LOS ANGELES, CA (KSLA) - A major development came Friday in funding for Elio Motors that could help bring the start-up within reach of building their 3-wheeled vehicle in the old General Motors plant in West Shreveport.
The company will be able ask to collect $25 million in equity from more than 6,000 investors who have pledged to buy stock in the company under a relatively new concept known as equity-based crowdfunding.
That's because the U.S. Securities and Exchange Commission (SEC) has approved of paperwork to allow the transactions to be conducted, whether the investors are accredited or not.
Until now, only "sophisticated" investors with at least $1 million in assets, not including their home, or with two years of income of at least $200,000 per individual or $300,000 for a family to invest.
Because of those federal regulations, the money raised in the 6 months since Elio's equity-based crowdfunding campaign was launched through StartEngine was only pledged and non-binding.
With the SEC ruling, the private company is cleared to immediately sell equity shares to both accredited and non-accredited investors across the United States, those interested in investing can now make good on their pledges and buy into the start-up for a minimum of $15,000.
Elio Motors will still have to contact those who pledged money and see if they are still interested.
According to StartEngine, the SEC ruling makes this fundraising effort one of the largest crowdfunding campaigns in history.
Ultimately, Elio Motors will use the money to build an extra 25 prototypes of the three-wheeled car for testing and validation.
The company still needs to raise $225 million to be able to start production in Shreveport, which Elio has said will begin by mid-2016, should the company acquire the funding necessary to do so.
The news comes a day after the latest version of the Elio was unveiled at the LA Auto Show by founder and CEO Paul Elio.
The newest prototype of the P5 features improved aerodynamics with a longer front end, as well as adjustments for headroom and comfort on the inside. Other changes include a redesigned iPad holder on the instrument panel and brushed metal on the dash "to accentuate its modern aesthetics."
According to the company, more than 47,000 people have reserved the Elio.
Designed to get up to 84 MPG, it's set to retail for a targeted base price of $6,800.