Exploring StartEngine: Equity Crowdfunding for Open Hardware

I've been thinking a lot about how to fund Thios sustainably. Traditional VC doesn't make sense for open hardware—investors want moats, and we're literally giving away our IP. Bootstrapping works, but it's slow. Grants are great, but unreliable.

Then I discovered StartEngine.

What is StartEngine?

StartEngine is an equity crowdfunding platform. Think Kickstarter, but instead of getting a product, backers get actual equity in your company.

The JOBS Act (2012) and Regulation CF (2016) made this legal for the first time. Now, non-accredited investors—regular people—can invest in startups.

The Basics

• Minimum raise: $10,000
• Maximum raise: $5 million per year (Reg CF)
• Investor limits: Based on income/net worth
• Platform fee: ~7-8% of funds raised
• Timeline: 30-60 days for campaign

Why This Interests Me

Open hardware has a community problem disguised as a funding problem.

We have users who:

• Love the product
• Believe in the mission
• Want to see it succeed
• Can't contribute code or CAD

What if they could contribute capital instead?

Equity crowdfunding turns users into owners. It aligns incentives. It builds a community of stakeholders who are invested (literally) in success.

The Thios Case for StartEngine

Here's my pitch (still rough):

The Problem

Controlled environment agriculture is growing, but the tools are:

• Proprietary and expensive
• Closed-source and inflexible
• Designed for commercial scale, not hobbyists
• Inaccessible to researchers and educators

The Solution

Thios builds open-source hardware for controlled environments:

• Thiosphere™ SDK - Modular, customizable systems
• Saunosphere™ - Sauna control and monitoring
• Immosphere™ - Cold plunge systems
• Agrosphere™ - Indoor growing environments

The Traction

• ✅ Working prototypes
• ✅ Open-source documentation
• ✅ Active community
• ✅ Store launching (store.thios.co)
• ✅ Revenue from handbook sales

The Ask

$500K at a $3M valuation to:

• Hire a mechanical engineer ($80K/year)
• Build manufacturing partnerships
• Expand product line (Immosphere™, Agrosphere™)
• Scale marketing and community
• Attend trade shows and conferences

The Return

Investors get:

• Equity in Thios + Co.
• Quarterly updates
• Exclusive access to new products
• Voting rights on major decisions
• Potential exit via acquisition or IPO (long-term)

The Open Source Paradox

Here's the elephant in the room: How do you build a valuable company when your IP is open source?

Good question. Here's my answer:

1. Open Source ≠ No Moat

Our moat isn't patents. It's:

• Brand - Thios is synonymous with quality open hardware
• Community - Network effects of contributors and users
• Expertise - We know this domain better than anyone
• Ecosystem - Tools, docs, integrations that take years to replicate
• Trust - Transparency builds loyalty

2. Revenue Isn't from IP

We make money from:

• Products - Assembled systems, not just plans
• Services - Consulting, custom builds, support
• Content - Handbooks, courses, certifications
• Marketplace - Taking a cut of community commerce

3. Open Source Accelerates Growth

Closed source means:

• Slow iteration (only we can improve it)
• Limited adoption (trust issues, lock-in fears)
• High support costs (we're the only experts)

Open source means:

• Fast iteration (community contributions)
• Rapid adoption (no lock-in, easy to try)
• Distributed support (community helps community)

The Risks

I'm not naive. Equity crowdfunding has challenges:

For the Company

• Dilution - Giving up 10-15% equity
• Complexity - Managing hundreds of small shareholders
• Reporting - Quarterly updates, annual filings
• Pressure - Public expectations and scrutiny

For Investors

• Illiquidity - Can't easily sell shares
• Risk - Most startups fail
• Dilution - Future rounds could reduce ownership
• No dividends - Unlikely to see cash returns for years

For Open Source

• Mission drift - Pressure to prioritize profit over openness
• Community tension - Balancing investor and user interests
• Perception - Some see profit motive as antithetical to open source

My Current Thinking

I'm seriously considering a StartEngine campaign in Q1 2025. Here's my plan:

Phase 1: Validation (Now - Jan 2025)

• [ ] Talk to StartEngine team
• [ ] Review legal requirements
• [ ] Survey community interest
• [ ] Refine pitch and valuation
• [ ] Build financial projections

Phase 2: Preparation (Jan - Feb 2025)

• [ ] Create campaign video
• [ ] Write offering documents
• [ ] Get legal review
• [ ] Build investor FAQ
• [ ] Line up early commitments

Phase 3: Campaign (Mar - Apr 2025)

• [ ] Launch on StartEngine
• [ ] Daily updates and engagement
• [ ] Press and media outreach
• [ ] Community mobilization
• [ ] Hit funding goal

Phase 4: Execution (May 2025+)

• [ ] Close round and transfer funds
• [ ] Onboard investors
• [ ] Execute on roadmap
• [ ] Quarterly reporting
• [ ] Build toward next milestone

Questions I'm Wrestling With

I don't have all the answers yet. Here are the big questions:

1. What's the right valuation? Too high scares investors, too low leaves money on the table.

2. How much to raise? $500K feels right, but is it enough to hit meaningful milestones?

3. What terms? Common stock? SAFE? Convertible note? Revenue share?

4. How to structure governance? Do small investors get voting rights? Board seats?

5. What's the exit strategy? Acquisition? IPO? Perpetual private company?

What I Need from You

If you're reading this, I want your input:

Would you invest in Thios?

• If yes, why? What would make you confident?
• If no, why not? What's missing?
• What questions would you need answered?

What concerns you most?

• About the business model?
• About open source + equity?
• About the market opportunity?

What would make this a no-brainer?

• Better traction metrics?
• Stronger team?
• Clearer path to profitability?

Drop your thoughts in the comments. This is a community decision as much as a business one.

The Bigger Picture

This isn't just about Thios. It's about proving a model.

Can open-source hardware companies raise capital from their communities?

Can you build a valuable business while giving away your IP?

Can equity crowdfunding democratize startup investing?

I don't know yet. But I'm going to find out.

And I'm going to document the entire journey right here on this blog.

Stay tuned. 🚀

Resources:

• StartEngine
• SEC Regulation CF
• Equity Crowdfunding Guide

P.S. - If you work at StartEngine or have run a successful campaign, I'd love to talk. Reach out!