I lost it all.

NEW STARTUPS

Startups that you can invest in with as little as $100 right now:

✝️ The Catholic Herald - The world’s oldest Catholic publication (LINK)

🌹 Alpha Rose - Personalized medicines for children (LINK)

🟩 Swopblock - Autonomous trading platform for crypto (LINK)

CLOCKWORK WINDS DOWN ROBOTIC MANICURES

One of the more-promising startups in my portfolio was Clockwork Nails - a company that created a standalone machine that could paint fingernails in less than ten minutes for dirt cheap.

Last Thursday evening, an email popped into my inbox titled ‘A New Chapter for Clockwork’.

A small wave of excitement crept over me - I hadn’t been 100% keyed into the business’ progress, but there were several indicators that this one was taking off.

Could they have been acquired? In their crowdfunding raise, they mentioned that they were in advanced talks with Target… maybe that came to life?

Well, it turns out that the ‘next chapter’ was the epilogue because Clockwork’s story is over.

CEO Renuka Apte announced that the final day of operation would be on February 11th.

WHAT HAPPENED TO CLOCKWORK NAILS??

Simply put, the company ran out of money. 

In 2024, revenues tripled to $740,000 and there we 96 robots in contract (which would have been $3M in ARR).

Margins were healthy, Clockwork was bringing in 73% in gross profit. Despite this, they weren’t able to generate enough gross profit to outweigh the fixed costs of salaries, rent, manufacturing, etc.

Renuka mentioned that after a reduction in their workforce they were able to bring the company to just below breakeven. 

However, their current machine was not built for large-scale deployment, and they no longer had the team to build the next-gen model.

Fundraising was their only option, and they were unsuccessful in this regard.

Investors were informed that the business was selling itself to rival 10Beauty, and that the sale would not yield any return to investors.  

CLOCKWORK RESULTS IN TOTAL LOSS FOR INVESTORS

Clockwork raked it in from their community. After launching a Wefunder campaign in October of 2023, a total of $2,071,830 rolled in from 1,742 investors. 

The company was well capitalized - they had over $1.5M cash on hand before the crowdfunding round began.

I wrote favorably about Clockwork after interviewing the founder and seeing the potential roadmap for success. I also put my money where my mouth was and invested $500 into the business.

For me and the other 1,741 retail investors, our investment in Clockwork is now worth nothing.

Luckily this was a smaller investment for me vs my average check size across my portfolio ($1,650).

It does still sting - this one felt like it had serious potential and the closure seems somewhat outside their control.

If Clockwork was successful in fundraising maybe they would have been able to turn the corner and reach their true potential. The demand was certainly there, at least from people who wanted to franchise a machine.

My previous Clockwork article got over 10,000 hits from people searching variations of ‘Clockwork Nail Machine Franchise’ (and gets 100+ each day).

CLOSING THOUGHTS ON CLOCKWORK NAILS

Building a successful startup is often times the result of thousands of small decisions & outcomes. In this case, it was the outcome of just one.

10Beauty, the rival that Clockwork will be folded into, raised $38M in a Series A during February of 2024. Had Clockwork beaten them out for that investment, things could be very different from where we are today.

10Beauty’s Series A announcement was less than 120 days after my investment in Clockwork.

In hot industries, multiple startups can receive funding because investors have FOMO about missing the big wave that everyone is talking about.

Rideshare was it for a while (Uber, Lyft, Gett, Curb, Didi).

Right now it’s AI (OpenAI, Perplexity, xAI, Anthropic).

But for less ‘sexy’ industries, there might only be one company that gets funded. And when that company gets funded, it can scare off investors from investing in their competitors.

Why would any VC invest in Clockwork when their main competition just got handed many millions of dollars to beat them?

The timing was certainly tough, there was no way I or the other retail investors could have known that Clockwork’s rival was about to be handed a war chest of funds.

Still, I’ve built up a portfolio for this very reason. The future is wildly unpredictable, and many seasoned investors will tell you that their most successful investments are the ones they least expected (and vice-versa!)

The last thing I’ll add, is that MAN I should have listened to my readers. At the end of my 1st Clockwork article, I listed a poll asking readers if they agreed that Clockwork was a good investment.

The outcome of that poll:

Yes, I would invest: 46.43%

No I would not invest: 53.57%