Is it a terrible idea to invest in this micromobility (hybrid electric tricycle) equity fundraiser?

In My Humble Opinion
41

Typically electric. As far as “meant to go on roads” – kinda?

Their original purpose was, of course, for use on golf courses, which meant driving on cart paths and grass fairways. However, as noted in this thread, golf-cart-like vehicles have become common in retirement communities in places like Florida and Arizona, as mobility vehicles and small, low-speed replacements for cars. In that context, you see owners driving them around on dedicated cart paths, as well as on residential streets with low speed limits – the latter may or may not be technically legal, depending on local laws. A lot of those retirement communities – like The Villages in Florida, and Sun City – are built specifically around the premise that residents use golf carts as a primary mode of transportation.

However, generally speaking, golf carts aren’t crashworthy, and aren’t licensed as on-road vehicles (i.e., you don’t see them with actual license plates).

42

A lighter electric golf cart starts at around 500 lbs at the low end. The batteries themselves for the lightest carts weigh more than the entire weight of that vehicle in your OP.

I looked up the ELF vehicle, and found this article:

So as you say, it’s basically an electric tricycle with a shell over it. A quality e-bike is around $2,000 (you can get one for half that price but those are usually considered to be garbage that you should not waste your time and money on). An ELF Solo right now, if you were to buy one (because there are places that sell them), they cost more than 4 times that price, and what you gain over a standard e-bike is some minimal protection from the elements while losing the convenience of being able to store it the way you would a regular bike (parking in a bike rack, mounting on a car, and so on). It doesn’t seem like a great trade-off to me.

Here is an alternative item I found, the “Simple Glide” powered quad bike.

It weighs a little less than the ELF. It doesn’t look as fancy, like it was designed for a 1960s science fiction film. And it costs half the price of the ELF. Honestly, it looks a lot more practical if you want something that does basically the same thing, if you are looking for function over style.

43

“Scam” might be a strong word. But yeah, it sounds like the OP is evaluating the company based on whether they subjectively think this product is a good idea.

Another approach is to evaluate the company not giving a shit about what the product actually is.

The OP says the company previously sold 850 of these. At $7,500 a pop, that’s $6.3 in revenue.

I asked ChatGPT what a good revenue multiple for companies that make “bikes and human powered vehicles” and it said 0.5 to 1.5. So that’s probably where they came up with the $9 million valuation.

How much did it cost to make and sell those 850 (total and per unit)?

How many of these things can the company manufacture in a year? 1,000? 10,000? 851?
What is the plan to scale manufacturing?

What is the per unit cost of sales?

What is their marketing and sales strategy?

Basically, it doesn’t matter if they are making bikes or widgets if they don’t have the capacity or plan to eventually make more of them.

44

But that is over eight years, so annual sales was only just over 100 units. They claimed $7 million in total revenue so $875,000 per year.

I don’t see how to get $9 million in valuation. That’s more than 10 times annual sales.

Of course, sales probably increased during that period so the final sales may have been twice that, but it still seems overpriced to me.

45

On thinking about those stats a bit more… They claim a top speed of 20 MPH without pedaling, 30 MPH with pedaling, and a power of 350-3000 watts, depending on model. The top speed is limited by power, and power is equal to speed times force. The resistive force on a bicycle is a mix of rolling resistance, which is proportional to speed, and air resistance, which is proportional to speed squared. That means that the amount of power needed is proportional to somewhere between the 2nd and 3rd power of speed. Which means that, best case, for that 30 MPH speed, they’re expecting the driver to provide more power than the motor. If the 350 watt motor is just barely able to make 20 MPH, then to get 30 MPH, the driver needs to supply 437.5 W, or about 0.6 horsepower. A human can do that, but it takes a pretty fit human, especially to sustain it for any significant amount of time. If, on the other hand, the 20 MPH motor-only top speed is for the 3000 W model, then you’d need to add over 5 horsepower by pedaling to reach 30. No human can do that.

Either they’re lying about their numbers, or the numbers are based on something other than the physical limitations.