On Friday we unveiled Motley Fools Rush In, a trailblazing app that connects you with tomorrow's promising start-up businesses.
Fools Rush In promised to bring the best of Silicon Valley geist to investing by making buying into businesses fast, easy, and -- most of all -- thoughtless.
Of course, it was all part of our annual April Fool's Day joke. (If you haven't had a chance to see the joke yet -- click here to check it out.)
And a good thing too, because the businesses seeking funding were pretty terrible.
Some didn't have any real plan for making money. Others preyed on their customer. Others flirted with illegality. Yet their investor pitches all glossed over major, often fundamental weaknesses.
Investors will need to watch out now that it's becoming legal for companies to market their stock directly to investors online. And this year, crowdfunding portals perhaps not-too-different-in-substance from Fools Rush In will be allowed to start popping up. Investors should realize that investing in non-public companies comes with its own unique set of risks.
But even when you invest in a publicly traded growth stock, it's important to ask yourself whether what you're buying embodies David Gardner's six signs of a rule breaker:
1. Is it the top dog and first mover in an important, emerging industry
2. Does the company have a sustainable advantage gained through business momentum, patent protection, visionary leadership, or inept competitors?
3. Does the company have a record of strong past price appreciation?
4. Is management smart and do they enjoy smart backing?
5. Does the company have strong consumer appeal?
6. Can you find documented proof that the stock is overvalued according to the financial media?
Fools Rush In businesses didn't bear these characteristics, but they sure were fun for us to write about (and hopefully for you to read).
Without further adieu, here were the 3 most popular funding opportunities. (Drumrooooll...)
In third place...
76% Like rate
Edgar Jonas claimed to be solving the retirement crisis, 65 cents at a time. By rounding up its clients' credit card purchases and investing the difference in high-fee mutual funds on their behalf, this company aims to enrich both its clients and its shareholders.
But mostly just its shareholders.
Some investors really liked Jonas' model:
It's so easy & innovative!
It doesn't hurt! Just rounding up and you don't even notice it.
Go fees! I just can't get enough.
I love the idea. Do they have to be high fee funds? And, if they do why brag about that in your pitch? I would invest in this.
I love it! Tricky, haha!
Great idea! Bank of America did this for people with checking accounts through them.
Pennies turn to dollars that turn to gazillions of dollars.
Jonas also received some criticism and practical advice:
Strong business concept, going to need strong marketing to increase client base.
Why not try to grow by providing high quality low fee mutual funds instead of "high fee" mutual funds. Lot easier to build a sustainable business by providing value than by short-changing your customers.
Two things not to like: 1) any bank that already holds either a credit card or debit card with a company can easily compete with your model, and are already doing so. 2) you're charging high fees and even outwardly saying that your clients "probably won't read the prospectus". That's outrageous and offensive. It sounds like you're counting on deceptive practices.
You are doing the right thing by moving to the cloud. It obviously makes everything work better and your profits will soar (no pun intended). I think 1,154% [growth] may be a little high though. Pie in the sky, ha! You should also look at Nimbus hosting which is set to replace cloud based data from next year.
Investors were enthusiastic:
I seriously can't even. Just shut up and take my money!
In second place...
68% Like rate
This scrappy little pizza joint from Sheboygan, WI is looking to make it big as a national chain. Selling points include revolutionary pizzas "that just work" -- Pizzas with no toppings and can be self-delivered to your doorstep. What's more, Park Slope boasts a passing grade in a majority of its health inspections.
Here's what some Park Slope backers had to say:
I love being in the drivers seat and I love restaurants that pass most health inspections!
In an industry of conformity, this is exceptional!
I like the variable pricing.
I'm curious why a quick Google search for Park Slope Pizza, Sheboygan WI returns no results.
I love any pie co. where the crustaceans take their work seriously.
I think the best part of Pizza is the cheese, so why would you ruin it by adding in loads of crust and tomato. You guys have it nailed
Very impressed that you've passed the majority of your health inspections. I ran a restaurant for 13.5 months (net) and found closures due to cleanliness issues were a real drag.
And the most popular Fools Rush In business was...
89% Like rate
Admit it: You all loved Mary Jay.
The artisanal marijuana purveyor is a multi-faceted, multi-channel, multi-level marketing monster. It boasts a pyramid-shaped "best buds" program with strong incentives to bring in more contractors to sell its weed.
Investors wanted in:
I can smell the profits!
Great idea!! Do investors get free samples?
I really like the Best Buds program!
I used to grow my own when I lived out west. There could be a real opportunity to make money here if it were legal.
Sounds like a solid business plan. Very interested in learning more and potentially investing in your company.
What exactly is your business?
I especially appreciate the local sourcing -- although some strong regional brands might be something to consider in the future.
Who doesn't want to get in to a Pyramid scheme at the beginning?
What's not to love here? Millions, trillions, gazillions are on the horizon.
It's all about the growth potential. Do you think they'll grow faster than Starbuds (Ticker SBUD)?
Direct Selling Works. People want marijuana. What I want to know is if the stuff will be organic.
Pass me a twinkie!!!
But wait... there's more!
We also gave you the chance to pitch your own business, receive a corporate name, logo, and tag line, so that you could start getting funded right away.
And boy, you all stepped up. Here is just a handful of some of your inspired business ideas.
"Boilr". An app that services your boiler.
WhatsCrap! Is the social media of bodily functions. Users interact with each and even compete! Imagine knowing how many people around you are feeling the same urges as you! Share stories, locations and even pictures -- the sky is the limit.
Naptime-A chain of very quiet and softly lit stores where users can check in and take a quick nap. Kind of like a tanning salon only calmer and quieter. For just $10 you can take a 20 minute nap and the specially trained puppy at the front desk will wake you up.
It's like Chipotle, but for buying dogs.
Until next year, Fool On!