We had a great time hosting Jonny Price, Director of Fundraising from Wefunder. We asked him to tell us a bit about his personal journey in the equity crowdfunding, about Wefunder’s special appeal to investors and founders, and about Wefunder’s current initiatives during the Covid19 crisis.
This is also our first podcast episode and we invite you to listen to it here:
Here are some of the highlights of our conversation:
It’s great to have you here Jonny. Before we dive into your activities at Wefunder I’d like to hear about your personal journey with equity crowdfunding.
So I’m from the U.K. originally, and started my career in management consulting over there with a firm called Oliver Wyman, did that for a few years and then came to volunteer at a nonprofit called Kiva. They are a non-profit crowdfunding micro lending platform. For example, they would be giving hundred dollar loans to a farmer in Kenya, that are being crowdfunded by foreign lenders lending twenty-five dollars each. I volunteered there for a few months and then got married to an American girl. So that brought me out to America full time in 2011. I ended up founding and leading the Kiva Zip pilot program, and over the next seven years we supported founders in Kenya and the US with about 25M$ and 0% interest loans. And then in early 2018, there was a CEO change at Kiva, which caused me to leave and come to Wefunder where I lead our fundraising team.
So you’ve been with Wefunder quite from the start, not long after the Jobs Act was approved in 2016.
Yeah, well Wefunder was actually founded back in 2012 and our founders helped to get the initial Jobs Act through Congress, which was in 2012. Then we went through Y Combinator in 2013. And then it wasn’t until May 2016 when regulation crowdfunding, which is the crowdfunding where anyone can invest in startups, became legal. And Wefunder has been the leading platform in the four years or so since May 2016.
Ok so that brings us to Wefunder. What makes you stand out as an equity crowdfunding platform? What is your unique offering for investors?
Yeah, that’s a great question. I’d say kind of two things. Firstly, the startups fundraising on the platform, and we definitely stack up well against our competitors. We have a number of Y Combinator alumni that raise money and we fund, for example. It’s nice that we have that network. We have four unicorn’s in our portfolio. We’ve also made some really exciting product changes recently that are going to significantly increase the caliber of companies that are turning to Wefunder, so investors already have a lot to choose from on our platform and that is going to increase even more.
The second advantage we have is our focus on our community of investors and founders. We are very, very committed to trying to cultivate community connections and add value. We think angel investing is really cool, and if it’s just about the money then we’re kind of missing out on something. So the tools that we’re building give investors space to look beyond just the financial investment, such as online events, perks and more. That’s kind of very central to what we’re about as a company.
So I’d say the kind of investors you mostly attract to Wefunder are not just looking to park their money somewhere, but are interested in creating a real connection to the startups they invest in, to the story, and to the founders, and want to follow up and help them succeed.
Exactly. That’s the aim here, is that, you know, if an angel investor invests in a startup they pull out their Rolodex, they’re trying to help that startup because if they can help them to grow, so that they’re investments are going to grow in value. We are encouraging investors to think about that and try to add value beyond that financial investment.
We also believe investors invest in domains they are passionate about. Ideally, you know, if you’re a scientist say in a field like oncology, and then there’s a cancer therapy startup that’s fundraising on Wefunder. You might invest in that startup because that’s your domain. You’re passionate about that. And also, then you’re probably more helpful to that founder because you have expertise in that name and you have an outlet.
“I like to invest in projects that help people. If I make money that is great as well” — a Wefunder investor’s note to a founder they just invested in. This is what we’re about.
— Wefunder (@Wefunder) April 30, 2020
So that brings me to the other question, which is a mirror question. What kind of entrepreneurs come to Wefunder? I mean, I know you are sector agnostic, so you have startups from different domains. But is there something in the attitude or the mentality of the founders that you encourage, or are there specific sectors where you see have more startups than others?
If you look at, for example, the percentage of venture capital that’s going to female led businesses right now or minority led businesses near us, or if you look at the percentage of venture capital that’s not going to California, New York and Massachusetts, 77% of all the VC investments in the US is in these three states. So I think if you’re if you’re a woman of color in Cleveland, Ohio, it might be challenging to access capital. And so we provide a platform that makes it easier for you to raise money from other women of color in Cleveland or get in front of our investor base.
And then the second piece is then startups that maybe the consumer facing or maybe they just would really get a lot of value from having 300 people investing them and bring that networks. So I do think that tends to be more of a fit for consumer facing companies. Such is Lost Spirit Distillery from L.A., that even in March 2020, raised a million and a half in a week, mostly from their fans and customers. Some companies are really exciting from a mission perspective, and are really about community building and enabling ordinary people and community to invest in them as well as rich people. Like Legion M, the most successful fundraising startup on Wefunder. They’ve raised 9M$ from twenty seven thousand people. Their whole ethos as a company is to democratize Hollywood. So just as we’re democratizing investing, they set out to democratize Hollywood. They’re investing in movies and they’re an entertainment company and they’re saying, why should you have to be a millionaire to be a Hollywood producer?
Obviously, we also do a lot of tech startups and especially like consumer facing tech startups like Cariboo is an example of a consumer facing app that raised millions of dollars with us last year. Everydae is a consumer facing tech company that just raised 1.2 million.
Do you have a lot of startups that have innovative technology on Wefunder?
Yeah, absolutely. So we have right now there’s a few biotech companies that are fundraising, for example, Beta Bionics is one of my favorite examples, that developed an artificial pancreas to treat people with diabetes. So they raised a million dollars on Wefunder a few years ago and they just closed a 63M$ VC series.
We’re in the midst of a crisis due to Covid19. A lot of businesses are under a lot of trouble trying to figure out what, you know, what’s life going to look like and what’s business going to look like after the crisis. We’ve discussed this on our previous chat, and I know that Wefunder is actually doing well in the past few months. I also know that you’ve been doing a lot to support entrepreneurs and take your own initiatives during this crisis.
Yes. So we launched a couple of programs, like low interest loans for small conventional businesses. We also launched our own accelerator of startups tackling the virus. We chose 12 out of 2,500 applications and we’re very, very excited about that.
Now over 2,000 applications to our Fight the Virus Accelerator. Truly inspiring to see the passion, creativity and brilliance of founders stepping up to beat this crisis. Still 174 minutes to apply: https://t.co/tm3Po9syly
— Wefunder (@Wefunder) April 4, 2020
Have you allowed your investors to invest in that accelerator in some way?
We have a dedicated fund for the accelerator which will be open for accredited investors on the platform. Potentially, some of the companies in the accelerator in the future might also launch a crowdfunding campaign on Wefunder and people will be able to invest in those companies individually. But for the moment, we’re focusing on accelerating that to fight the virus, either directly, or indirectly by providing solutions that are needed because of the virus, such as online learning.
Great. Finally, can you tell about any exciting startups that are fundraising right now on Wefunder?
I am not allowed to recommend individual companies according to the FINRA and SEC regulations, but I can say that we have a lot of great startups fundraising right now and I would encourage people to go to Wefunder’s website and browse through the companies there. You can search for sectors that you’re interested in or filter by companies that have raised the most money, and more.