#title iii

Gloria Oladipo at The Guardian:

For many students of color, access to an equitable education is dependent on the initiatives and programs provided by the Department of Education. Among its various functions, the department provides targeted funding for low-income students, collects data on educational outcomes and investigates potential bias – essential functions that help underserved students. But such services stand to be disrupted or ended entirely as Donald Trump plans to dismantle the department during his second tenure. In addition to nominating for education secretary the former WWE executive Linda McMahon, who served on Connecticut’s state board of education for one year and has no other notable education experience, Trump has pledged to “[close] up” the department and “return” education rights to the states. Though Trump alone cannot eliminate the federal agency, as such an act requires congressional approval beyond a simple majority, experts have warned that any type of overhaul could disrupt the department’s critical roles, especially for marginalized students.

The education department dates back to 1867; the agency was founded to collect data on schools as states crafted their education systems (Congress abolished the department a year later, fearing federal overreach). In 1980, under former president Jimmy Carter, the department was reconceived as an executive agency with the purpose of ensuring equal education access in primary, secondary and higher education across all states. Historically, the department has overseen the implementation of federal civil rights laws in local school districts, such as the desegregation of schools following the supreme court’s Brown v Board of Education decision. Now, the department coordinates “certain services that states receive, protections, and accountability mechanisms”, said Wil Del Pilar, senior vice-president of EdTrust, an education non-profit. The department also “sets priorities” and can use funding incentives to encourage school districts to work around an issue. “[If] teacher diversity is a focus, [the department] can leverage federal dollars to create a competition for folks to apply for dollars to improve the diverse educator pipeline,” he added.

Investigating civil rights violations is a critical function of the department, carried out by their Office of Civil Rights (OCR). In 2023, OCR received a record 19,201 complaints, according to the department’s annual report, with 45% of complaints relating to sex discrimination. Amid an onslaught of legislation targeting transgender youth last year, the OCR fielded several complaints from LGBTQ+ students against their school districts. Eighteen percent of complaints dealt with race and national origin discrimination, including bullying and racist harassment from school officials. In one high-profile example, the OCR investigated the Jefferson county school district, Kentucky’s largest public school district, and found that Black students were punished more often and more severely than white students. As a result, the district is mandated to amend their disciplinary policies by March 2025.

Following an OCR investigation, the department can force a school to make changes by threatening schools in violation of civil rights. “Funding and enforcement go hand-in-hand,” said Rachel Perera, a fellow at the Brown Center on Education Policy at the Brookings Institute. “The threat of violating civil rights law is that you will lose federal funding.” Absent these checks, schools would have less incentive to comply with the law. Statistics from the department’s civil rights data collection not only provide insight into potential education disparities, including discipline rates by race, but they also determine what funding a school district is eligible for. Title I and Title III initiatives, which provide funding for high-poverty schools and English learners, respectively, are both dependent on enrollment statistics. Eliminating the department all together is an unlikely outcome, experts argue, especially as many of the offices within the department are themselves enshrined into federal law. Prominent Republicans, including former president Ronald Reagan, have attempted to eliminate the department, all to no avail.

[...] Under Trump, the department could be underfunded or further understaffed, and offices such as OCR already struggle to investigate an increasing number of complaints. Disenfranchised students, including students of color and those with disabilities, who rely on Title I funding, would be affected as Trump could make further cuts to the underfunded program. “About 90% of school funding comes from local and state sources, but 10% comes from the federal government,” said Perera. “That 10% is oriented towards poor communities, communities that are disproportionately of color, [where if] that money were to go away overnight, those schools would be in a very difficult position.”

“Ready to Rock: SeedInvest Expects to Launch First Title III Equity Crowdfunding Offers” Crowdfund Insider | By JD Alois

The Past.

About four years go, a monthly event called Mission Street Food was incredibly popular in San Francisco. After a while, the organizers decided they wanted to open a permanent, charitable restaurant called Commonwealth, and get members of the community to invest in it.

I was a huge fan of the idea. One share was $500, you got .08% of the profit as an annual dividend, and you got some gift certificates to boot. I signed up right away.

A few weeks later, I got a follow up email from Anthony Myint—that’s right, of Mission Chinese fame:

Poor dude. Accreditation is a thing that any wealthy investor type knows about, but for the layperson, it’s news: the USA has banned middle-class Americans from investing in higher-risk investments since the Depression.

In the end, Commonwealth opened anyway and is a wonderful, thriving restaurant. But I never forgot about the enchanting idea that I could back local businesses in my area, and really be invested, literally, in my community.

The Future.

Almost exactly four years later, Nick Chirls tells me about a new company he’s starting over coffee. He told me about new legislation being passed, the JOBS act, which includes a crowd funding provision, Title III.

Title III effectively lets anyone, poor or rich, put a percentage of their salary into investing in businesses. In anticipation of the bill, Nick founded Alphaworks, a new kind of funding platform aimed directly to support newly empowered communities find businesses and make investments.

There’s an incredible amount of work to be done: education, support, financial guidance, and compliance work. But as Nick described his vision, I knew I had to be on board. So I’m happy to announce I’ve joined as VP of Design at Alphaworks, alongside an amazing crew: Kristian Kristensen, Nick Barr, Rachel Troy, and Jennifer Patrick.

Crowdfunding has been popular for years, but as the Oculus Rift acquisition yesterday indicates, we need a new way for people to champion and invest in amazing products. I’m thrilled to be part of the progress.

If you’re new to the JOBS Act, or Title III, here’s some great intro articles on the subject.

Forbes: JOBS Act Title III: Investment Being Democratized, Moving Online

Harvard Law: Jobs Act Title III Crowdfunding Moves Closer To Reality

Crowdsourcing.org: Jobs Act, Title III: A brief update on what’s happening behind the scenes

Service animals in school

"Joey is a 5th grade student who is hearing impaired. Joey’s parents request that he be allowed to attend school with his service dog, Snickers. You learn that Joey’s teacher is severely allergic to animal dander. You are also aware that several students in Joey’s class are afraid of dogs. What do you do?"

Every once in a while you come across an opportunity that seems like a “sure thing.” An opportunity where it feels like you’re looking into a crystal ball – where you can see the future playing out before your eyes.

I felt that way back in the winter of 2005.

At the time, my “sure thing” was the yet-to-be-announced launch of the Apple iPhone. My crystal ball told me this was going to be Apple’s next big thing and would revolutionize the world of mobile phones.

The way to play this could’ve simply been to take a position in Apple. But generally, the upside potential of large cap stocks is limited; you typically won’t see big price movements – of, say, 50% or more – based on the launch of a new product.

So instead, I tried to find a small-cap stock that stood to explode if Apple launched an iPhone.

After months of research, I found the perfect opportunity.

I’ll tell you more about it in a moment, and about how it changed my fortunes.  But first I want to share with you my latest vision – my latest look into a crystal ball...

Smells Like... Money?

The vision I’m talking about relates to a privately-held business.  It’s called Aromyx.

Aromyx produces a technology that’s nothing short of revolutionary.

They’ve created a microchip that can detect, interpret and identify smells and tastes just like a human brain.  For example, let’s say a team of chemists is attempting to create a fancy new perfume for a company like Chanel.  They would put a drop of the new perfume onto an Aromyx chip, and almost magically, an image would appear on their computer screen – an “aromagraph” – representing the reaction of the human brain.

  Based on the aromagraph, the chemists would see how the brain’s reaction to the scent was similar to, or different from, existing scents on the market, and then make adjustments as needed.

  The real-world applications of a technology like this – not just for fragrances, but for consumer packaged goods, foods, beverages, and flavors – are enormous.  

  Currently, in order to test and create new products, companies spend roughly $37.5 billion every year on “human panels.”  Basically, they recruit thousands and thousands of people to participate in focus groups in order to predict how the world will respond to a new product.  That’s a time-intensive process, and costly! Aromyx not only provides a faster and more accurate tool – but at $300 per chip, it creates both a cost-effective solution for its clients, and a money-maker for itself.

This type of technology is the future of consumer packaged goods development – at least, that’s what my crystal ball says.

If the company can capture just 3% of the market, it’s a $1 billion business.

Aromyx is currently raising a round of capital from investors like you. You can see more about it on public fundraising platform, AngelList »

Pull The Trigger?

So to sum up the opportunity: an amazing technology, a multi-billion dollar market, and a company that is currently accepting investments. Should we write a check?

Not so fast!  We know first-hand how easy it is to get excited about opportunities like this and make emotional decisions.  That’s why we wrote The 10 Crowd Commandments, a free, easy-to-digest framework that helps you evaluate early-stage investment opportunity »

Let’s take a quick look at how Aromyx stacks up on the positive side of the Crowd Commandment ledger:

Market demand from paying customers: Although Aromyx’s product hasn’t yet launched, the Senior Vice President for Chemical Procurements from Proctor & Gamble (owner of dozens of brands including Tide detergent, Secret deodorant, and Crest toothpaste) said he’d “buy thousands of these right now” if the chips were available.

Straightforward business model: it costs $100 to make a chip and they sell it for $300. After subtracting the normal costs to run the business, what remains is profit.

Competition: While competition exists, Aromyx has over 29 legal patents – that will help them build defensibility.  

Strong management team: They’ve started and sold companies before.

However, our “Commandments” also give us reasons to be concerned:

While Aromyx has already received millions of dollars in government grants and funding, there aren’t any notable private investors involved – i.e., venture capitalists or angel investors who invest to earn a profit.  As we like to say here at Crowdability, it’s always good to “be a follower” in deals like this.  Following professional investors ensures that someone has negotiated competitive terms and done some serious due diligence.

Another concern is that they’re raising $2 million, but they don’t say exactly what they’ll do with the funds.  For example, will they build their team, sign up 10 new major customers, reach positive cash flow? If we invest today, what financial results should we expect?  They don’t say!  There isn’t a clear explanation in any of their materials.

So what should we do here?

My Crystal Ball

Maybe my experience with the “Apple Crystal Ball” can be of some assistance...

As it turns out, I was right about Apple launching their mobile device.  The iPhone has generated billions of dollars in value for Apple and its shareholders, and changed the entire mobile landscape.

But the stock I was so bullish on – one of Apple’s suppliers – didn’t fare so well.  The company was called Portal Player.  I say “was” for a simple reason: the company is no longer publicly traded.  Shortly before the iPhone was released, Apple announced that they would be switching to a new supplier.  It was “game over” for Portal Player, and “game over” for my investment, too.

Other than the fact that my “crystal ball” seems to have been momentarily broken, what lessons can we learn from my failed investment?

Well, for one thing, even though I was extremely excited about Portal Player, I followed my playbook for early-stage investing – an early set of rules similar to the 10 Crowd Commandments.  The most important rule I followed was this: don’t commit too much of your capital to any one stock!  Yes, despite my enthusiasm for Portal Player, I made only a small commitment to it.  I was diversified.

You see, when it comes to investing in startups and early-stage technology companies, there’s no such thing as a “sure thing.”  To protect yourself, you need to diversify, committing only small amounts of capital to speculative ideas like Portal Player – or to companies like Aromyx.

"More States Are Leading the Way in the Push For Crowdfunding" - CrowdFundBeat