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Anyone used Crowdfunder to raise capital?

Curious about this platform, especially for tech companies.

11 Replies

Tom Collopy
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Tom Collopy Entrepreneur
Fiduciary at Securus Inc.
Alex, I'm an investor in Malartu (Malartufunds.us). You might want to check them out. Tom
Sally Outlaw
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Sally Outlaw Advisor
Co-Founder & CEO, peerbackers.com and Worthy, author "Cash from the Crowd", Contributor Entrepreneur Magazine
Ok so I know this platform intimately. Not only have I used Crowdfunder for my clients but I had my own funding platform for 4 years so I know how these sites work. Here's the deal - while Crowdfunder is one of my favorite platforms (along with Angel List) in terms of design/user experience please know that it is only a tool...you as the venture owner still have to drive all the traffic to your profile on the platform. All these platforms promote their "thousands of registered investors" but most every platform (Crowdfunder included) asks for additional compensation to market to those same investors - usually in the form of a fee or in warrants granted in your venture. And usually you have to qualify for the marketing opportunity by already having a significant % of your funding in place to be promoted. So, in summary, the platforms are great tools but, just like rewards-based crowdfunding such as Kickstarter, you have to properly prepare & market your campaign, garner significant support and have a compelling product or service to offer before you can expect any capital from sources you do not know to flow your way. Another strong financing option would be to look into Intrastate Crowdfunding in your state (almost half of the states have this) as well as my new favorite funding option Regulation A+ - if your company is in the proper growth stage for this capital choice. Please understand you need a budget for raising money (for legal, platform fees, marketing, PR, creating a video, etc) - otherwise it will most likely be tough to get the traction online you are seeking. There are many new ways to raise as a result of the Jobs Act - and in fact it is the best time in decades to be an entrepreneur seeking capital - you just need to navigate the path that is best for your business.
Alex Eckelberry
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Alex Eckelberry Advisor
CEO at Meros.io
Sally, this is great feedback.

Actually, we have plenty of potential investors, we are just looking to have a place to send them to. Many are smaller investors. I'm happy to stick with accredited only, but there's a few non-accredited who would like to get in, and I was hence curious if the Jobs Act provisions would help them as well. If not, that's fine, I can stick with accredited only.

I just don't want to deal with all of it with individual agreements, small dollars and a messy cap table, so I'd like to just have a place where they can go and invest easily, ideally resulting in one line on the cap table.

I haven't been able to figure out how to make Angelist work in this regard, so if there are other options, I'm wide open.
Tom Collopy
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Tom Collopy Entrepreneur
Fiduciary at Securus Inc.
Malartu is designed to aggregate investors in the way you are looking for.
Alex Eckelberry
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Alex Eckelberry Advisor
CEO at Meros.io
Tom, I went to the Malartu site but it really doesn't appear to be functional.
Tom Collopy
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Tom Collopy Entrepreneur
Fiduciary at Securus Inc.
Alex, They are live funding companies. I'm copying Jon Spinney of Malartu, he should be able to help you. Jon, Alex is having trouble with the Malartu site, could you help him out? Thanks, Tom
Sally Outlaw
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Sally Outlaw Advisor
Co-Founder & CEO, peerbackers.com and Worthy, author "Cash from the Crowd", Contributor Entrepreneur Magazine
Alex - If you already have some investor interest then a portal can be a good way to aggregate them - there are multiple ones that have been around awhile and are trustworthy such as Crowdfunder Angel List, Fundable, WeFunder, Microventures, Dealflow, etc. There are also niche sites such as Circle Up (consumer/food focus) as well as white label software that allows you to raise on your own site instead of an existing portal...so the best path depends on each venture's circumstances. In your case if you want to include non-accredited investors you are at a slight disadvantage as that means you have to raise under RegD506b instead of 506c (which allows for general solicitation but prohibits non-accreds) - that means you can't take advantage of any of the promotional tools a portal such as Crowdfunder offers. Curious why Angel List did not work for you if you already have investors you could send there? Also - since you are open to including non-accreds have you considered either using the Intrastate Crowdfunding Exemption (if your state has it) or the new RegA+?
Alex Eckelberry
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0
Alex Eckelberry Advisor
CEO at Meros.io
Sally, as I said, I was hoping to give people one-click access to an investment. Angel List only seems to do that if your company is being invested in by a syndicate (e.g. "invest online").

I am largely indifferent as to whether or not non-accredited investors are included; if this is more of a problem at this juncture, I'm fine sticking with accredited.

Thanks for the great advice.
Jose Bohorquez
0
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Jose Bohorquez Entrepreneur
Technology Entrepreneur
Alex: you shouldnotbe indifferent to whether your investors are accredited or not. It's a very big deal. There are lots of good resources online describing why it's a terrible idea to fundraise from non-accredited investors. For example:
https://www.cooleygo.com/can-you-raise-money-from-unaccredited-investors/
http://www.startuplawblog.com/2013/01/14/cant-i-let-non-accredited-investors-in-my-round/
Alex Eckelberry
0
0
Alex Eckelberry Advisor
CEO at Meros.io
Jose, I'm well aware of the issues vs 506b vs 506c. You're taking the wrong definition of "indifferent". I am not "indifferent" in that I don't care. I'm indifferent to whether ultimately we raise capital through accredited vs non-accredited.

At this point, we are hard in the camp of 506b and that's the end of it.
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