Wait, are we all accredited now??

Republic goes to Dubai, comes back with a friend

I had a whole startup investment review typed out for this week, and then the industry erupted with news…

Here’s what you can expect in today’s edition:

• ⛳️ Hit the Links: Top links for startup investing

• 🥩 Republic has a new Stake: It Republic moves into the Middle East

• 📜 HR 2799: A potentially huge piece of legislation for startup investing

HIT THE LINKS

A round-up of this week’s best links for startup investing:

• 👋 Whoopi Goldberg apparently invests on Wefunder, like kind of a lot…(LINK)

• 👮 How one journalist ended up in a prison jumpsuit for exposing a sketchy startup founder (LINK)

• ❓ Why founders will accept an investment with unfavorable liquidation preference (LINK)

• 🙃 In 2018, FanDuel was acquired for half a billion dollars. The founders likely ended up with nothing (LINK)

• 🤑 I will look real stupid if this doesn’t pan out…but here is my most controversial investment take (LINK)

REPUBLIC HAS A NEW STAKE

Republic makes a play in the Middle East

Last week, Republic announced a strategic partnership with Stake - an online investment platform for real estate based out of Dubai.

Details on the partnership are sparse, but Republic hinted that Stake’s Middle East real estate deals may soon be available to Republic users.

We do not yet have details if this is purely a strategic partnership, or if Republic invested in Stake as part of the deal.

In my opinion, this feels like another example of Republic taking their eye off the ball.

They got caught up in the metaverse frenzy, raising many millions for their diversified portfolio of real-estate NFTs - only to abandon the project and refund all investors.

They then plowed money and resources into Republic Note, their profit-sharing token. It’s alienated non-crypto startup investors and has since plummeted in value, falling to $0.12 per note at the time of writing.

Amid this, Republic’s core startup investing platform has fallen out of the top two (possibly 3) investment portals. It’s become less competitive against StartEngine + Wefunder, and investment volume on the platform continues to fall.

I’m not confident there will be ample investor demand for Middle-East real estate. To me this seems like another distraction when the company should be working to breathe life into its core offering.

WHAT TO KNOW ABOUT HR 2799

Twitter/X erupted last week about HR 2799. It’s overblown.

HR 2799 - a piece of legislation that would make sweeping changes to startup investing - passed its vote in the House last week.

The bill would allow all citizens to become accredited investors, so long as their investments don’t exceed 10% of their income or net worth.

Accreditation status was meant to prevent ‘uninformed’ citizens from participating in risky investment deals. Currently, citizens need to meet income/net worth requirements to become an accredited investor in most cases.

Accredited investors have access to private investments beyond Regulation Crowdfunding deals, and are not subject to investment maximums.

HR 2799 passed the House, but the bill is pretty much DOA - dead on arrival. You see, the House voted strictly on party lines. The Republican majority supported the bill, while not a single Democrat voted in favor.

When the bill moves to the Democrat-controlled Senate, it will be a longshot to get passed.

Even if it manages to get through, a veto from Democratic president Joe Biden likely awaits the bill.

So would this bill have outsized effects on startup investing? Certainly.

Will it ever see the light of day? Probably not.