In case you aren’t up to date on this week’s crowdfunding news…
Monday, March 15th was the official “opening bell” of the new era of Crowdfunding.
Why? Companies can now raise up to $5m under Reg-CF…
And we’ve already seen multiple companies come out with a bang this week.
But the one that caught my attention was a company called Gumroad – a startup that helps creators sell their work online – who secured the full $5m in commitments in a single day!
Up until this point, Gumroad has raised more than $8 million from investors, including Kleiner Perkins, First Round, Max Levchin and SV Angel, as well as others, since 2011
The increase might not turn heads in a world of $90+ billion valuations, but Gumroad Founder Sahil Lavingia thinks the new rules could revitalize a path to raising capital for venture capitalists and founders alike.
Unaccredited investors — whether its users, friends or non-accredited investors — could become the new limited partners.
If all goes well, Gumroad will continue raising via crowdfunding on an annual basis until it goes public.
I don’t want to say “we told you so”…
But we here at Equifund have been talking about this for the past 6 months.
Personally, I think this week is the beginning of the end of how traditional seed stage investing has been done for the past 25 years…
And even though most VCs aren’t paying attention to what’s going on in the equity crowdfunding arena, I think they should be terrified of our ecosystem.
Because no founder wants to deal with the dog and pony show that is chasing VC money when they can go straight to the crowd…
Especially when founders now have the opportunity to use a new growth strategy I like to call the “Customer/Shareholder Flywheel”…
A marketing strategy that helps the company raise capital and acquire customers at the same time!
Stay tuned for more.
Jake Hoffberg – Publisher