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Ernest Supplies

Omnichannel skincare brand redefining clean, sustainable, and inclusive products.

  • $1,000Minimum
  • $5,000,000Valuation cap
  • Crowd NoteSecurity Type

By making a reservation, you are requesting a spot to invest in Ernest Supplies's upcoming offering. A reservation is non-binding and you may change the amount at any time.

Ernest Supplies is accepting reservations for an Offering under Regulation CF. No money or other consideration is being solicited, and if sent in response, it will not be accepted. No sales of securities will be made or commitment to purchase accepted until a Form C has been filed with the Securities and Exchange Commission (the "Commission") and approval of any other required government or regulatory agency. A reservation is non-binding and involves no obligation or commitment of any kind. No offer to buy securities can be accepted and no part of the purchase price can be received without a Form C has been filed with the Commission. A copy of the Form C may be obtained both here and below.


Company Highlights

  • Has been sold at accounts like Neiman Marcus, Selfridges, Anthropologie and Cult Beauty and developed a limited capsule collection sold at Target.
  • Achieved repeat customer rate of 53% in H2 2020, double the industry average. A “fan favorite” at Birchbox and named “Most Popular” at GQ.
  • Invited to create custom kits for all nominees, winners, and presenters in the 2018 Golden Globes. Brand and founder were featured in an American Express Small Business commercial and have been featured in publications like Allure, Vogue, GQ, InStyle, Paper, Refinery29 and People.
  • Products have won multiple awards from GQ and Men's Health, including GQ awards in 2016 and 2017 for our shaving cream and razor as one of the best grooming products of the year. Our sustainable and eco-forward packaging has won two awards for its design.
  • Selected for Macy’s prestigious Diverse Brand Accelerator Program in the class of 2021.

Fundraise Highlights

  • Total Round Size: US $1,250,000
  • Raise Description:  Seed
  • Minimum Investment:  US $1,000 per investor
  • Security Type:  Crowd Note
  • Valuation Cap:  US $5,000,000
  • Target Minimum Raise Amount:  US $500,000
  • Offering Type:   Side by Side Offering

We build clean, accessible skin health products for all humans with sustainability and simplicity at the forefront of our mission.


We started Ernest Supplies as industry outsiders on a mission to redefine what clean, sustainable and inclusive skincare should be. We’ve applied fresh, creative thinking to address a number of issues in the traditional beauty marketplace:

Inclusivity and accessibility (our products are genderless, made for all skin tones and accessibly priced)

Sustainability (120 billion units of beauty packaging go to landfills every year; we were one of the first to use eco, spouted pouches and plan to reduce the plastic we sell by 80% by 2022)

Lack of transparency (we were clean before it was cool; the next phase of clean is validating claims and certifying ingredients and safety)

Simple Personalization ("one-size-fits-all" in skincare leaves people underserved or not served at all; we make it easy to build a simple, custom routine)

We think this outsider thinking has caught the attention of industry insiders and helped Ernest Supplies gain momentum:

  1. We were one of the first brands to innovate and prioritize sustainable packaging, clean formulation tech and make inclusivity and accessibility a key focus
  2. We’ve had millions of unpaid editorial and social impressions from top editors and influencers and developed relationships with some of the best retailers in the world - both premium and mass
  3. We believe our brand has been validated with product and packaging awards
  4. We have customers who love us - our repeat customer rate was 53% in H2 2020 and we were a “fan favorite” at Birchbox and named “most popular” at GQ

We have plans to take our mission-driven approach to the next level while maintaining a laser-sharp focus on our values and profitability - we aim to do both with product gross margins above 80%.

Our vision of a modern, sustainable, inclusive skincare brand has never been more relevant than it is today. We’ve built a strong foundation and are ready to scale!

Media Mentions

The Team

Founders and Officers

John Cafarelli

Co-Founder, President

Experience:

John brings diverse creative, operations, finance, brand building and beauty industry experience to the team. His professional experience includes: Consumer Private Equity (Principal), Paper Magazine (COO/CFO), BeautyMatter (Managing Director), Beauty/Fashion Industry Consultant, LGBTQ+ Community Leader, AMFAR (National Chairman, GenCure)


Roles:

Sales, Marketing, Account Management, Product Development / Design, Finance / Accounting, Inventory Management / Filling, Shipping / EDI / Fulfillment, Operations / Insurance / Supply Chain

Interests:

Volleyball, Photography, Traveling, Podcasts, Skincare Products (of course)

John Cafarelli

Co-Founder, President

Experience:

John brings diverse creative, operations, finance, brand building and beauty industry experience to the team. His professional experience includes: Consumer Private Equity (Principal), Paper Magazine (COO/CFO), BeautyMatter (Managing Director), Beauty/Fashion Industry Consultant, LGBTQ+ Community Leader, AMFAR (National Chairman, GenCure)


Roles:

Sales, Marketing, Account Management, Product Development / Design, Finance / Accounting, Inventory Management / Filling, Shipping / EDI / Fulfillment, Operations / Insurance / Supply Chain

Interests:

Volleyball, Photography, Traveling, Podcasts, Skincare Products (of course)

Luigi Bianco

Co-Founder, Vice President

Experience:

Luigi brings an eye for design, attention to detail (he’s a lawyer) and fashion and beauty experience to the team. His professional experience includes: Transactional Lawyer (Contracts, IP, Property), Beauty/Fashion Industry Consultant, E-Commerce Consultant

Roles:

Sales, Marketing, Brand / Product Development, Operations / Logistics, Amazon Account Management, Sales Account Management, Legal / Regulatory

Interests:

Architecture, Design, Cooking, Foosball, Traveling, Skincare

Luigi Bianco

Co-Founder, Vice President

Experience:

Luigi brings an eye for design, attention to detail (he’s a lawyer) and fashion and beauty experience to the team. His professional experience includes: Transactional Lawyer (Contracts, IP, Property), Beauty/Fashion Industry Consultant, E-Commerce Consultant

Roles:

Sales, Marketing, Brand / Product Development, Operations / Logistics, Amazon Account Management, Sales Account Management, Legal / Regulatory

Interests:

Architecture, Design, Cooking, Foosball, Traveling, Skincare

Notable Advisors & Investors

Kelly Kovack

Advisor, CEO of BeautyMatter

Term Sheet

A Side by Side offering refers to a deal that is raising capital under two offering types. Investments made through the SeedInvest platform are offered via Regulation CF and subject to investment limitations further described in the Form C and/or subscription documents. Investments made outside of the SeedInvest platform are offered via Regulation D and requires one to be a verified accredited investor in order to be eligible to invest.

Fundraising Description

  • Round type:
    Seed

  • Round size:
    US $1,250,000

  • Minimum investment:
    US $1,000

  • Target Minimum:
    US $500,000
  • Key Terms

  • Security Type:
    Crowd Note

  • Conversion discount:
    20.0%

  • Valuation Cap:
    US $5,000,000

  • Interest rate:
    2.0%

  • Note term:
    24 months
  • Additional Terms

  • Custody of shares:

    Investors who invest less than $50,000 will have their securities held in trust with a Custodian that will serve as a single shareholder of record. These investors will be subject to the Custodian’s Account Agreement, including the electronic delivery of all required information. 


  • Closing conditions:
    While Ernest Supplies has set an overall target minimum of US $500,000 for the round, Ernest Supplies must raise at least US $25,000 of that amount through the Regulation CF portion of their raise before being able to conduct a close on any investments made via Regulation CF. For further information please refer to Ernest Supplies's Form C.

  • Regulation CF cap:
    While Ernest Supplies is offering up to US $1,250,000 worth of securities in its Seed, only up to US $1,070,000 of that amount may be raised through Regulation CF.

  • Transfer restrictions:
    Securities issued through Regulation CF have a one year restriction on transfer from the date of purchase (except to certain qualified parties as specified under Section 4(a)(6) of the Securities Act of 1933), after which they become freely transferable. While securities issued through Regulation D are similarly considered "restricted securities" and investors must hold their securities indefinitely unless they are registered with the SEC and qualified by state authorities, or an exemption from such registration and qualification requirements is available.

  • Use of Proceeds

    Investor Perks

    Reservation Bonus Perks: Investors that reserve shares and later purchase those reserved shares by Friday, May 21st at 11:59pm will receive a bump up to the next perk tier. For example, a reservation of $2,500-$4,999 that converts to an investment will earn perks for the $5,000 - $9,999 tier.

    Tier 1: Investors who commit $2,500 or more before May 28th at 11:59pm will receive a gift card for a bottle of our award-winning Protective Matte Moisturizer and 360 Protective Eye Serum.

    Tier 2: Investors who commit $5,000 or more before May 28th at 11:59pm will receive Tier 1 perks and become “Friends and Family” for life (or as long as we own the brand) and receive a code for 30% off all purchases from our website.

    Tier 3: Investors who commit $10,000 or more before May 28th at 11:59pm will receive all prior perks and become members of our “Clean Committee,” which will give you free trials and early access to all new product launches.

    Tier 4: Investors who commit $50,000 or more before May 28th at 11:59pm will receive all prior perks and get a personal “thank you” call from our team to chat about anything and everything related to our brand, the industry, entrepreneurship, life - whatever - on a 30 minute call.

    Tier 5: Investors who commit $100,000 or more before May 28th at 11:59pm will receive all prior perks and get to hang with the team at a virtual lunch or dinner or, if you’re in NYC, LA or London, we can do it in person (when it’s safe to do so)!

    *All investors at all levels will receive the total gratitude of our team for allowing us the opportunity to take this brand we’ve built to new heights!
    *All perks are non-transferable

    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 note that due to share price calculations, some final investment amounts may be rounded down to the nearest whole share - these will still qualify for the designated perk tier. Additionally, investors must complete the online process and receive an initial email confirmation by the deadline stated above in order to be eligible for perks.

    Market Landscape

    Global Natural  and Organic Personal Care Market (Compound Annual Growth of 9.5%)


    We believe Ernest Supplies is positioned to take advantage of the intersection of personal care and wellness, and the projected growth in clean and sustainable beauty.

    • By 2025, the global natural and organic personal care market is expected to nearly double to $25 billion, a compound annual growth rate of 9.5%
    • Personal care, skincare and beauty has grown to become the largest portion (25%) of the $4.2 trillion global wellness industry
    • Vegan beauty is expected to grow to $21 billion by 2025, from $13 billion in 2017

    We are a people-centric brand that takes the lead from unmet needs in the existing beauty marketplace.

    • 67% of beauty customers are searching for environmentally friendly packaging and will pay more for it (supports our sustainability)
    • 70% of millennials are seeking out cleaner, natural product alternatives (supports our clean transparency push)
    • 90% of mass beauty customers want to use clean beauty products but feel they’re out of reach because they’re too expensive (supports our accessible pricing model)
    • 66% of Gen Z beauty customers have used or are interested in gender-neutral beauty products (supports our inclusive design)

    We believe there are strong market dynamics in place, and 2020 was a banner year for beauty & wellness M&A and investment activity, with over 200 deals closed across the industry. According to Intrepid's Beauty Care M&A Report: 

    • Valuations for public companies grew to pre-COVID levels in Q4 2020, driven by interest in the industry and brand innovation focused on consumer-driven trends
    • Deal activity led by private equity / VCs, strategics and new entrants rolling up brands for digital growth

    At scale, we believe Ernest Supplies will be well positioned to benefit from industry trends, consumer preferences and investment and M&A interest that has driven record valuations in the industry.

    Risks and Disclosures

    The development and commercialization of the Company’s products and services are highly competitive. It faces competition with respect to any products and services that it may seek to develop or commercialize in the future. Its competitors include major companies worldwide. The personal care market is an emerging industry where new competitors are entering the market frequently. Many of the Company’s competitors have significantly greater financial, technical and human resources and may have superior expertise in research and development and marketing approved services and thus may be better equipped than the Company to develop and commercialize services. These competitors also compete with the Company 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, the Company’s competitors may commercialize products more rapidly or effectively than the Company is able to, which would adversely affect its competitive position, the likelihood that its services will achieve initial market acceptance and its ability to generate meaningful additional revenues from its products and services.

    Product safety and quality concerns, including concerns related to perceived quality of ingredients, or product recalls could negatively affect the Company’s business. The Company’s success depends in large part on its ability to maintain consumer confidence in the safety and quality of all its products. The Company has rigorous product safety and quality standards. However, if products taken to market are, or become, contaminated or adulterated, the Company may be required to conduct costly product recalls and may become subject to product liability claims and negative publicity, which would cause its business to suffer. In addition, regulatory actions, activities by nongovernmental organizations and public debate, and concerns about perceived negative safety and quality consequences of certain ingredients in its products may erode consumers’ confidence in the safety and quality issues, whether or not justified, and could result in additional governmental regulations concerning the marketing and labeling of the Company’s products, negative publicity, or actual or threatened legal actions, all of which could damage the reputation of the Company’s products and may reduce demand for the Company’s products.

    A product recall or an adverse result in litigation could have an adverse effect on the Company's business. The adverse effect depends  on the costs of the recall, the destruction of product inventory, competitive reaction, and consumer attitudes. Even if a product liability claim is unsuccessful or without merit, the negative publicity surrounding such assertions could adversely affect their reputation and brand image. The Company also could be adversely affected if consumers in their principal markets lose confidence in the safety and quality of their products.

    Maintaining, extending, and expanding the Company's reputation and brand image are essential to the Company's business success. The Company seeks to maintain, extend, and expand their brand image through marketing investments, including advertising and consumer promotions, and product innovation. Increasing attention on marketing could adversely affect the Company's brand image. It could also lead to stricter regulations and greater scrutiny of marketing practices. Existing or increased legal or regulatory restrictions on the Company's advertising, consumer promotions and marketing, or their response to those restrictions, could limit their efforts to maintain, extend and expand their brands. Moreover, adverse publicity about regulatory or legal action against the Company could damage the Company's reputation and brand image, undermine their customers’ confidence and reduce long-term demand for their products, even if the regulatory or legal action is unfounded or not material to their operations.

    In addition, the Company's success in maintaining, extending, and expanding the Company's brand image depends on their ability to adapt to a rapidly changing media environment. The Company increasingly relies on social media and online dissemination of advertising campaigns. The growing use of social and digital media increases the speed and extent that information or misinformation and opinions can be shared. Negative posts or comments about the Company, their brands or their products on social or digital media, whether or not valid, could seriously damage their brand and reputation. If the Company does not establish, maintain, extend and expand their brand image, then their product sales, financial condition and results of operations could be adversely affected.

    The Company may be unable to maintain, promote, and grow its brand through marketing and communications strategies. It may prove difficult for the Company to dramatically increase the number of customers that it serves or to establish itself as a well-known brand. Additionally, the product may be in a market where customers will not have brand loyalty.

    Failure by the Company's transportation providers to deliver their products on time or at all could result in lost sales. The Company currently relies upon third-party transportation providers for a significant portion of their product shipments. The Company utilization of delivery services for shipments is subject to risks, including increases in fuel prices, which would increase their shipping costs, employee strikes, and inclement weather, which may impact the ability of providers to provide delivery services that adequately meet their shipping needs. The Company may, from time to time, change third-party transportation providers, and the Company could therefore face logistical difficulties that could adversely affect deliveries. The Company may not be able to obtain terms as favorable as those they receive from the third-party transportation providers that they currently use or may incur additional costs, which in turn would increase their costs and thereby adversely affect their operating results

    The Company’s expenses will significantly increase as they seek to execute their current business model. Although the Company estimates that it has enough cash and inventory runway for 1-2 months, they will be ramping up cash burn to promote revenue growth, further develop R&D, and fund other Company operations after the raise. Doing so could require significant effort and expense or may not be feasible.

    The Company’s cash position is relatively weak. The Company currently has approximately 1-2 month(s) of runway in cash balances as of March 31, 2021. The Company believes that it is able to continue extracting cash from sales of inventory and income from accounts receivable to extend its runway. The Company could be harmed if it is unable to meet its cash demands, and the Company may not be able to continue operations if they are not able to raise additional funds.

    The Company projects aggressive growth. If these assumptions are wrong and the projections regarding market penetration are too aggressive, then the financial forecast may overstate the Company's overall viability. In addition, the forward-looking statements are only predictions. The Company has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that it believes may affect its business, financial condition and results of operations. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

    Not all of the founders or key employees are currently working full time for the Company. As a result, certain of the Company's employees, officers, directors or consultants may not devote all of their time to the business, and may from time to time serve as employees, officers, directors, and consultants of other companies. These other companies may have interests in conflict with the Company. 

    The Company does not have employment contracts in place with its key employees. Employment agreements typically provide protections to the Company in the event of the employee’s departure, specifically addressing who is entitled to any intellectual property created or developed by those employees in the course of their employment and covering topics such as non-competition and non-solicitation. As a result, if key employees were to leave the Company, the Company might not have any ability to prevent their direct competition, or have any legal right to intellectual property created during their employment. There is no guarantee that an employment agreement will be entered into.

    The Company does not hold regular board or managing member meetings. Although the Company is not legally required to conduct regular board meetings, holding these regular meetings can play a critical role in effective management and risk oversight. Regular board meetings can help ensure that management’s actions are consistent with corporate strategy, reflective of the culture of the business, and in line with the organization’s risk tolerance. There is no guarantee that the Company will hold regular board meetings in the future. The Company has confirmed that they do have board resolutions supporting all major decisions.

    The Company’s Board does not keep meeting minutes from its board or managing member meetings. Though the Company is a New York Limited Liability Company and New York does not legally require its companies to record and retain meeting minutes, the practice of keeping board minutes is critical to maintaining good governance. Minutes of meetings provide a record of corporate actions, including director and officer appointments and board consents for issuances, and can be helpful in the event of an audit or lawsuit. These record-keeping practices can also help to reduce the risk of potential liability due to failure to observe corporate formalities, and the failure to do so could negatively impact certain processes, including but not limited to the due diligence process with potential investors or acquirers. There is no guarantee that the Company’s managing members will begin keeping board meeting minutes.

    The Company has an outstanding EIDL loan that is secured debt. The Company has approximately $65,300 in secured debt due to this EIDL loan as of March 31, 2021. In May 2020, the Company entered into a loan agreement with the U.S. Small Business Association for a COVID-19 Economic Injury Disaster Loan (EIDL) with a principal amount of $65,000. Interest accrues at the rate of 3.75% per annum. Installment payments, including principal and interest, now begin 24 months from the loan date and the loan matures 30 years from the loan date. This may require the Company to dedicate a substantial portion of its cash flow from operations or the capital raise to pay principal of, and interest on, indebtedness, thereby reducing the availability of cash flow to fund working capital, capital expenditures, or other general corporate purposes, or to carry out other business strategies. The Loan is guaranteed by the company assets. In addition, the terms of the Loan clarify that upon any event of default, the Lender may declare all or any portion of the Loan to be immediately due and payable. One of the Events of Default, as defined in that agreement is a general inability to pay its debts. The Loan is secured with a continuing security interest in all the Company’s assets.

    The Company has not prepared any audited financial statements. Therefore, investors have no audited financial information regarding the Company’s capitalization or assets or liabilities on which to make investment decisions. If investors feel the information provided is insufficient, then they should not invest in the Company.

    The reviewing CPA has included a “going concern” in the reviewed financial statements. As discussed in the accompanying financial statements, the Company has a certain operating income, operating cash flow loss and liquid assets in cash of less than a year worth of cash reserves. The Company’s situation raises a doubt on whether the entity can continue as a going concern in the next twelve months. The Company’s ability to continue as a going concern in the next twelve months following the date the financial statements were available to be issued is dependent upon its ability to produce revenues and/or obtain financing sufficient to meet current and future obligations and deploy such to produce profitable operating results. Management has evaluated these conditions and plans to generate revenues and raise capital as needed to satisfy its capital needs. During the next twelve months, the Company intends to fund its operations through debt and/or equity financing. There are no assurances that management will be able to raise capital on terms acceptable to the Company. If it is unable to obtain sufficient amounts of additional capital, it may be required to reduce the scope of its planned development, which could harm its business, financial condition, and operating results. The accompanying financial statements do not include any adjustments that might result from these uncertainties.

    The outbreak of the novel coronavirus, COVID-19, has adversely impacted global commercial activity and contributed to significant declines and volatility in financial markets. The coronavirus pandemic and government responses are creating disruption in global supply chains and adversely impacting many industries. The outbreak could have a continued material adverse impact on economic and market conditions and trigger a period of global economic slowdown. The rapid development and fluidity of this situation precludes any prediction as to the ultimate material adverse impact of the novel coronavirus. Nevertheless, the novel coronavirus presents material uncertainty and risk with respect to the Funds, their performance, and their financial results.

    General Risks and Disclosures

    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 theseshares 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 \u2014 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.

    Ernest Supplies's Form C

    The Form C is a document the company must file with the Securities and Exchange Commission, 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.

    Download Ernest Supplies's  Form C

    Frequently Asked Questions

    About Side by Side Offerings
    What is Side by Side?

    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.


    What is a Form C?

    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.


    What is Rule 506(c) under Regulation D?

    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.


    What is Reg CF?

    Title III of the JOBS Act outlines Reg CF, a type of offering allowing private companies to raise up to $5 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 securities, typically equity, in the startups they back. To learn more about Reg CF and other offering types check out our blog and academy.


    Making an Investment in Ernest Supplies
    How does investing work?

    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 Ernest Supplies. Once Ernest Supplies accepts your investment, and certain regulatory procedures are completed, your money will be transferred from the escrow account to Ernest Supplies in exchange for your securities. At that point, you will be a proud owner in Ernest Supplies.


    What will I need to complete my investment?

    To make an investment, you will need the following information readily available:

    1. Personal information such as your current address and phone number
    2. Employment and employer information
    3. Net worth and income information
    4. Your accredited investor status
    5. Social Security Number or passport
    6. ABA bank routing number and checking account number (typically found on a personal check or bank statement) or debit card information, unless paying via a Wire transfer.

    How much can I invest?

    Non-accredited investors are limited in the amount that he or she may invest in a Reg CF offering during any rolling 12-month period:

    • If either the annual income or the net worth of the investor is less than $107,000, the investor is limited to the greater of $2,200 or 5% of the greater of his or her annual income or net worth.
    • If the annual income and net worth of the investor are both greater than $107,000, the investor is limited to 10% of the greater of his or her annual income or net worth, to a maximum of $107,000.

    Separately, Ernest Supplies has set a minimum investment amount of US $1,000.

    Accredited investors do not have any investment limits.


    After My Investment
    What is my ongoing relationship with the Issuer?

    You are a partial owner of the company, you do own securities 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:

    1. The company becomes a fully-reporting registrant with the SEC
    2. The company has filed at least one annual report, but has no more than 300 shareholders of record
    3. The company has filed at least three annual reports, and has no more than $10 million in assets
    4. The company or another party purchases or repurchases all the securities sold in reliance on Section 4(a)(6)
    5. 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.


    How can I sell my securities in the future?

    Currently there is no market or liquidity for these securities. Right now Ernest Supplies does not plan to list these securities on a national exchange or another secondary market. At some point Ernest Supplies 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 Ernest Supplies either lists their securities on an exchange, is acquired, or goes bankrupt.


    How do I keep track of this investment?

    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.


    Other General Questions
    What is this page about?

    This is Ernest Supplies'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 Ernest Supplies's Form C. The Form C includes important details about Ernest Supplies's fundraise that you should review before investing.


    How can I (or the company) cancel my investment under Regulation CF?

    For offerings made under Regulation CF, you may cancel your investment at any time up to 48 hours prior to the offering end date or an earlier date set by the company. You will be sent a notification at least five business days prior to a closing that is set to occur earlier than the original stated end date giving you an opportunity to cancel your investment if you have 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 securities 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 account's portfolio page by clicking your profile icon in the top right corner.


    What if I change my mind about investing?

    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 securities 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 account's portfolio page by clicking your profile icon in the top right corner.