Curious About Chapul Farms?
This page contains info for accredited investors potentially interested in supporting Chapul Farms' $10M Series A and an option to receive an invite to our webinar.
Chapul Farms designs, builds, and operates modular insect farms that turn organic waste into high-value animal feed and fertilizer products. The future of closed-loop agriculture starts here.
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Mission: Leverage a Reg D 506(c) raise to get sh*t done more efficiently.
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Rationale: Thinking of buying a new Tesla? For far less than the cost of a new Tesla, you can help us build our first commercial insect-powered organic waste processing facility. Speaking of Tesla, this single facility has the potential to divert more CO2e in one year than all Tesla electric vehicles sold in 2020 (more on that in the FAQ below!)
FAQ
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What's the investment opportunity?
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Chapul Farms is an insect agriculture project development company that designs, builds, and operates commercial scale Black Soldier Fly Larvae (BSFL) facilities.
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After a successful Seed Round with investors including Nexus PMG, Mark Cuban, and Kind Bar's Daniel Lubetzky, Chapul is inviting accredited investors to invest in our $10M Series A to break ground on our first facility
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Chapul Farms is initiating a $10M Series A fundraising round to begin construction on it's first at-scale commercial facility of its > $1B project pipeline, invest in new research and development opportunities, and sales and marketing growth within the multi-$B opportunity of insect agriculture.
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What are Chapul Chats?
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Chapul Chats are intimate webinars open to accredited investors interested in Chapul Farms' $10M Series A - Reg D 506(c).
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These webinars give us a chance to speak to audiences broader than our investor-base. The first 15 minutes will contain business updates, followed by 45 min of open Q&A discussion.
Who can attend / invest?
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Accredited investors (single income over $200k, joint over $300k, or net worth over $1M) able to invest a minimum of $25,000 are invited to join.
When are the next Chapul Chats?
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These webinars are hosted on the 3rd Thursday of every other month from 2 - 3 pm PT [2023 Dates: April 20 & June 15]
What if these times don't work for you or you just want more info?
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Email: aly@chapulfarms.com
What's the impact?
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A single insect facility processing organic waste has the potential to save 7M metric tons of GHGs each year. For comparison, that's more than 70k homes converting to solar. Eventually, our total project pipeline has the potential to divert 150M metric tons of GHG per year.
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Reducing food waste was found to be the most pressing solution amid a long list of action items to combat the effects of climate change by Project Drawdown. It's just one of the benefits of our business, which you can read more about in our white paper.
What's a Reg D 506(c)?
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A Regulation D 506(c) refers to the regulation passed by the SEC that allows for private companies like Chapul Farms to advertise private placements to raise money from accredited investors.
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Similar to the insect industry, the equity crowdfunding industry has seen accelerated growth. The combination of updated regulations and technology (crowdfund platforms that reduce the cost of raising capital from multiple sources) present a massive opportunity.
Why was this link sent to you?
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Today, accredited investors can directly buy equity in private companies, like Chapul Farms. For less than a Tesla, you can help us build the future of zero-waste infrastructure. We know that trust takes time to build and we want to get started.
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Our experience at Chapul - from aligning project stakeholders to successful previous fundraises - reinforces our belief that cooperation outpaces competition. By aligning incentives, we can work together to reverse the environmental trends toward extinction and make it profitable.
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With your help, we can break ground on our first facility without waiting for government tax credits or other traditional sources of capital.
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If you want to stop worrying about climate change and fix it instead, this page has found it's audience.
"Ok I'm Interested, but I'm new here. What's the *bug* deal?"
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Chapul Farms is solving the organic waste crisis with a winning business model. We sell custom insect farms to existing agricultural businesses, where insects consume the waste on-site. These facilities generate products to sell into multi-billion dollar markets like animal feed ingredients (insect larvae are natural food for chickens, fish, and pets) and soil bio-fertilizers (insect manure or “frass” stands to revolutionize soil health).
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Your investment will support breaking ground on the first Chapul Farms facility, which, only counting GHGs avoided by diverting organics waste from landfills, has the potential to divert 7M metric tons GHGs/yr (that's ONE facility; our pipeline is >$1B in capex).
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This invite is for you if you if you understand that "sustainable" means doing more with less (and doesn't mean "bad business").
"Can you give me some sound-bites to use in discussion?"
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Invest in Chapul Farms if you want to:
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Feed insects instead of landfills.
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Build infrastructure that regenerates soil instead of depleting it.
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Create revenue streams for farmers instead of waste.
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Help fix this planet instead of racing to Mars.
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Overwhelmed with data about which climate tech provides the most bang for your buck? ESG metrics, investments into carbon-capturing concrete, or even genetically edited corn won't mean *frass* unless we fix our fundamentals. We must close the loop.
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Nature gave us the solution millions of years ago: Insects. While other great companies are writing headlines about how “plant-based proteins” or “carbon-capture concrete” will save the world – we're hard at work restoring the planet using its very own design.
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These waste-to-value machines upcycle nutrients into products that can be sold into >$B markets ($550B animal feed, $160B fertilizer), replenish soil health, and so much more.
Who is Chapul Farms?
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Chapul Farms is led by insect agriculture industry leaders. Chapul's CEO was elected again this year as the chair of the board for the National Science Foundation's Center for Environmental Sustainability. We're unique in our partnership with Nexus PMG's experienced project engineering team. And we've built a project pipeline of over >$1B capex and opportunities for outsized returns. (You'll learn more at the Chapul Chat.)
If this solution is so perfect, why haven't I heard of it before?
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You have. Insects are already doing their job in natural ecosystems. This solution is already working at a variety of scales - on farms, in forests, and in trash cans where larvae do their work.
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Thought-leaders like McKinsey & Co have left insects completely out of their charts and lists of "climate-critical solutions" (how can you talk about alt protein fish feed ingredients without mentioning insects?)
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But here's part of the reason why: insects cannot be owned by a central "market creator." The ecosystem services insects provide also reduce reliance on products like synthetic fertilizers, antibiotics, and ultra-processed feed ingredients.
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Insect "technology" is already working in nature. It's sophisticated and complex (in ways that make it hard to model into E.S.G. reports without being reductionist or greenwashing), but also very simple in the common-sense observation that this solution is already working in nature.
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Why Invest Early?
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If you’ve made it this far, you should know that the first $1,000,000 we raise will receive a 10% discount on the unit price! If the next Chapul Chat feels too far away and you want to learn more about Chapul sooner, email aly@chapulfarms.com.
What are the fundraise details?
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Round: $10M Series A, Reg D 506(c)
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Minimum Investment: $25,000
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Pre-Money Valuation: $35,000,000
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Type: Series A Preferred Units
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Platform: Dealmaker.tech
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Terms:
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First $1,000,000 receives 10% discount on unit price ($1.94/unit)
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Next $9,000,000 priced at $2.16/unit
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More info - Dealmaker & Crowdfunding
OVERVIEW:
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While climate tech tries to reinvent the wheel, Shark Tank’s Chapul seeks support from accredited investors to accelerate (re)building existing natural “circular infrastructure” to eliminate waste and rebuild soil.
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Chapul Farms, in partnership with the seasoned engineers at Nexus PMG, designs, builds, and operates modular insect farms that turn organics waste into high-value food and agricultural products as a model of circular food systems of the future. The company’s business model is designed around the ideal methodology for the rapid scaling of insect agriculture and all related ecosystem services, making it possible and profitable for agricultural businesses to transition to net zero.
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After a successful Seed Round in 2022, with returning investors like Mark Cuban and Daniel Lubestzky, the company is leveraging equity crowdfund platform Dealmaker’s technology to open a $10M Series A Reg D 506(c) to accredited investors. “For the price of a new car ($25k min), accredited investors can support a nature-based, common-sense, foundational approach to building a sustainable future. The company is using equity crowdfund technology to foster deeper alignment and collaboration with capital.”
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(1) Chapul provides an immediate, meaningful climate action for accredited investors who share the company’s vision
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(2) Accredited investors (as compared to more institutional capital) offer investments that are more diversified, faster-moving, and more value-aligned
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Under the terms of the offering, Chapul Farms has agreed to issue and sell in private placement an aggregate of approximately $10M of the company’s Preferred Units at a price per unit of $2.16 (valuing the company at $35M pre-money).
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Chapul Farms said it would use the funding to accelerate the development of its >$1B project pipeline, invest in new research and development opportunities, and drive sales and marketing reach within the multi-$B opportunity of insect agriculture. The Offering is expected to allow the Company to position itself to monetize its pipeline with the achievable goal of breaking ground on its first industrial scale facility.
Why Equity Crowdfund?
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We live in a digital world, and there are now more efficient ways for companies to raise capital.
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The traditional IPO process is broken - IPOs and fundraising in general is admin-intensive, difficult, and expensive.
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We can’t fix broken food system with a broken financial system. So we are innovating in both business ecosystems in a way that aligns with our values: leverage a more diverse pool of capital and move swiftly with the support of aligned accredited investors.
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After the JOBS act (an update to fundraising regulation), companies like ours can solicit private capital raises to accredited investors (instead of funds, private equity, or angels).
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Why Chapul Farms + Reg D 506(c)?
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The form of Series A investment is called a Reg D 506(c), which means we can publicly advertise it. This is relatively new. It’s only for accredited investors (either $200k annual income ($300k joint) or over $1M in net worth) and we're using the platform and tech provided by Dealmaker.tech ​
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The campaign is unique for a few reasons:
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It's an ongoing campaign and money will come in over time. We can begin using funds after the first $1M is closed. ​
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Similar to the insect industry, the equity crowdfunding industry is disruptive. Today we're seeing the beginning of what we expect to be the future of funding: one that was held back by regulation (that has recently changed, creating this opportunity) but is now rapidly growing.
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We can out-pace and "out-align" more traditional funding sources. We can execute on our plan without compromising on our values or the long-term value to the planet by inviting investors that share our mission. We can build a model of ownership and funding that will scale up with us to build a food secure future.
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Why Dealmaker?
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“DealMaker's solution is an industry solution. Before we came along, users were doing business using a manual workflow that was costly, error-prone and resulted in tons of headaches. We entered the market to eliminate this friction and allow our customers to achieve more using digital technology. The result is they have a much better experience overall.” - Mat Goldstein, Co-Founder and Chief Revenue Officer
Historically:
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Pursue institutional capital (from the homogeneous finance or government sources), negotiate all the terms with all the different parties, then eventually get the funds.
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Costs (time/money) are high because of inter-negotiation among investors, legal fees, etc.
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Compromises (on values, time horizon) commonly trade long-term business success for short-term gains per the pressures of venture capital exits.
Today:
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We present all the terms - "here it is, if you want to invest" - there's no negotiation, and the market (supply/demand) dictates our success, not a gatekeeper.
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We have more control (terms, pacing) and are incentivized to be more transparent with our stakeholders.
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None of the money hits the books until there’s $1M invested, then it will flow in to the company on an ongoing basis after that.
We can stop the raise at any point. We don't have to raise the full $10M to secure the investment. We can also raise more.
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Benefits
70%
Gains in speed and cost savings
72 hrs to 30 min
Average transaction completion time reduced with elimination of print, sign, scan, and review loop
Everyone Wins
With digital. Companies raising on DealMaker have significantly lower costs, as much as 90% less
Decentralized
"Decentralized" may be a buzz-word, but its key to a resilient, fair future
Diversity
The benefits of a diverse investor base are like those of biodiversity in nature
Ownership
The future of ownership is distributed and aligned with value
Transparent
Reg D 506(c) reporting directly between Chapul and investors
Alignment
Opening our fundraise to capital that aligns on time, ethos, and incentive
Communication
Cooperation outpaces competition, and clear communication is key
Scalable
Tech that can scale with our needs - from future rounds to project financing
Control
We can set our own terms as desired and out-pace traditional capital
Empowerment
By turning our audience into activists, we invite aligned investors to act
Industry Trends & Insight:
It's been a tumultuous year for both the public and private markets. Compounded with higher cost of borrowing and inflation impacts, the macroeconomic trends have been a lot of doom and gloom. There is one sector that saw +16% growth in 2022, and one vehicle specifically that saw +21% growth. We are talking about Equity Crowdfunding.
If you look at the Private Markets, and compare deal counts for Venture Capital and Exit Activity, everything has been 'paused' and analysts are predicting that pause to hold until Q3 2023.
(Dealmaker - In 2022, Equity Crowdfunding was the only market that saw growth)
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*ECF = equity crowd funding
Last year was one of the toughest in recent history for the capital markets. The S&P 500 plummeted by nearly 20%. The crypto winter cost investors more than $2 trillion. VC deal counts dropped by 14%—and exits were down a whopping 88%. The one space that saw growth in 2022? Equity crowdfunding.
Did you know that over 50% of investors are using their mobile?
Now our investor flow is even more seamless as we'll be offering both Apple & GooglePay options through Dealmaker's platform.
Automation:
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A single transaction could take upwards of 70 hours of manual complex work, requiring a professional to review, correct, and re-circulate documents. Identifying a fragmented process that was extremely time-intensive and full of errors, Mat and Rebecca founded DealMaker, a digital transaction management platform that delivers a transformative solution to the global capital markets. DealMaker automates the circulation, management, and tracking of private placement documents and funds -- accelerating the capital raising process and providing significantly better investor experiences.
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Raising capital can be an arduous process, particularly when it comes to managing back-and-forth and investor follow-up to get the deal closed. DealMaker eliminates that pain by providing a full deal CRM to all companies raising on its platform.
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Complete Raise CRM:
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DealMaker offers real-time data on investor progress and payments, automated reminders to drive conversion, contact information and interaction data, as well as tagging and notes to manage investor interactions and follow-ups. DealMaker also offers full payment reconciliation to ensure all books and records are accurate and companies using its technology can close quickly. Companies using DealMaker are able to maximize conversion on their deals and close their raises up to 75% faster. (Investor Wire)
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Complete Solution:
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DealMaker is the only complete solution for companies raising capital, providing a seamless investor experience and a complete deal CRM with real-time data and analytics, as well as investor management and engagement tools. Companies using DealMaker complete their raises up to 75% faster and over 80% cheaper than traditional methods of capital raising.
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Companies raising on DealMaker have significantly lower costs, as much as 90% less, due to the elimination of document review and back-and-forth
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Technology Democratizing Finance:
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"I also think this is another part of the story where technology changes what people can do and changes what people didn’t think was possible previously. It used to be the case that when you priced an offering, that was the price, and it would be open for six or eight months. And regardless of what was happening with the company, you set a price. But today, with online capital raising, you can use techniques like testing the waters. You can record expressions of interest and you can be reactive to what the market is telling you about pricing. And to me, that’s another way that raising capital in the future more resembles e-commerce and less resembles sort of a stagnant process where you set a price and then you’re stuck with it." (7investing)
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