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This 3-Wheeled Super-Efficient Car Just Got A $33 Million Boost From Crowd Investors

The Elio is an interesting, affordable vehicle that has attracted legions of enthusiastic supporters before its release.

A few years ago, it was hard to imagine a vehicle like the Elio getting on the road, let alone attracting so much interest from customers and investors. The three-wheeled vehicle isn’t that sporty, it doesn’t look conventional, and it’s not completely practical. You need something bigger if you want to go on a long trip, or if you live in the countryside.

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And yet, 45,000 people have reserved Elios so far. And investors just pledged to buy $33 million of the company’s stock. The buzz around the Elio (price $6,800) shows people are changing their ideas of what transportation should look like.

Elio offered shares through StartEngine, a new crowdfunding site launched with the latest implementation of the JOBS Act. Rules approved by the Securities and Exchange Commission on June 19 allow companies to make “Regulation A offerings” for the first time. That means even unaccredited investors (i.e., ordinary people) can invest in startups as never before. Previously, investing in private companies was reserved mainly for accredited investors with at least $200,000 in income, or $1 million in assets.

To be clear, Elio hasn’t actually raised $33 million yet. The crowd investors on StartEngine have “expressed interest” in the offering, allowing Elio to file an application with the SEC to issue actual shares. When it has that within the next six weeks, it will be able to go back and ask for real money.

Paul Elio, who founded the startup in 2008, sounds pretty confident that the pledges will come through. For one thing, 75% of the investors are customers who’ve reserved cars as well. So they’re already pretty into the company. Elio, which is selling about 8% of equity, says some people might see the success of the round and decide they want to buy in more, not less.

Potentially, equity crowdfunding allows companies to close a loop between their financing and marketing efforts. “For the first time ever, companies can now convert their customers into investors who then become brand ambassadors for the mission of that company,” says Ron Miller, cofounder of StartEngine, which launched on June 19 as well.

“For a long time, the difficulty for startups has been in raising capital,” Miller, who’s started companies himself, says. “When we saw the JOBS Act, we saw the greatest advancement for entrepreneurship in a generation.”

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The car, which gets 84 miles to the gallon and has a stop speed of over 100 MPH, is due to launch in late 2016. Elio expects it to appeal to two separate groups. First, people who have a car already but don’t want to drive it in certain situations, like to and from work (“This is an ‘and’ vehicle,” he says). The second group is people who can’t afford a full car, like students and lower-income groups.

We’ll have to see if people actually want to drive the Elio, but the preamble is good. With 45,000 customers at $6,800 per unit, Elio already had more than $300 million in orders before it even started on StartEngine. Now it has another big vote of confidence.

related video: Does Your Car Really Need Four Wheels?

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About the author

Ben Schiller is a New York staff writer for Fast Company. Previously, he edited a European management magazine and was a reporter in San Francisco, Prague, and Brussels.

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