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7 Best Startups To Invest in on StartEngine

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Prior to this awful pandemic, many financial analysts expressed concerns that the current and younger generations were falling behind older demographics in terms of wealth-building activities. However, certain historical factors, such as millennials coming of age during periods of volatility and recessions, have prevented them from engaging the stock market. The shift toward equity crowdfunding legalization, however, has provided many folks, including younger Americans, an incentive to invest in startups.

First, we’ve all heard about the slow-and-steady approach to building your portfolio. Time and the “magic” of compounding interest can do wonders for wealth generation. At the same time, many of the names that people put into their portfolio comprise of blue chips. But by considering startups to invest in, the companies themselves are young. Therefore, due to the law of small numbers, the growth potential of private equity names, such as StartEngine offerings, can be explosive.

Second, by the time companies have launched their initial public offerings, the investment case has been fully fleshed out. You might think you’re getting early into the game by buying a stock straight out of its market debut. But that target firm may have enjoyed multiple rounds of private equity offerings. In other words, if you invest in startups, you’re truly getting in on the ground floor.

Third, established publicly traded blue chips have multiple concerns to address before engaging particular business strategies. Primarily, the need to keep stakeholders happy sometimes prevents organizations from taking necessary risks. However, the reason why people are considering startups to invest in is that smaller companies tend to be built around concepts, with the idea that early stakeholders will be rewarded once that concept goes public.

In a way, it’s a contrarian approach to conventional investing principles. Given that up until a few years ago private equity was limited to a select few investors, the ability for anyone to invest in startups has strong appeal. However, you should be aware that green companies have substantial risks.

In my detailed examination of single private equity offers, I consistently mention that 90% of startups fail. That’s just a fact that impacts the entire startup industry. Yes, your job is to find the 10% that won’t fail. But please don’t misconstrue the risk-reward profile: the chances of you finding that 10% are not favorable.

This leads to another risk factor, the lack of information. With blue chips, everybody and their dog has analyzed the ins and outs of their investment narrative. When it comes to startups to invest in, you’ll be at a disadvantage; simply, you won’t have the library of information to rely upon. Thus, it’s incumbent upon you to look past the private equity offer’s marketing glitz – though attractive as they might be – and perform your due diligence.

Finally, don’t be afraid to ask questions of company executives. It’s your money so you have every right to know (within reason) how it’s going to be spent.

Despite the risks, if you really want to achieve outstanding gains, there are few actions more lucrative than to invest in startups. Here are seven StartEngine offerings for your consideration.

Rayton

Close-up electronic circuit board. technology style concept. representing semiconductor stocks

Semiconductors have always been relevant as the backbone of our digitalization technologies. However, as the Internet of Things begins to encompass nearly every aspect of our lives, the demands on semiconductors have never been more intense. Today, the silicon wafer structure underlining computer processers must be lightweight yet robust. Existing solutions exist, though they are incredibly expensive. And that’s where Rayton, one of the most compelling startups to invest in, comes into focus.

Located in Van Nuys, California, Rayton specializes in its patented particle accelerator technology. According to its StartEngine.com profile, a standard silicon wafer has a thickness of 200 microns. However, Rayton’s wafers are only two microns thick, leading to considerable flexibility across multiple applications. Better yet, Rayton offers the capacity necessary to power today’s intense computing demands.

Further, the company offers considerable cost savings because its wafer production processes reduce waste by up to 50%. This should have serious implications considering our current geopolitical tensions. Depending on how this plays out, demand for homegrown technologies will greatly increase, making Rayton one of the StartEngine offerings to watch closely.

Solutions Vending International

Businessman in suit and aviator hat flying on rocket. invest in startups

One of my favorite local pizzerias is a cash-only business. Certainly, it attracts a big crowd every day because of its unparalleled quality. However, this transaction model is increasingly going out of style. Current studies indicate that 65% of customers prefer self-service kiosks. Additionally, by 2023, “Research and Markets expects the automated kiosk segment’s worth to balloon to $34 billion.”

But here’s the problem: although the machines do a wonderful job of processing your order, they’re dumb as bricks regarding data accumulation. Therefore, kiosk operators have no way of attaining customer demographics information for targeted marketing. But one of the best reasons to invest in startups is the wealth of brilliant solutions. And one major player in the smart kiosk market is Solutions Vending International.

Billed as the provider of “big data for the next generation of retailers,” Solutions Vending doesn’t just offer transaction processing. Instead, its automated kiosks collect customer data, enabling retailers to better understand the impact of their marketing campaigns. As well, its smart kiosks offer live reports and alerts, such as inventory gauges. This way, retailers can atop their business.

Also, one of the most interesting aspects of Solutions Vending International is that they may break into the virtually untapped regulated retail economy. Thanks to its consumer data integration, it’s now possible for smart kiosks to transact regulated products such as alcohol and jurisdictionally legal cannabis.

Certainly, with contactless platforms becoming a major issue, Solutions Vending represents a key reason why speculators should invest in startups.

R3 Printing

a scientist uses a 3D printer to make an orange golf ball

Some products lend themselves to universal production. Others, such as the broader apparel market, do not. For instance, making dress shirts segmented into small, medium and large sizes is not nearly enough to accommodate different body types. Then, you factor in characteristics such as race/ethnicity and apparel manufacturers find themselves in a battle of compromises.

Yes, technically, manufacturers have the capacity to custom size a product. But doing so comes at such a high cost that it becomes uneconomical. That is until R3 Printing came into the picture. R3 Printing specializes in developing high-performance 3D printers “for manufacturing custom 3D-printed products at prices that can compete with mass production.”

To be clear, this is not your typical 3D printer, which badly floundered for various reasons. Instead, R3 Printing specializes in additive manufacturing capacities for enterprises. As well, R3 doesn’t just have implications for the apparel industry. For instance, mass-produced earbuds aren’t always effective because not everyone has the same ear structure.

In earlier paradigms, the solution was to develop custom-made earbuds, which of course were wildly expensive. Thanks to R3’s cost-saving mechanism, it’s now possible for enterprises to develop custom products on demand. It’s innovation like this that provides the incentive for people to invest in startups.

One note to keep in mind: R3 Printing is oversubscribed so you will need to be on a waitlist if you’re interested.

Rumble Motors

White chalk on pavement shows a plug-in electric vehicle.

As you know, electric vehicles are slowly but surely taking over the automotive paradigm. For one thing, EVs are more reliable – all other things being equal – due to requiring fewer moving parts. Not only does that save on maintenance, but you’ll also save on “fuel” costs. From the convenience perspective, many drivers (and passengers) love the almost noiseless experience of EVs.

But that’s precisely the reason why electric bikes or motorcycles have never caught on. Yes, all the convenience factors and cost savings apply to this electric platform. However, the problem is that bikers need their machines to emit noise for safety reasons. With so many distractions on the road, drivers can often miss bikers. Fortunately, these consumers have a new choice with Rumble Motors.

As the name implies, Rumble Motors develops electric bikes but with integrated combustion-engine sounds. Now, riders can enjoy their day on the open road and let other drivers know about their presence. Plus, the riding experience just isn’t the same without the rattle and roar of a combustion engine.

And in my opinion, these e-bikes are gorgeous and appeal to tough guys that call other guys that aren’t as tough as them “soy boys.” This marriage of technology and consumer desires represents a pivotal reason why you should invest in startups.

Solectrac

a tractor cultivating a farm from an aerial view

Obviously, one of the biggest reasons why people invest in startups related to EVs is their positive environmental impact. Yes, the process of making EVs emit waste. But the vehicles themselves are zero emission, promoting net positive outcomes for the environment. Currently, battery and hybrid electric vehicles represent a small portion of the global automotive market. However, adoption of electrical energy across various motorized platforms can help accelerate environmental positivity.

And that’s where Solectrac comes into play. Here, Solectrac focuses on replacing diesel-fueled tractors with much more efficient electric motors. As part of an energy network of solar panel systems, Solectrac tractors can generate incredible cost savings for the agricultural industry. Not only that, these e-tractors offer considerable operational advantages.

First, the electric platform is silent, which helps promote positive health outcomes for operators. Additionally, it’s easier for them to take note of warning signals. Second, electric motors require far fewer parts. That means less maintenance is involved, leading to cost savings in addition to more time dedicated to generating revenue.

Finally, Solectrac has produced the world’s first zero-emission under-40 horsepower tractors. This gives the company a clear advantage in what should be a burgeoning global market.

Z0cal

a rack of ice cream cones. invest in startups

Due to the food supply chain disruption that the pandemic imposed, many consumers turned to alternative offerings. Among the biggest changes was the shift toward plant-based meat. This is significant not only for the health consideration but also that millennials are more concerned about environmental sustainability than older generations. So far, though, most of the attention is paid toward replacing the animal-based meat market. What about other food products, such as desserts?

That’s where Z0cal enters the stage. Seeking to overturn the myth that eating desserts have to be a compromising affair, Z0cal specializes in ultra-low calorie ice cream with limited amounts of carbs and sugars. Based on the innovations of founder Dr. Jareer Abu-Ali, an award-winning food scientist, Z0cal seeks to remove the negative health implications of desserts.

This is one of the more interesting startups to invest in because of our food addiction. While multiple educational efforts have been implemented to get kids to eat healthier, they’re just not gaining enough momentum. Frankly, humans are humans and they will indulge. Thus, Z0cal’s products don’t fight the tape. Instead, they offer a healthier alternative.

Also, Z0cal provides plant-based dessert products, which should appeal to an international audience. Not only are diets not standard across the globe, some communities may be prone to conditions such as lactose intolerance. Thus, Z0cal represents one of the best reasons to invest in startups – bringing access to more people.

Shacksbury

A photo of a person pouring a beer from a tap.

Arguably most adults everywhere love a cold one to whittle away the hours after a tough day at work. Not surprisingly, though, the beverage of choice for alcoholic drinks has shifted over the years, particularly with millennials becoming the largest generation in the U.S. workforce. To this key demographic, it’s not just the alcohol they’re seeking but the overall enjoyment.

One of the biggest sales catalysts within this sector has been the rise of hard seltzers. However, millennials are also brand conscious. They don’t want just the same old seltzer and this is where Shacksbury has disruptive potential. A cidery based in the Champlain Valley of Vermont, Shacksbury specializes in low-sugar, low-calorie beverages that are high on quality and flavor.

Furthermore, Shacksbury’s core team comprises mostly of millennials, enabling the organization to understand exactly what young consumers are seeking. To that end, product design is one of Shacksbury’s strongest attributes, featuring dazzling colors and attractive design elements. It harkens to what other beverage companies have implemented to bring a new generation of customers to their products.

However, in my opinion, Shacksbury has that intangible verve that should appeal to its target demo.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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