Meet the Innovators: LiquidPiston
Editor’s note: this interview was recorded in April 2020 when LiquidPiston was testing the waters for a Regulation A+ offering, which is now live here.
As StartEngine’s new strategic advisor, world-famous investor and entrepreneur Kevin “Mr. Wonderful” O’Leary has been sitting down with the leaders of some of StartEngine’s companies in a series we’re calling Meet the Innovators. The first two installments saw Mr. Wonderful chat with the founders of Jet Token and Knightscope to discuss how equity crowdfunding has contributed to their growth.
The next edition of Meet the Innovators features Alec Shkolnik, CEO of LiquidPiston, which develops advanced rotary engines based on patented thermodynamic technology.
Reinventing the Engine
“We’re changing the way people build engines,” Alec said when discussing LiquidPiston’s mission. Standard combustion technology is over 150 years old and only converts about 15% of energy into useful mechanical work. LiquidPiston is reimagining the thermodynamic cycle to be more than 30% more fuel-efficient than the diesel engines we’re used to, while taking up only 10% of the space.
What does it take to reinvent the engine? “Two smart dudes,” according to Mr. Wonderful – Alec’s father and cofounder has a Ph.D. in physics, while Alec himself has a Ph.D. in robotics.
In today’s age, innovation is nothing without commercial appeal. “Are you getting traction in the market?” Mr. Wonderful asked. According to Alec, it takes a long time and a lot of money to bring a new technology like this into being. Having focused so far on developing and proving the technology, LiquidPiston is now planning to transition into the commercial market. In the last year, they’ve successfully completed four industrial partner pilot studies signed in 2019, which resulted in $1.1M of commercial revenue.
“It’s very tempting to start with the automotive market,” Alec said, as it’s the biggest market, “but it would take twenty years to penetrate.” LiquidPiston is instead focusing on smaller niche markets that still present multi-billion-dollar opportunities, but where big players aren’t chasing the same opportunity. Sectors like small power generation, auxiliary power for aircraft, and powering UAVs, among others. “We have partners established in each of these areas.”
Financing the Engine of the Future
And while innovation is nothing without commercial appeal, it’s also nothing without sufficient funding. Alec considers himself lucky that LiquidPiston was able to raise funding across venture capital, private equity, and grants from DARPA (Defense Advanced Research Projects Agency, the government agency responsible developing technologies for use by the military, famous for inventing things like the Internet and GPS as we know it).
More recently, LiquidPiston has turned to equity crowdfunding. “You’re a great example of transitioning from the traditional VC model to StartEngine.” Having done two prior rounds of equity crowdfunding before coming to StartEngine, LiquidPiston has developed important experience. But that’s just one of the reasons why they think their last Reg CF offering was oversubscribed within only nine hours.
“To our knowledge, it might be the fastest Reg CF in history,” Alec said. And while consumer-oriented companies benefit from existing brand awareness, Alec believes B2B companies can have just as much success in equity crowdfunding, as long as they communicate a clear value proposition to investors. “We can put up a picture of our engine against a diesel engine, and you see that 10x reduction in size. People understand what we do in 30 seconds.”
As far as the differences between venture capital and equity crowdfunding, Alec added that crowdfunding allows good ideas to come out by democratizing the process. “When you walk into a VC office, you’re forced to work with one or a few people and it’s a very different dynamic… In the VC world, people chase a very narrow set of ideas.”
Not to mention StartEngine’s expertise. “The process at StartEngine was smooth, professional, they made it seamless. But they’re also very detail-oriented, they really care.”
LiquidPiston proves that even companies that have found success with “traditional” fundraising channels like venture capital can still find benefits with equity crowdfunding.
This testimonial may not be representative of the experience of other customers. This testimonial is no guarantee of future performance or success. Kevin O’Leary is a paid spokesperson for StartEngine. View the details here: https://www.startengine.com/17b
This Reg A+ offering is made available through StartEngine Primary, LLC.
This investment is speculative, illiquid, and involves a high degree of risk, including the possible loss of your entire investment.