This story was first published on January 3, and the basic crux of the pitch has not changed with the latest salvo from Shah Gilani, he’s still pitching the same private deals, and the deals are essentially the same as they were a couple months ago. We’re re-posting this to answer questions, and the Irregulars will see a bit of an update in the Quick Take above ⬆ (what follows has NOT been updated).

Shah Gilani is pitching his Extreme Profit Hunters service ($1,750/yr, no refunds) with a familiar sort of idea… that investing in private, early-stage companies is the path to riches. Whether it’s big private equity and venture capital firms selling their institutional investors on the appeal of an investment that doesn’t get priced every day, or the many crowdfunding and crowd-vesting platforms trying to convince you that they can connect you with the hot kombucha startup that will turn your $1,000 into millions, we’re a nation of startup dreamers. Which is fine, as long as you can be honest with yourself about the probability that any of these startups will succeed… and allocate your investments accordingly.

These private funding deals are kind of like junior IPOs, a company is selling shares at a set price to raise money in an open offering… but they are private, so the shares that you’ll buy are not publicly traded. In our experience, most of these deals that are pitched to small investors are Reg A deals, which is just an SEC rule that lets smaller companies raise smallish amounts of money with much less onerous registration requirements than more mature companies. Here’s how Gilani puts it…

“When a company comes up on the Billionaire’s Reserve Market, you don’t have all the same information you get with the stock. You don’t have 20 years of earnings to review. So I don’t care what the company is. I don’t care what they make. I don’t care what industry they’re in. I have three simple boxes I need them to check. Number one: I need to see a functioning product. Two: That product has to solve a big problem in a growing market. And three: They need to have customers in place. That last point is key. The Reserve Market is risky. Small companies go under all the time, so I don’t wanna invest in a good idea. I don’t want a company that could change the world in 10 years if everything goes perfectly. I wanna get in at the two-yard line. I want my money to be the last little push it needs to potentially unlock billions of dollars in sales.”

In the ad, Gilani shows a video of himself sitting in a motorized wheelchair and controlling the actions of that chair with his head movements — turn your head left to turn left, etc. He says that the company which developed this control technology is going to revolutionize this industry, using a little earbud controller with gyroscopes to control a wheelchair… and moving on to also use that same technology to control robotic arms or heavy equipment, or move a cursor on a computer screen, or whatever. The argument is that these little earbuds, which measure head movement and changing microexpressions, are a much easier and cheaper way to provide this “magic” than the surgical neural implants that convert brainwaves into physical activity (as with the “competitor” that Gilani highlights, Neuralink)

OK, so that “earbud controlled wheelchair” company must be a little startup called Naqi Logix, and they are indeed trying to raise money from individual investors through a Reg. A Offering (the SEC filing is here) — they’re aiming to raise up to $10 million, at $2 per share, with a $1,500 minimum investment. According to the Kings Crowd system, they’re using Dalmore as their broker to raise this money, and they’re not exactly seeing the money fly in the door just yet — the offering has been live since July, and that page indicates they’ve only got commitments for about $400,000. That may not be accurate, I haven’t dug further. If you’re interested in delving further into this story, the basic technology is roughly as described by Shah Gilani, using head and facial motion and miniature gyroscopes in an earbud to steer a wheelchair or issue other commands to a computer — the guy behind the technology is Dave Segal, who gave a TEDx talk about the idea earlier this year, and their basic investment pitch is online here.

The company’s goal was to have the basic earbud available for commercial partners to evaluate at the end of the year. They don’t really issue press releases, and I haven’t seen any updates on that progress, but the ambitious goal was to be ready for some sort of commercial deal by the middle of next year. This stuff always takes much longer than anticipated, so I would assume that we won’t be seeing these earbud systems in the wheelchair/mobility market for at least a few years, but one never knows. Maybe they’ll get lucky and get a good partnership deal with a manufacturer who is eager to roll out the technology more quickly, and maybe the real world testing will be hugely successful and lead to a rapid launch and royalties for Naqi Logix. That’s about the most optimistic scenario I could imagine, and it’s also very easy to imagine them raising half of the $10 million they’re hoping for, spending it over the next year or two on product development (they’ve so far spent about $2 million in roughly two years of early stage R&D, though the germ of the idea apparently existed before, in predecessor company Naqi Logics going back to 2015 or so), and still having no revenue or firm commercial prospects in 2025.

There is some reason for hope — they’re not going to be publicly traded anytime soon, so any investor buying in here should assume that their money is tied up for at least five years and the probability of your investment making any money is very low… but that’s true of essentially all of these early-stage “crowdfunding” investments. The optimism comes from the fact that the CEO of the company is serial entrepreneur Mark Godsby, who had success with ID Biomedical and Angiotech in the biotech space, and who is also at the helm of Exro Technologies, a company that is public, albeit also quite early stage and “pre-revenue,” and has gotten some attention for its battery control systems (Alex Koyfman has been pitching that one as “Tesla’s Nightmare” for about three years now).

Remember, the key word in private investments is private. There is no public market for these shares, and in most cases there is really nowhere to trade them — which means that you’re speculating on an R&D project, and it’s very unlikely that you’d ever be able to sell that speculative stake unless the company gets bought out or goes public (sometimes that happens in a year or two, sometimes ten… and often, it doesn’t happen at all). If it’s clear to you that it’s failing in a year or two, or you lose your confidence in management, you usually can’t just sell and take your loss — the money is committed, with no particular “exit” planned or predicted. That doesn’t seem like a big deal when you’re excited about buying into a cool idea, but passions cool and excitement wanes and, well, not to be a downer, but most R&D startups fail.

I wouldn’t talk you out of doing this kind of early-stage investing if you love to research new ideas or daydream about long-odds victories, but if you are going to dabble in these kinds of companies I would urge you to lean on the side of pessimism when you decide how much to invest — everyone always says that you should never invest more than you can afford to lose, so those words tend to lose their meaning when you’re imagining that you’re an early-state seed investor in the next billion-dollar idea… but with early stage private speculations, that is absolutely true. You’re very likely to lose it all, there are no “stop losses,” and you can’t change your mind.

So with that buzzkill under our belts now, what are the other “Billionaire’s Reserve Market” ideas being pitched by Shah Gilani? The second one sounds like it might be a bit more mature as a company, with a product already tested in pilot projects… from the ad:

“All the companies we’re looking at today are. Now, the deal we’re talking about right now – I’ve never seen a company with a clearer path to billions of dollars in revenue. Tampa Electric alone spends around $250 million a year to address the problem this company’s already solved. Dominion Energy in Virginia is spending $222 million a year. Florida Power & Light is looking at spending $577 million per year. Pacific Gas & Electric – PG&E is going to spend about $4 billion a year on it. That’s five customers spending $5 billion a year. That’s how big the market is….

“This company not only has a better solution to a huge problem – they’re also 98% cheaper than their competition. They’ve also done all the legwork up front. They’re already an approved utility in over a dozen states. Plus, they have federal approval to work on government lands – including offshore projects in federal waters….

… PG&E is already a client. The company already completed a pilot project with them in California… so there’s no question on if they land a partnership with a major player. They’ve already done it. We’re just talking about scaling up. This company is faster than the competition. They’re cheaper than the competition. PG&E is spending $40 billion over 10 years on a problem they’ve already solved. We estimate the company we’re looking at today can get that project done for $4.8 billion. So the CEO of Pacific Gas & Electric has a simple choice. They can go with the competition – waste 10 years and $40 billion on multiple contracts – or they can be done in a fraction of the time, give themselves a billion-dollar bonus for coming in ahead of schedule, and still finish the project $34 billion under budgets. It’s not a hard choice.”

So what does this company do? Apparently they’re like a more advanced version of Elon Musk’s Boring Company — they make equipment for tunneling, but apparently their technology is different (and/or better). More from Gilani…

“They don’t grind through the rock with a drill. They vaporize it. Their machine takes a concentrated stream of plasma and melts it into nothing. All this left is tiny particles of ash. They literally suck them out with a vacuum cleaner. It’s cheaper. It’s way faster. It’s really, really cool to watch.”

Cheaper and cooler than Elon Musk? That’s pretty much a tailor-made story for pitching to individual investors. And they push further on that idea…

“The Boring Company’s machine can – according to their site – do a mile a week. This company’s machines can do four times that. Now, Musk founded his company in 2018 with $112 million – 90% of which was his own money. Today – with their machine operational and no contracts in place or pilot projects – The Boring Company is worth $5.68 billion. That’s what a company with a better tunneling machine is worth according to the market.”

Other hints?

“They’ve gotten federal approval for a project to bore a tunnel out from the West Coast… under the ocean… through the continental shelf. It’s going to connect offshore wind farms to the land. They’ve got another contract signed and underway to build a tunnel from North Dakota to Chicago. That project is gonna run power lines directly from a wind farm there into the city. That’s gonna be about 1,000 kilometers of tunnel.”

And Gilani says they have functioning plasma drilling machines, but they’ve been self-funded by their founder, who comes from “the energy space,” and they need capital to build more and larger machines. And he drops some other hints about that founder, too…

“This company has a rock-star founder with a 30-year track record of success. He put his first company on the Billionaire’s Reserve Market in 1993. His earliest investors got in at around $2.25 a share, but keep in mind – you had to buy 50,000 shares at a time to get in. That’s how they kept everyday people out of the deal. When he took that company public in 1996, those shares were north of $40 a pop. February of 2000, they were worth $512 each. That’s more than a 22,000% return.”

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So… who’s that? Thinkolator sez he’s pitching EarthGrid PBC, whose investor pitch is here. That’s a project from Troy Helming, who has built two other startups into viable alternative energy companies (TradeWind Energy and Pristine Sun), and who aims to build a tunnel company that can help distribute clean energy — mostly by building tunnels that will serve as conduits for electrical transmission. They have a pretty well thought-out big picture plan, with the capacity to offer both tunneling services and their own tunnel network (with access sold on a toll basis, not unlike pipelines), and with approvals from states to operate a utility, which gives more access to rights of way… though they’re probably still quite a long way from proving out the larger versions of their machines, let alone using them in the field to build out tunnels and prove that their business model will work. There’s a good New Atlas description of the business here.

There are plenty of other new-tech drilling companies — the most closely related is probably Petra/Arcbyt, which is more advanced in its plans to bury utility lines with an autonomous robot (they’ve reached Series A, getting $30 million in “real” venture capital funding, while EarthGrid is pitching itself as a Public Benefit Corporation and raising funds from individuals). I read an interesting Wired story back in August about several of the “boring” companies, so that might get you excited about the big picture opportunity.

According to their Netcapital portal, EarthGrid PBC has raised only $50,000 at a $4.38 share price in the first six weeks or so (the offering was launched in November), giving them an implied valuation of $60 million, with Troy Helming owning more than 95% of the company. The minimum investment is about $100. They say in their offering materials that the maximum amount they’ll sell is $5 million worth of shares, of which they’ll need to spend about $4 million to acquire a tunnel boring machine… which is strange phrasing for a company that’s pitched as the developer of a new drilling technology — you’d think they’d be building it, not acquiring it, but maybe they’re depending on partners to build the equipment.

Either way, that’s a lot of money to raise at $100 a clip, and then they’ll have to “acquire” that drilling machine and begin to use it to develop their planned networks of tunnels. If they raise somewhat less than the $4 million they need for the drilling equipment, as is currently the situation (they’re at $50,000 at the moment)? I have no idea, maybe they’ll just… try to raise money again? Highly speculative, super early, and very capital intensive for a little startup. Color me skeptical, but I guess that’s no surprise.

And yes, there’s more — Gilani teases a third startup as well. Here’s how that pitch goes:

“It’s a medical company. They’re working on a breakthrough device to cure severe vision problems without surgery. And I’m talking about severe vision problems – even for people who are legally blind. If you can see it all, they can restore you to functional 20/20 vision with a device that is indistinguishable from a pair of glasses…

“They ran a study with the University of Ohio. Their technology let people who were legally blind read at the equivalent of 20/20 vision. They already have millions of dollars in revenue. Their current customers include the National Eye Institute, the National Science Foundation, DARPA – that’s the Defense Advanced Research Projects Agency – the National Institutes of Health, and the U.S. Army.

“The superglasses work differently. The actual lenses in the frame doesn’t do anything. It’s just there to keep them from looking weird. Instead, they’ve got ultrahigh-definition cameras built into them. When you’re wearing them, you can set the magnification as high as you need. If you need letters to be 30 feet tall, you can make them 30 feet tall. If you need them to be 40 feet tall, make them 40 feet tall. There’s really not a limit. So as long as you can see at all, you can set them to a level of magnification and contrast that effectively gives you 20/20 vision….

“Instead of a little TV, these super glasses use tiny projectors. And because you can’t project an image right onto someone’s eyeball – that’s not how our eyes work – the superglasses get paired with a set of contact lenses. Those work like a screen in a movie theater. So whatever the cameras are seeing sits right in front of your eyes in ultrahigh-definition at whatever magnification you need.

“I see this as a straight-up acquisition play. With this trial in the works, they’re prime target to be bought out by a major player. And no matter the industry, an acquisition means a huge payday without having to wait years for an IPO.”

Thinkolator says that is Innovega, with its eMacula System that projects enhanced images onto their iOptik contact lenses. That technology showed some promise with “low vision” test subjects last year. Their website pitches their product as an “augmented reality” contact lens, and a better way to access the “metaverse,” and I guess that’s sexier, but in practice it sounds like a more practical “supermagnifying” solution for those who can’t read signs or view their smartphone within the limitations of conventional eyeglasses. They’ve made some pre-commercial progress in signing deals with electronics companies and unnamed suppliers of “technology for visually impaired”. They launched their last public fundraising campaign with StartEngine last March, and that particular fundraising campaign is closed, coming in around $6 million in total before it ended in late September (most of that was raised outside of StartEngine, presumably from larger investors), so perhaps this one is just a little hanger-on left over from an earlier version of this pitch from Gilani.

No idea how Innovega’s work is proceeding at this point, they haven’t publicly reported on any test results since their press releases about “positive results” from the small Phase 2 trial a year ago, and at the time of their fundraising they were hoping to have FDA market clearance in the first quarter of 2023, with the product for the visually impaired being launched shortly thereafter by a partner who will pay royalties to Innovega. I don’t know whether they need approval as a medical device if the primary market is not the vision impaired, for the AR-focused stuff, but regardless, they’re not currently raising money so you don’t have to develop an opinion on this one at the moment. They may be able to move into product release without raising any more money, since they aim to use licensing and royalty arrangements to commercialize their technology, but that assumes all goes well.

So there you have it, dear friends — one expired capital raise, and two companies who are currently raising money in what Shah Gilani calls the “Billionaire’s Reserve Market”. Can’t say that I’m all that excited about either of these ideas, but I think that has been the case with every “private” investment I’ve covered over the years here at Stock Gumshoe, from Brazilian potash startups to Las Vegas marijuana real estate, so maybe I’m just not suited to be a venture capital investor… even though I will confess that there’s always something a little tempting about “getting in early” and feeling like you’re a visionary. Anything strike your fancy this time through? Other private deals that jump out as attractive? Let us know with a comment below.