November 7, 2013
By Jill W. Tallman
After a busy year that saw its prototype roadable aircraft fly before thousands at EAA AirVenture, Terrafugia has partnered with a crowdfunding website to raise money.
Terrafugia is one of the newest startups on Wefunder, a website that features new companies in need of financing. The company’s profile on the website says it has raised $10,420,700—but $10 million of that is from investors who have come on board since Terrafugia was founded in 2007. A capital infusion “will go directly towards getting the Transition to market,” according to the website. “We expect this infusion will enable Terrafugia to complete the design of our third prototype,” the company said on its Wefunder profile.
Unlike Kickstarter, a popular crowdfunding site that highlights creative projects in need of financial support, Wefunder works with startups. Under current rules that govern the sale of securities to individuals, Wefunder currently accepts “accredited investors,” which it defines as those who earn more than $200,000 per year or have more than $1 million in assets. However, the Jumpstart Our Business Startups Act signed into law in April permits anyone to invest at least $2,000 in startups, Wefunder said. The Securities and Exchange Commission has published proposed regulations outlining rules for equity crowdfunding, Bloomberg reported on Oct. 24.
The Wefunder site counsels potential investors to “know what you are getting into,” noting that “There’s a risk that FAA regulations will delay the launch of the Transition until the company is bled dry of capital,” and adds, “There’s also no guarantee the Transition will be sold at enough volume for the company to be successful.” Still, a report on CarTalk.com says Wefunder founder Nick Tommarello called Terrafugia “the most popular company” on the website, and says it “definitely has the most interest, though much of it is coming from unaccredited investors."
It didn’t do loops, rolls, or anything remotely aerobatic—but the Terrafugia Transition wowed afternoon airshow spectators at EAA AirVenture on July 29.
The next stop is Putrajaya, Malaysia, on May 17 and 18 for the 2014 Red Bill Air Race World Championship, following an “electrifying” contest in Rovinj, Croatia.
The movement to exempt thousands of general aviation pilots from the third class medical certification process is gaining momentum in Congress and the aviation community.
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