Purism Investment Opportunity Email

I recently received an email from Purism support about an exciting investment opportunity in the company. Me of all people. Here is what it contained:

Purism Supporter,

We are contacting you either because you have directly asked us about investing in Purism in the past, or you are a Purism supporter who we thought would be interested in hearing about a special investment opportunity. If you are not interested and don’t want any more emails from us, please let us know and we will be happy to remove you from this private mailing list.

Purism has accepted investment over the years in the form of convertible notes, generally from larger investors, yet we frequently are contacted by people who would like to invest a smaller amount because they believe in our cause and social purpose, and want to be a part of it beyond just buying our products. Soon after Purism closes a large equity round, this early-stage note opportunity will not be available. We have opened this limited investment opportunity for our supporters to get the benefit of early investment at terms better than the next investment round. That means you!

With this investment opportunity we are accepting increments starting at $1000 and have simplified the entire investment process. We invite you to get more information on this investment round including how to invest, where we will use the funds, and our current progress in this round at our private investment page at https://puri.sm/ir/convertible-note/.

Sincerely,

Todd Weaver
CEO and Founder
Purism, SPC

I am not the only one who has received this email. In fact there is already a whole reddit thread on it. Now let me give you my baseline thoughts in an effort to kick off a rational discussion on this event:

  1. As far as I’m concerned, this is spam. I neither solicited this kind of communication from Purism nor expected it.

  2. The informational page here is misleading on the surface as it appears to indicate that Purism has raised 2.5 million dollars on day one, when in reality if you scroll down they clarify that 2.5 million of it was raised back in December of 2019.

  3. Purism states that if you invest, these are the terms of the agreement, between you and them. However given that Purism has already retroactively changed the terms of their return policy for Librem 5 buyers/backers/investors more than once, I wouldn’t trust that statement. Unless its signed and notarized, you have no way of forcing Purism to keep their word.

  4. They claim up front that the note will pay 3% interest annually but then later on imply hat you should not expect to receive annual interest payments and instead expect that to become equity during a conversion event of some sort:

    When do I get my return on investment?

    This is considered early stage investment, typically in growing technology companies, whereby you desire to invest early and see all the upside of holding that investment past the conversion event—where you become a shareholder—and into future equity events, such as dividend payments, IPO, or acquisition. This process is typically measured in years, and should not be considered a short-term investment.

Beyond that, I’m curious to hear what thoughts others in this community might have on this event.

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I am a big proponent of talking to your loyal customers and engaging them as potential shareholders.

I have dealt with the angel investors, venture capital firms, c-levles and various levels of shills. I cannot describe in words how deeply I despise these people.

Before I say the next thing, please know that while I believe the SEC is completely corrupt and working against American national interests, I support the theoretical role the SEC and other government oversight over the securities marketplace. These governing levers are the only mechanisms that we know of that can produce a reasonably fair playing field and are absolutely necessary to protect those that want to play but don’t fully understand the rules of the game they are playing.

Having said that, things like banks and the stock market are basically dead tech and are going to be re-aligned (eventually) withing the global financial web and new technologies will come up and offer more choice and flexibility. The whole blockchain thing is going through the teething stage of a newborn technology as it tries to find its niche in the broader world of finance. The stock market and venture capital made sense in a world where the closest thing to social media was a newspaper. Today, with everyone carrying a supercomputer in their pocket fully networked to every other human being on the planet, the roles of these two financial tiers will be reconfigured by the market place of new opportunities.

The point that I am making is that, as you are responding to this for two reasons:

  1. It’s novel to you.

  2. Because you know the status of the company, you also know why this kind of communication might be happening.

… you might be missing the following:

  1. This is going to happen more and more and more. A whole bunch of new opportunities are about to arise in the finance world, it’s going to get complex, it’s going to get crazy and what you are seeing here is just the beginning.

If you were wrap up those 3 points as part of your portfolio due diligence, you should think long and hard about your investment being based on hard feelings and perceptions based shallow understanding of business, supply chains and so forth and instead consider that you may have an opportunity (or a potential loss, depending on your time frame) that may not have been available otherwise.

NOTE: To those that are going to say it, you are correct, the stock market, central banks, banking system nor venture capital are not going away, but the market will change dramatically in the near future and their roles will probably change dramatically as well.

In my opinion anyway.

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To protect our freedoms I prefer to support Purism via donation or investments today, rather than my grandchildren have to buy g*ns to get their freedom back!

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LOL Say what?

I applaud your fair and balanced approach here.

I too received the email (twice). I don’t see anything wrong with it per se, but like you found the misleading nature of the amount already raised as cheapening the request. Why try to beguile me? Why not just tell me the truth regarding the finances on this directly and upfront? What are the consequences of not receiving enough by this way of funding, etc?

That said, I do think that for a company like Purism, this is a viable way to raise funds that doesn’t rely on traditional strings attached investing.

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Thanks. I tried to keep my post here as free of contentious material as was possible.

You raise an excellent point though. As Purism is soliciting actual investment, I as a prospective investor (not really, but they did solicit me, so lets pretend for a moment) would like answers to some basic financial questions:

  1. What were Purism’s revenues and profits/losses over the last three years?

  2. Is Purism consistently paying out interest to investors from back in 2019?

  3. Why is Purism implying that this isn’t supposed to be discussed publicly?

    Can I share this investment opportunity with my friends or post about it on social media?

    Yes, while this is not a public offering, it is an offering to friends, supporters, and their friends and supporters. We will not be offering this to any other groups besides our supporters and customers directly, we also will not be linking to this campaign from our site nor forums, but you are more than welcome to share that in your personal capacity or on your personal social media outlets. We desire to extend the offer—and its potential return—to those that are supportive of our Social Purpose movement and whom know the value that Purism brings.

  4. Will Purism investors be furnished with information about the companies performance? For instance, will investors be told what Purism’s quarterly performance is in terms of revenue, profit/loss, orders and shipments on a quarterly basis?

The more I think about this, the more questions I have.

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There may be a Nigerian prince who may be interested …

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I agree that some more detail on the financials would be helpful for making an informed decision.

I don’t agree that they’re trying to prevent public discussion about the offering; they literally said people are welcome to share it publicly.

Also, it is actually linked from their site, or at least from their Investor Relations page (puri.sm/ir). Not sure why they said it isn’t. Maybe they meant from their main landing page…?

Edit: I guess there’s no direct link from puri.sm to puri.sm/ir.

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I agree, I see point 4. as very important.

I personally cannot imagine investing into interesting project without having opportunity peek into finances reports.

Few years ago, I would be happy to invest into Purism, but with history of transparency issues, I don’t have enough reliable information (and I assume they’ll not going to pop-up) to back them up finnancially.

@jaylittle I never though you’ll write something mostly unbiased about Purism, so congrats :slight_smile:

EDIT2: so IMHO backing Purism right now it’s like lottery, where at 2026, you’ll know if you won few percent or lost.

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As far as I’m concerned, this post is spam.

Please don’t post one-sentence takedowns. Jaylittle wrote the reasons why he thinks it’s spam. Let’s keep the discussion argumented.

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Besides being sent out of the blue, I don’t understand why people outside the US are getting this mail too. It seems entirely addressed at US residents. It doesn’t even mention other countries. I don’t mind the company searching investment but I’m sorry this seems like a really sketchy and disrespectful way.

I don’t see how this should be restricted to US residents, it does not even mention that it is US only.

Maybe? The point is that it’s not mentioned anywhere. I would imagine it’s a lot more complex to handle cross-border investment. And it does mention specific US laws and concepts, such as “accredited investor”.

It is mentioned in the terms PDF which explicitly stats that Foreign Investors are allowed but the burden rests upon the investor to insure that they are all following the letter of the law within their specific country / region.

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My point is, that restriction to US residents is not mentioned either. It’s not mentioned in the email letter, not are “accredited investor” rules excluding foreign persons, companies or institutions.

Do you realize how much spam starts off the same way? You of all people! The rest reads like spam with a amazing opportunity to lose all my money. Too commercial, too much like spam. Too few numbers.

That aside:

  1. I know why it’s suggested - too make money up front to grow and grow until it pays back way down the road. It’s why I’ve quoted:

Thanks to COVID (real or not), I’ve eaten up a lot of investments, some tanked, cashed in on some and am not comfortable with SEC for same reasons as pointed out by

and would not invest in another countries well-being ever again while my country has buried my great-great-great grandchildren’s greater grandchildren in debt. If I were to invest in American technology, it would be in guns and bullets.

COVID (real or not) aint over and today’s news says it is to get worse with the new variant and numbers seem to justify that. On the international market, if I were to invest, it would be in Russian and Chinese technology and oil. I read earlier today how the DOW is reflecting it’s lack of trust in the near future. Top it off, China’s Xiaomi Corporation has become the world’s second biggest smartphone producer, beating US rival Apple Inc by 3% in global shipments. Of course their products can’t hold a candle to Puri.

I invest in america every time I go into a local retail (most owned by u.s. companies) and buy a product (most from Product of the U.S.A (made in China, or Mexico, or Taiwan…), and pay in U.S. prices disguised as Canadian dollars.

I’d love in invest in Purism and get paid dividends in U.S. $'s so I can pay higher taxes to support our poor politicians. My hope would be like many start-ups, sell the concept or product, get a good start, show lots of interest, and a corporation with big money will buy us out with fair over-value market prices. But to me, the future looks dim, bleak, and too short for anything long term…

Like Kenny Rogers said… “You’ve got to know when to hold 'em, Know when to fold 'em, Know when to walk away…”. and right now, for me, is not good time to even play. But I’ll watch with bated breath.

IMO
~s~
.

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and @vmedea

Most prospectuses issued in Australia simply say that US investors are not eligible - because the company issuing the prospectus is unable or unwilling to comply with SEC requirements.

Purism can’t possibly research the legal requirements in 100 countries. So that burden falls upon the investor.

Then there’s the issue of being paid interest in a foreign currency, which is a minor headache but a headache nevertheless.

So being outside the US for this investment is likely to make it less attractive.

But if everyone is willing to jump the necessary hurdles …

The text “this is not a public offering” is technical (financial) terminology. It is not implying what you are suggesting it is implying. Indeed

Q. Can I share this investment opportunity with my friends or post about it on social media?
A. Yes.

implies the exact opposite of what you are suggesting. ???

If you wanted to keep something “secret” then you wouldn’t post about it on social media.


My gripe is that the link in the OP doesn’t work (connection timed out). Anyone else seeing that? Not really helpful if Purism wants to attract investment …

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The link works for me right now. The progress is now showing 2.898 of 3 million raised. Which means in the last 2 days they raised a little under $400k.

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Now that the link is working and I have had a chance to read the details …

In addition to what I already wrote, it is important to understand that the majority of the public will not be eligible to invest. It is only offered to “accredited investors”, which effectively excludes the majority of the public (well, in most countries). That’s why it is not a public offering.

I can’t claim knowledge of US finance law but generally in order to make an offer to the public, the regulatory requirements are massively bigger (and the amount raised that will dissipated on overhead costs as a consequence will be higher, and the whole process will take longer, …).

This could probably have been expressed more clearly but it is important for Purism to disclose the total amount of “debt” that it is or will be carrying (by way of any series of notes, this series or an earlier series).

I think you can see that if Purism just said: we’re issuing a series of notes to raise $500k (which appears to be true) then that would not give as complete a picture of Purism’s “debt” position.

I think this may be your misunderstanding i.e. I don’t think it says that.

Perhaps “getting a return on investment” is intended to mean “ending up with more money than you started with”. That, after all, is the goal of investment. Right?

Because of the nature of Convertible Notes as an investment, there are a range of scenarios in which you will end up with more money than you started with and a range of scenarios in which you won’t - and those scenarios are many and complex, and the date on which you are ahead, if that is the case, varies among the scenarios.

Purism does not, I think, clearly indicate what its intentions are when the notes mature at the end of 2026, and no doubt it wishes to retain the flexibility to decide that closer to the date, because it does not know what it will want to do five years hence. (As such, your suggestion that you should “expect that to become equity during a conversion event” is not strictly correct. You can’t expect that. It may be what transpires. It may not be.) This situation is not unusual for Convertible Notes.

In the most straightforward scenario, you will not be ahead before the end of 2026. That’s just one reason why it “should not be considered a short-term investment”.

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