Virtuix, the trailblazing VR startup from Austin, Texas that made headlines with their Immersion-inducing motion platform known as the Omni, announced Tuesday they will be exploring an innovative new “mini-IPO” option for the company’s next round of fundraising. The Omni VR Treadmill found fundraising success, bringing in more than $1 million from Kickstarter.
According to the company’s official press release:
Virtuix “has begun a ‘testing-the-waters’ investment stage on SeedInvest under the new mini-IPO rules of Regulation A.”
Regulation A, part of the JOBS Act, was signed into law by President Barack Obama in 2012. The act grants entrepreneurs easier access to capital and allows private companies to crowd-source their fundraising efforts and advertise their capital needs outside of the established investment circle.
Additional changes to investing laws removed certain limiting stipulations concerning who could invest in these early-stage growth companies, and startups like Virtuix are eager to take advantage of the newly laced provisions.
“With the new regulation under Title IV of the JOBS Act, the opportunity to invest in private tech startups is now extended to everyone,” the release said.
Essentially this means tech startups like Virtuix can now be supported by crowd-sourced investors rather than fans. One of the major drawbacks of a site such as Kickstarter is that it provides donors with no equity stake in the companies they are helping to create. This means a zero percent return on investment.
Now, however, those with the passion for the products and the capital to get involved can join the fray as full-fledged investors and collect returns on their contributions.
This is great news for investors looking to break into the rapidly growing VR space, which raised more than $384 million in investments in 2015 alone. Additionally, investment analysis site Pitchbook states that nearly $3.9 billion has been shuttled into VR since 2010 over the course of only 353 completed deals.
It’s not just the newly enabled investors who may benefit from Title IV. Virtuix CEO Jan Goetgeluk believes that the ability to grow his company – which began as a Kickstarter success story – by working directly with their most passionate supporters, will be paramount to future success. Goetgeluk said in the release that:
“Our company owes its beginning to the support of the passionate virtual reality community. Now, … our customers and supporters may have a chance to buy shares in Virtuix alongside Silicon Valley venture capitalists and global institutional investors.”
To date, Virtuix has raised more than $9 million in funding from Silicon Valley mainstays Maveron and Tekton, but has also been supported by more diversified investors such as billionaire Mark Cuban.
Eager investors who would like to see their names added to that list should note Virtuix is currently accepting non-binding indications of interest for the Title IV round at seedinvest.com/virtuix.
