Opt-In/Opt-Out Feature: Empowering Investors

One of the key aspects of Boxabl's upcoming offering is the inclusion of an opt-in/opt-out feature during the investment confirmation process. The SEC filing states the following, which can be interpreted in various ways:

This indicates that investors will have the option to either purchase or abstain from buying the shares being sold by insiders. If you have a different interpretation, I welcome your insights.

This is a significant advancement for the industry. By providing this choice, Boxabl ensures that investors are fully aware of where their funds are being allocated, allowing them to make informed decisions. It's unreasonable for investors to be forced to choose between supporting their investment and compensating a high-paid executive, or to opt out entirely.

Many investors are indifferent to executives selling shares, while others are strongly opposed. Enabling investors to truly determine the destination of their funds is monumental. If Boxabl reaches its funding limit and only the $5 million from insiders remains, investors can still partake, ensuring that all parties are well-informed.

Investment Threshold for Insiders

Interestingly, the details reveal an even more compelling narrative. Boxabl will not allow insiders to receive any funds from this round of financing until at least $15 million has been raised. Once this threshold is met, the opt-in option will become available:

Just having the choice to opt in is commendable, but this further demonstrates Boxabl's commitment to transparency and investor consideration, which I greatly admire. It’s noteworthy that Boxabl could have easily stated, "We are selling shares; it's your decision to invest," without showing any regard for investors—unlike some others who have acted without considering their investors' preferences. Instead, Boxabl has crafted a fair and transparent structure that prioritizes the company’s needs while ensuring investor satisfaction.

A Minimal Fraction of the Total Raise

It's essential to highlight that the $5 million being sold represents less than 1% of the overall amount being raised. According to Boxabl's co-founder, their current funding campaign aims to secure over $1 billion, meaning the $5 million corresponds to just 0.5% of the total. This is in stark contrast to StartEngine’s approach, where insiders claimed 50% of the raised funds.

Establishing a New Industry Standard

While I understand the rationale behind withdrawing funds, the trend of insiders selling shares is becoming alarming. Companies like Jet Token, which lacks revenue and has questionable practices, are selling shares at inflated prices, resembling more of a pump-and-dump scheme than a legitimate investment.

Moreover, smaller companies are also engaging in similar practices, which is risky at best. For instance, KingsCrowd plans to sell $2 million in stock, with $1 million coming from the CEO and the remainder from a venture capitalist, all while the company reports only $500,000 in revenue and significant losses. Why would the CEO choose this moment to cash out?

Additionally, StartEngine's decision to allocate half of its raised funds to insiders underscores a troubling trend that is only worsening. I commend Boxabl for their thoughtful and constructive approach, and I believe it sets an excellent precedent for the equity crowdfunding industry.

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