Thanks to crowdfunding, entrepreneurs have a new tool in their arsenal for raising startup capital. Columbus-based Fundable.com
is a crowdfunding platform that focuses exclusively on startup companies.
“We’re the first crowdfunding platform to support rewards and equity-based funding [specifically for startups],” explains founder and CEO Wil Schroter. “We help startups raise capital by connecting them to a large network of potential backers who pledge money toward their project.”
Startups must complete rigorous requirements to be selected for the site. “They have to create a profile, including a pitch video, explain their goals and state the target amount they’re seeking. Fundraisers run from 30-60 days, and they must meet or exceed the stated goal or no funds are collected from the backers."
Schroter explains that, “As of right now, you can’t actually publicly offer equity to non-accredited investors.” The reason is because the Securities and Exchange Commission (SEC) has yet to provide guidelines for the new JOBS act.
Instead, backers receive gifts. “We’re focused on value for value. If you’re asking people for money, you have to provide something in return that’s of value, which could be a product. Many backers appreciate the rewards but are also motivated by their connection to the start-up concept or to the entrepreneurs themselves."
Shroter points to a recent success story. “Training Mask, LLC, had a small, fast goal of $10,000 that it needed to ramp up production for its second-generation of a training mask that simulates working out at high altitudes. The money was raised in 72 hours, and backers will get a discounted new mask and a special t-shirt. The company now has the money it needs to move forward."
"There’s really no way to raise that kind of money in 30 days,” says Shroter. “We have a huge, interested audience.”
Fundable.com began operations on May 22, has 22 employees and 20 startups posted.
Source: Wil Shroter, Fundable.com
Writer: Lynne Meyer