Where to find Angel investors interested in a small firearm related startup?

[RobV]

Wow, this is great feedback. Thank you.

As far as the SBR thing goes, it's as simple as this: it is whatever BATF says it is. They sent me their mailing address, and I'm going to write them a note with several different configurations (or 'embodiments') of the same invention, so they can confirm what is, and what it is not.

That said, let me just say some final things about SBRs...

Short barreled ARs are usually SBRs because they usually have short (removable/exchangeable) stocks as well, and their overall length is not over 26". In other words, if you have a fixed stock - one that must be attached in order for the gun to fire - and that stock has overall length of 26" - forget barrels. A 30" long rifle is not an SBR. It doesn't matter even if it has a 2" barrel. The rule does not apply. And the the NEDG at a fixed 30" is no longer easily concealable. That's the entire purpose of that clause: to avoid this entire argument.

As far as business plans, docs, NDAs, presentations, one page summaries go, they are all password protected on the corporate website, located here:
http://www.floridadiscountguns.com/investors-and-partners/ so I hear you on that.

Bad time to enter the market, well, you might be right on that if I'm going after the civilian market, but I'm getting some positive feedback from a few LEOs, and I had one company overseas contact me seeking to distribute to LEOs and Military in Central Europe. So if my plan gets 'Feinsteined', and I can't find a workaround, I may have to target that market instead, but if I can sell a few hundred of these, I think we can make all our money back, because I'm so incredibly starving-dog lean...

 

[SoCalNoMore]

Wow, this is great feedback. Thank you.

As far as the SBR thing goes, it's as simple as this: it is whatever BATF says it is. They sent me their mailing address, and I'm going to write them a note with several different configurations (or 'embodiments') of the same invention, so they can confirm what is, and what it is not.

That said, let me just say some final things about SBRs...

Short barreled ARs are usually SBRs because they usually have short (removable/exchangeable) stocks as well, and their overall length is not over 26". In other words, if you have a fixed stock - one that must be attached in order for the gun to fire - and that stock has overall length of 26" - forget barrels. A 30" long rifle is not an SBR. It doesn't matter even if it has a 2" barrel. The rule does not apply. And the the NEDG at a fixed 30" is no longer easily concealable. That's the entire purpose of that clause: to avoid this entire argument.

As far as business plans, docs, NDAs, presentations, one page summaries go, they are all password protected on the corporate website, located here:
http://www.floridadiscountguns.com/investors-and-partners/ so I hear you on that.

Bad time to enter the market, well, you might be right on that if I'm going after the civilian market, but I'm getting some positive feedback from a few LEOs, and I had one company overseas contact me seeking to distribute to LEOs and Military in Central Europe. So if my plan gets 'Feinsteined', and I can't find a workaround, I may have to target that market instead, but if I can sell a few hundred of these, I think we can make all our money back, because I'm so incredibly starving-dog lean...

If you sell a few hundred of these.... have you determined the cost of your liability insurance in that?

The SBA has free consultation from very good professional available. I would start there.

 

[Sam Cade]

Short barreled ARs are usually SBRs because they usually have short (removable/exchangeable) stocks as well, and their overall length is not over 26". In other words, if you have a fixed stock - one that must be attached in order for the gun to fire - and that stock has overall length of 26" - forget barrels. A 30" long rifle is not an SBR. It doesn't matter even if it has a 2" barrel. The rule does not apply. And the the NEDG at a fixed 30" is no longer easily concealable.
.

No. No. No. No.

To Wit: A M4 carbine clone with the stock collapsed is 29.75" long with a 14.5" barrel.

In order for a 14.5" barrel to be non-NFA , a muzzle device that extends the OAL of the barrel past a nominal 16" must be permanently affixed.

This puts the OAL of the rifle well past 30" with the stock collapsed.

 

[Bubbles]

As far as the SBR thing goes, it's as simple as this: it is whatever BATF says it is. They sent me their mailing address, and I'm going to write them a note with several different configurations (or 'embodiments') of the same invention, so they can confirm what is, and what it is not.

Typically they want a sample as well as drawings.

 

[InkEd]

I can't believe how many serious replies this post has received. :banghead:

 

[RobV]

>I can't believe how many serious replies this post has received.

That's because I'm dead serious. I'm going to seriously build this. And people will seriously buy it. And I will make serious money

 

[RobV]

>with the stock collapsed is 29.75" long
And you can easily remove that stock, and in it's place put on the attachment the pistol versions use, and shorten it below the legal limit. That stock is not an integral part of the gun, and is made to be swapped by the operator, not a gunsmith.

Try looking at it this way...

the term ''short-barreled rifle'' means a rifle having one or more barrels [...] if such weapon, as modified, has an overall length of less than twenty-six inches.

...we'll see what the BATF says.

 

[RobV]

>If you sell a few hundred of these.... have you determined the cost of your liability insurance in that?

I believe it will be something astronomical, but if we do it using injection molding, I think the market will bear the price. There may be no room for dealers initially, however. To be honest, though, I'm seeking to partner or get bought out before I ever produce the first batch. If we go to production alone, then we'll raise a 'Series A' and go for it. The board will probably pat me on the back and place a new CEO in my place, and I'm onto my next project.

At least that's what it says on page 32 Keep the faith

 

[Shadow 7D]

Rob, you have guys who are QUOTING THE LAW to you, trying to explain what you are doing wrong, I offer you the OTHER side of the law

Go ahead and make it
if you are wrong in your thinking of the definition of a SBR (and you are)
that's 10 years IN PRISON and $100,000 in fines....
your risk, go for it.

 

[Sam Cade]

>with the stock collapsed is 29.75" long
And you can easily remove that stock, and in it's place put on the attachment the pistol versions use, and shorten it below the legal limit.

A rifle cannot legally have a barrel shorter than 16" or an OAL of shorter than 26" without being papered as an SBR. Period.

A pistol can be freely assembled into a rifle configuration but it MUST meet all requirements of a non-NFA weapon.

Q: What is the registered part of a Short Barreled Rifle (SBR) or Short Barreled Shotgun (SBS)?

While a receiver alone may be classified as a “firearm” under the Gun Control Act (GCA), SBRs and SBSs are classified in totality under the National Firearms Act (NFA). A firearm that meets the definition of a SBR consists of a rifle that has a barrel less than 16 inches in length. A SBS consists of a shotgun that has a barrel less than 18 inches in length. The serialized receiver is recorded for registration in the National Firearms Registration and Transfer Record (NFRTR).

http://www.atf.gov/firearms/faq/nat...barreled-rifles-shotguns.html#part-registered

 

[MAKster]

This seems like an awful convoluted answer to an easy problem. Wouldn't it be much simpler to just drop your mag and reload when you still have a round left in the chamber. If you needed to fire before inserting the fresh mag you could fire the round in the chamber.

 

[KLL]

Rob, here is my answer, from experience on both ends of the situation, to your original question, how do you get investors:

As one poster mentioned, a business plan is a big first step. Part of this would be what most of the rest of this thread has been about, the classification, legality, and other legal issues involving your device. That should be laid out for a potential investor first and foremost, so they know what they are investing in is legal. I would want to know 100% that what I am putting thousands of dollars into can actually exist and be sold without legal issues.

Beyond that first element of the business plan, knowing the costs of producing your product, who you would sell it to, how many you think you could sell, overhead, etc., and documentation to back up all of those claims. And one big thing to include with the numbers, is when and how do I, as an investor, get my money back! After all that is why people invest, to make more money than what they put in to start. You also need to consider how much equity in your company you are giving away. You also need to know your competition, research if others have tried similar things in the past and why they were or were not successful, and essentially be a genius when it comes to the market you plan to do business in.

Investors will also want to know about you personally, as far as your career, education, your financial history (do you pay your bills and fulfill obligations, or do you leave creditors hanging, have you handled large loans well in the past, etc.), is this a full-time job or a pet project, and so on. If people don't like you AND trust you, they won't give you money, regardless of your product.

There is of course a lot more than goes into it, but these are the main items I'd expect to be presented to me, at minimum.

As to where you'd find potential investors to present this information to, friends, family, any gun enthusiast, anyone can be an investor. It's difficult to just find a list of people, word of mouth, talking, networking, etc. is pretty much how you connect with those who may be interested.

And don't let the current conditions get you down, when I see a market like this, I put money into the industry, because right now it's hard to have a product NOT sell. For instance, Cabela's is a stock I watch, right after Sandy Hook they took a dump, I put cash in, and they were up 20% within a couple weeks. Right now emotions will down businesses in the short term, but the economics don't lie, the firearms industry is printing money right now, as long as your business does not revolve around items with a high likelihood of being banned or regulated more, there's not a lot to worry about more than usual.

 

[RobV]

>Rob, you have guys who are QUOTING THE LAW to you,
No, I have people telling me their interpretation of the Law, based on their experiences and hearsay... and Sam was kind enough to quote a FAQ about the law, after you wrote that... but the only actual law that was actually quoted, was the law I quoted to you, which is US Code, Title 18, Part I, Chapter, Sec. 921.

Sam's point is that he keeps seeing the 'LESS THAN 16"' quote and that's all he feels that is important because the lower gun has a short barrel. I disagree, because lower down on the same page it says,

"Installation of a barrel greater than 16 inches in length (SBR) or 18 inches in length (SBS) will remove the firearm from the purview of the NFA[...]"

...so once again, we see an example of a FAQ (not a law) written from the perspective that double guns don't exist, so it's interpretation is subjective, but it seems clear, once "a barrel greater than 16 inches in length" is installed, it will "remove the firearm from the purview of the NFA". And when combined with an overall length of 26"+ (in my case 30") again, this weapon does NOT resemble a SBR, as defined by US Code, Title 18, Part I, Chapter, Sec. 921.

And just to say it again, I ALREADY wrote the BATF, and they responded with the appropriate snail mail address to send them my proposal. Which I am writing now. (And as Bubbles said, they will likely want a real life sample, which I don't have, but I dont think that will be an issue.) So everyone can quit worrying I'm going to go to jail. This thing only exists on paper. Once I can put bullets in it, then we can worry about that

>KLL
You just nailed several points spot on. The SBR issue is critical in understanding the scope of the market, which is a key factor in an investment decision. Liability is the other one.

>when I see a market like this, I put money into the industry
spoken like a true contrarian investor I totally agree, and Cabelas was a great example.

>when and how do I, as an investor, get my money back!
Agreed. It's really the only thing that matters to them. Right now I think we are looking at $10k convertible or exchangeable notes, as an alternative to direct equity swaps. This allows for smaller investors to come in and have the bulk of the money they invest go towards what's needed, as opposed to all the legal and accounting bills that could add up to almost half of the investment, just to get all the paperwork square. If they are interested in investing more that $25k, then I'll consider selling equity, otherwise, if I can raise ~$100k in a seed round, between ~10 investors, and issue convertible notes, we could basically end up with the patent, the blueprints and a working demo, and then go into a Series A and become a manufacturer, or sell out.

>where you'd find potential investors
Yeah, I think we put the SBR thing to rest.... BATF will decide... so I'd like to talk more about where to find venture money. Ideally, I was hoping there might be an angel fund somewhere that invested in firearm related startups, but so far I havent found any.

I HAVE found 3 people I would call 'potential investors'. One introduced himself to me over at the Glock Forum (a real estate investor/gun nut), one saw my Press Release (a France based LEO weapons distributor), and one I found yesterday morning by going over to a LinkedIn Angel Investment group and saw a post that said:

If you have an executive summary and your idea has a sell/cost ratio of 5:1 minimum, has broad consumer or customer appeal
and you have invested more than $3000.00 in development and your friends/relatives think your possibly deranged or insane for coming up with the idea, contact me.

That sounded like someone ready to get back in the game, so I fired back the following (cheeky) reply...

How does [your private investment company] feel about guns? PinkGuns and 'assalt weapons' in particular?

I have a firearm design and technology oriented startup, seeking $100k in seed money to help develop a conversion kit, that turns two semi-automatic pistols into a new form of non-regulated ultra high capacity assault weapon, called a 'Never-Empty Double Gun' (or 'NEDG'). What makes this weapon unique is it's ability to be reloaded before it ever runs out of bullets, which ensures it's operator is never defenseless.

I spent 5 months of my time and $4k of my own money on 3 sites:
http://www.PinkGun.com - offers custom decorated handguns for women.
http://www.theNEDG.com - features a patent-pending ultra high capacity assault weapon we seek funding to develop.
http://www.FloridaDiscountGuns.com - our corporate site

For an overview of the two projects, please see our most recent press release:
http://goo.gl/ZT1HX

For an example of traction, please see this Facebook post made by the 'Glock Forum' about the NEDG which received over 6200 'Likes' and over 2100 'Shares' and several hundred comments…
https://www.facebook.com/photo.php?pid=829910&l=b6d2f983fa&id=124556454325172
...I can point to other more extensive discussions in other forums, which also show that there is in fact a strong demand for this invention of mine.

In short, I know some investors look at me and this project like I just farted in church, but I got your 5:1 ratio right here The real question then is if [your private investment company] is interested in funding a firearm startup. If it will consider such a venture, then you and I should talk. If it won't, I'm hoping you happen to know another Angel that is a 'gun nut' type, that quietly likes to get out of the Valley once and a while and go hunting hogs, or shooting, or something which involves guns, because when they get a load of me - and what I've dreamt up - I'll bet you the first $100 we make, that person will lead my round.

...and the conversation took off from there, went to email, and lasted well into the night. I liked it because it was on LinkedIn so he could see my resume (which I agree is a key part to the equation) and I hit on all the main points I needed to in a pitch, and he was genuinely interested.

He ended up being an NRA/CCW card carrier and we both went to the same university, so that always helps a little, but we just seemed to hit it off. He hit me with questions, I gave him unvarnished answers. I have no idea if we will ever get to a term sheet, but all 3 of these folks are pretty serious. The chances of me closing at least one are good, my chances at 2 aren't bad, and all 3 is realistically possible.

Questions need answered, proposals written, term sheets negotiated, etc. but there is money out there for this, its just a question of finding it. It seems very random.

 

[ATBackPackin]

Just out of curiousity.......wouldn't having the ability to fire two rounds simultaneously, out of the same weapon, take it out of the realm of semi-auto? I honestly do not know which is why I am asking.

Shawn

 

[RobV]

No, it shouldn't.... one bullet per trigger pull.

 

[Sam Cade]

Just out of curiousity.......wouldn't having the ability to fire two rounds simultaneously, out of the same weapon, take it out of the realm of semi-auto?

Nope. It is "2" firearms. One shot per pull of the trigger.

this weapon does NOT resemble a SBR, as defined by US Code, Title 18, Part I, Chapter, Sec. 921

What you are missing is that double guns DO exist and the ATF has already decided about their status.
Each individual firearm must meet the legal definition.

So your stock mounts 2 glocks, the rearmost glock is fitted with a 16"+ plus barrel. It is perfectly kosher provided that the OAL is now over 26".
The front mounted glock becomes a SBR however since it is still using a factory length barrel.

Remember *2* firearms.

 

[Vector]

...i have 512 friends on F.book and not 1 helped me shovel my driveway.
just saying that what people say there and what they do may be dissimiliar.

---------

I always get a kick out of people who mention how many Facebook "friends" they have, almost like it shows how popular they think they are. In reality most of the people on FB are not true friends.
I myself do not have an account because I believe in privacy and am not narcissistic enough to need the adulation of other quasi acquaintances.

As to the OP, I guess any help might be tough to come by in this current anti-gun hysteria/environment.

 

[barnbwt]

I'd point the OP to the NFA forum for more qualified/experienced legal advice on the device. Like I said earlier, SBR isn't the end of the world (hell, those little ZIP gun doohickeys are selling and have no purpose but to be mounted as an SBR) but it will affect your marketing strategy and markets. Something to be mindful of for your business plan/pitch.

Anyone know if this thing with two lo-cap mags would be legal in Canada? I know they have a shorter SBR requirement (or is it no SBR length? ) but stringent mag capacity limits, and this could be a way to negate some of that imposed disadvantage for home-defense use. If available as a non SBR (side by side ) it would be a boon to sad places like California and New York, where the limits tend to be on "ammunition feeding devices" themselves, and not the gun's total accessible capacity (because butt stock shell holders for Fudds would be banned ). Like said earlier, the two firing mechanisms are legally separate firearms under one name/serial.

Since crooks can easily drill out the pop rivets used to limit capacity up there, it is very possible for a low-cap law-abiding homeowner to be assaulted by someone with a full capacity--the latter more vulnerable during frequent reloads.

TCB

**picturing a guy loading Glocks into the frame instead of magazines...New York Reload!
**thinking of a guy sawing off one of his SxS barrels

 

[Sam Cade]

Anyone know if this thing with two lo-cap mags would be legal in Canada? I know they have a shorter SBR requirement (or is it no SBR length? ) but stringent mag capacity limits, and this could be a way to negate some of that imposed disadvantage for home-defense use.

Canadian semi-auto rifles are limited to 5 rounds. A full sized glock is a Restricted class firearm.

No idea about the legality of a CCU or similar or whether or not it would make the Restricted pistol into a Prohibited semi auto rifle.

 

[Aaron Baker]

No, I have people telling me their interpretation of the Law, based on their experiences and hearsay... and Sam was kind enough to quote a FAQ about the law, after you wrote that... but the only actual law that was actually quoted, was the law I quoted to you, which is US Code, Title 18, Part I, Chapter, Sec. 921.

You have people telling you their reading of the plain text of the law. And at least some of those people are attorneys. (I know this because I'm an attorney, although I'm not forming an attorney-client relationship with you, which is why I suggested getting a tech branch letter.)

Let's look at 26 USC Section 5845, where "short barreled rifle" is defined. (The section you're reading just restates the definition.)

For the purpose of this chapter—
(a) Firearm
The term “firearm” means
[...]
(3) a rifle having a barrel or barrels of less than 16 inches in length;
(4) a weapon made from a rifle if such weapon as modified has an overall length of less than 26 inches or a barrel or barrels of less than 16 inches in length;

As you can see, there's more than one way for a firearm to be a short-barreled rifle. It isn't a matter of having to meet ALL the parts of this section. It's an "OR" proposition. EACH of these things constitutes a "firearm" within the meaning of the NFA. (When the National Firearms Act defines "firearm," it isn't referring to all firearms as we normally define that term. It is referring to the firearms that require a $200 tax stamp. Again, not something you'd necessarily realize if you weren't a lawyer who was familiar with the NFA.)

Under the first subsection, your rifle is a short-barreled rifle if it has a barrel under 16 inches in length. Using the normal methods of statutory interpretation that lawyers are trained on, this means that it doesn't matter if you have a barrel over 16 inches if you have another barrel that's 6 inches. If you have ANY barrel under 16 inches, it's an SBR.

The second subsection says ff you modify a rifle, it can't be less than 26" OR have a barrel less than 16".

As applied to your firearm, you have a barrel that's less than 16". That makes it an SBR. I know you want to stop discussing this aspect of it because you're excited about the idea of investors and less excited about the possibility (which seems remote in your mind) that your idea won't be commercially viable because it's an NFA firearm. I think you're in denial, frankly. Talk to the ATF or an attoney well-versed in the NFA before you get too deep into funding a project that very few civilians will buy.

I have my own opinions about whether your project has commercial viability regardless of its SBR status, but I'm not here to offer you opinions on its viability because that's not the question you asked. Although you also didn't ask whether you'd created a highly-regulated NFA firearm, I felt you should be aware that you had, since that directly affects the funding availability from investors.

Aaron

 

[gym]

Here is an idea, use facebook as a platform for pro-2A rights, that's what I use mine for. I only allow a few friends to join, but it's open to the public. There are hundreds of people who suddenlly want to befriend you, but you can just keep it open to the issues that you feel need a platform, like Rescue animals, and Guns.
I post the latest pro gun news, and NRA stuff, along with any critisisms of the current policys. Also the latest gear that I happen to like.
Just a thought, it's just another platform to get out the word.

 

[RobV]

>ATF has already decided about their status.
Each individual firearm must meet the legal definition.

Sam, I swear I don't mean to sound so argumentative, but can you please show me where? The Firearms Blog wrote a little piece on the NEDG and conversations sprang up everywhere about it, and they always start out the same way, and everyone is alway basing their entire argument on a strong supposedly factual statement, but no one can ever point out their source for this information... which turns the whole dialogue into one like this one where it's about who can win, instead of who is right.

>You have people telling you their reading of the plain text of the law. And at least some of those people are attorneys. (I know this because I'm an attorney)
Then as an attorney, you should know to be more precise in your wording, because you said people were quoting the law... and just because you are an attorney doesn't mean anyone else in this thread is, so you should say and 'at least one', instead of 'some', because that presumes I have multiple attorneys telling me their interpretation of the law, instead of just you, which may or not be the case... and if it's NOT the case, and you are wrong, then you are just another point source for confusion on the subject, people will point to substantiate their own flawed arguments. And this really goes double for you, imo, since you brought up that you are an attorney, but you aren't even offering this as a legal opinion, by your own admission... which means really all you are really giving us is just your personal opinion, which I do thank you for, even-though I don't agree with you.

I also already stated earlier the only opinion that should concern me/anyone is the BATF's opinion, at this point, and further discussion rehashing the same points over and over are boarding on being off-topic, since I've said multiple times that I have plans to write the BATF in the very near future about this (now that they sent me their address) AND that I vehemently agreed with you that the SBR issue is critical in understanding the scope of the market, which is obviously a key factor in any investment decision.

...so can we now let the SBR issue rest? There will be no correct answer until the BATF replies, anyway. If I'm wrong, the civilian version will get two 16.1" barrels, and those that want to get a stamp can saw it off

I know it's getting really hard to tell, but the title of my thread is 'Where to find Angel investors interested in a small firearm related startup?'

>this could be a way to negate some of that imposed disadvantage for home-defense use.
Right. That's part of the charm That's one of the things we are looking at now.

 

[Sam Cade]

Sam, I swear I don't mean to sound so argumentative, but can you please show me where?

I've seen half a dozen letters first hand dealing with mounting a "Masterkey" type stockless shotgun.

15 seconds on google gives me an ATF letter that directly answers the question.

Qs 30,31, 32 and 33.

 

[Aaron Baker]

Yes, the only opinion that matters is the ATF's. Although I am not your attorney, I am an attorney who has studied the National Firearms Act and the ATF's interpretation of it. My opinion (however you want to classify it) is that, given my study of the statute and the ATF's previous opinions on similar configurations (like the one Sam posted), your proposed firearm is a short-barreled rifle.

I know you don't like my opinion, but it still seems like you're sticking your head in the sand in regards to what the statute actually says and the interpretations the ATF has made of that statute.

Until you get an answer from the Tech Branch, it is my personal opinion that you're getting ahead of yourself looking for investors. You don't know what you're asking someone to invest in. Sure, you know what the physical item is. But you don't know if this is the next big thing in tacticool gadgets available to Joe-Bob the Average Firearm Gadget Buyer or if you're trying to sell a gadget that will only be available to civilians willing to pay a $200 tax stamp and to the hard-to-penetrate military and law enforcement market.

I really am not trying to be a jerk. I'm trying to give you a head's-up on a serious issue that will affect your funding efforts. To be frank, I think your invention is "neat" but attempts to solve a problem that doesn't exist. The military and law enforcement use fire teams and back-up officers to keep fire on a target while others are reloading. They practice fast magazine changes and changing magazines before they're empty. They aren't likely to adopt a new firearm.

Furthermore, one of the benefits of magazine-in-grip setups is that you can bring the magazine and your grip hand together in the dark or without looking. Despite the magazine-in-grip setup of your firearm, you eliminate that benefit by requiring the off hand to reload into a magazine well that isn't where you hand is. I think the awkwardness of reloads guts your argument that you can keep a loaded firearm on target.

If your firearm is more of a gimmick gadget than a solution to a real tactical problem, then you're hoping for a civilian market. That market is tiny if it's an NFA firearm.

I'm sorry. I feel like I'm being a jerk despite my best attempts not to. I guess that's what happens when you open your idea up to criticism by asking the internet where to find investors.

Good luck with your endeavor.

Aaron

 

[waterhouse]

I have no answer for your investor idea, but please remove your prototype picture of your SBR until the ATF lets you know that it is an SBR.