but until then you should plan to hold your investment for a significant period of time before a “liquidation event” occurs. A “liquidation event” is when the company either lists their shares on an exchange, is acquired, or goes bankrupt.
The Company may not pay dividends for the foreseeable future. Unless otherwise specified in the offering documents and subject to state law, you are not entitled to receive any dividends on your interest in the Company. Accordingly, any potential investor who anticipates the need for current dividends or income from an investment should not purchase any of the securities offered on the Site.
Valuation and capitalization. Unlike listed companies that are valued publicly through market-driven stock prices, the valuation of private companies, especially startups, is difficult to assess and you may risk overpaying for your investment. In addition, there may be additional classes of equity with rights that are superior to the class of equity being sold.
You may only receive limited disclosure. While the company must disclose certain information, since the company is at an early-stage they may only be able to provide limited information about its business plan and operations because it does not have fully developed operations or a long history. The company may also only obligated to file information periodically regarding its business, including financial statements. A publicly listed company, in contrast, is required to file annual and quarterly reports and promptly disclose certain events — through continuing disclosure that you can use to evaluate the status of your investment.
Investment in personnel. An early-stage investment is also an investment in the entrepreneur or management of the company. Being able to execute on the business plan is often an important factor in whether the business is viable and successful. You should be aware that a portion of your investment may fund the compensation of the company’s employees, including its management. You should carefully review any disclosure regarding the company’s use of proceeds.
Possibility of fraud. In light of the relative ease with which early-stage companies can raise funds, it may be the case that certain opportunities turn out to be money-losing fraudulent schemes. As with other investments, there is no guarantee that investments will be immune from fraud.
Lack of professional guidance. Many successful companies partially attribute their early success to the guidance of professional early-stage investors (e.g., angel investors and venture capital firms). These investors often negotiate for seats on the company’s board of directors and play an important role through their resources, contacts and experience in assisting early-stage companies in executing on their business plans. An early-stage company may not have the benefit of such professional investors.
Frequently Asked Questions
A Side by Side offering refers to a deal that is raising capital under two offering types. This Side by Side offering is raising under Regulation CF and Rule 506(c) of Regulation D.
The Form C is a document the company must file with the Securities and Exchange Commission (“SEC”) which includes basic information about the company and its offering and is a condition to making a Reg CF offering available to investors. It is important to note that the SEC does not review the Form C, and therefore is not recommending and/or approving any of the securities being offered.
Before making any investment decision, it is highly recommended that prospective investors review the Form C filed with the SEC (included in the company's profile) before making any investment decision.
Rule 506(c) under Regulation D is a type of offering with no limits on how much a company may raise. The company may generally solicit their offering, but the company must verify each investor’s status as an accredited investor prior to closing and accepting funds. To learn more about Rule 506(c) under Regulation D and other offering types check out our blog and academy.
Title III of the JOBS Act outlines Reg CF, a type of offering allowing private companies to raise up to $1 million from all Americans. Prior capital raising options limited private companies to raising money only from accredited investors, historically the wealthiest ~2% of Americans. Like a Kickstarter campaign, Reg CF allows companies to raise funds online from their early adopters and the crowd. However, instead of providing investors a reward such as a t-shirt or a card, investors receive shares, typically equity, in the startups they back. To learn more about Reg CF and other offering types check out our blog and academy.
When you complete your investment on SeedInvest, your money will be transferred to an escrow account where an independent escrow agent will watch over your investment until it is accepted by 4 Pure. Once 4 Pure accepts your investment, and certain regulatory procedures are completed, your money will be transferred from the escrow account to 4 Pure in exchange for your shares. At that point, you will be a proud owner in 4 Pure.
To make an investment, you will need the following information readily available:
- Personal information such as your current address and phone number
- Employment and employer information
- Net worth and income information
- Social Security Number or government-issued identification
- ABA bank routing number and checking account number (typically found on a personal check or bank statement)
If you are investing under Rule 506(c) of Regulation D, your status as an Accredited Investor will also need to be verified and you will be asked to provide documentation supporting your income, net worth, revenue, or net assets or a letter from a qualified advisor such as a Registered Investment Advisor, Registered Broker Dealer, Lawyer, or CPA.
The Crowd Note is a security which allows crowd investors to largely realize the same economic benefit traditional investors have historically received when investing in startups. For a convertible note round, investors under $20,000 will have their investment convert into preferred equity at liquidity event, locking in a share price at a discount to the next priced round, and will have an interest rate on their investment. Investors investing $20,000 and over will convert into preferred equity at the subsequent priced round at a discount to that priced round and will have an interest rate on their investment. For a priced round, investors under $20,000 will have their investment convert into preferred equity at a liquidity event, locking in the share price of the current round.
An investor is limited in the amount that he or she may invest in a Reg CF offering during any 12-month period:
- If either the annual income or the net worth of the investor is less than $100,000, the investor is limited to the greater of $2,000 or 5% of the lesser of his or her annual income or net worth.
- If the annual income and net worth of the investor are both greater than $100,000, the investor is limited to 10% of the lesser of his or her annual income or net worth, to a maximum of $100,000.
Separately, 4 Pure has set a minimum investment amount of US $500.
Accredited investors investing $20,000 or over do not have investment limits.
You are a partial owner of the company, you do own shares after all! But more importantly, companies which have raised money via Regulation CF must file information with the SEC and post it on their websites on an annual basis. Receiving regular company updates is important to keep shareholders educated and informed about the progress of the company and their investment. This annual report includes information similar to a company’s initial Reg CF filing and key information that a company will want to share with its investors to foster a dynamic and healthy relationship.
In certain circumstances a company may terminate its ongoing reporting requirement if:
- The company becomes a fully-reporting registrant with the SEC
- The company has filed at least one annual report, but has no more than 300 shareholders of record
- The company has filed at least three annual reports, and has no more than $10 million in assets
- The company or another party purchases or repurchases all the securities sold in reliance on Section 4(a)(6)
- The company ceases to do business
However, regardless of whether a company has terminated its ongoing reporting requirement per SEC rules, SeedInvest works with all companies on its platform to ensure that investors are provided quarterly updates. These quarterly reports will include information such as: (i) quarterly net sales, (ii) quarterly change in cash and cash on hand, (iii) material updates on the business, (iv) fundraising updates (any plans for next round, current round status, etc.), and (v) any notable press and news.
Currently there is no market or liquidity for these shares. Right now 4 Pure does not plan to list these shares on a national exchange or another secondary market. At some point 4 Pure may choose to do so, but until then you should plan to hold your investment for a significant period of time before a “liquidation event” occurs. A “liquidation event” is when 4 Pure either lists their shares on an exchange, is acquired, or goes bankrupt.
You can return to SeedInvest at any time to view your portfolio of investments and obtain a summary statement. If invested under Regulation CF you may also receive periodic updates from the company about their business, in addition to monthly account statements.
This is 4 Pure's fundraising profile page, where you can find information that may be helpful for you to make an investment decision in their company. The information on this page includes the company overview, team bios, and the risks and disclosures related to this investment opportunity. If the company runs a side by side offering that includes an offering under Regulation CF, you may also find a copy of the 4 Pure's Form C. The Form C includes important details about 4 Pure's fundraise that you should review before investing.
For offerings made under Regulation CF, you may cancel your investment at any time up to 48 hours before a closing occurs or an earlier date set by the company. You will be sent a reminder notification approximately five days before the closing or set date giving you an opportunity to cancel your investment if you had not already done so. Once a closing occurs, and if you have not canceled your investment, you will receive an email notifying you that your shares have been issued. If you have already funded your investment, your funds will be promptly refunded to you upon cancellation. To cancel your investment, you may go to your portfolio page
If you invest under any other offering type, you may cancel your investment at any time, for any reason until a closing occurs. You will receive an email when the closing occurs and your shares have been issued. If you have already funded your investment and your funds are in escrow, your funds will be promptly refunded to you upon cancellation. To cancel your investment, please go to your portfolio page.