Equity Crowdfunding Brings Greater Equity To Funding
This post was originally produced for Forbes.
You can download an audio podcast here or subscribe via iTunes or Google Play.
Women and minorities have traditionally been underfunded in the venture community. Two years since the implementation of the Security and Exchange Commission’s Regulation Crowdfunding, data is beginning to show a shift.
Republic CEO and co-founder, Kendrick Nguyen, observes, “If you look at the number of women founders who represent almost 50/50 of entrepreneurs in the U.S. and the venture capital that goes to women founders is in the single digits in certain years and hovering around 10 11 to 14% in some other years which reflects a great inequality. And on our platform today as you know some 45 percent of capital invested on Republic has gone to teams with a women founder.”
With respect to minorities, he says that 30 percent of the capital raised on the Republic crowdfunding platform goes to founding teams that include an African American or Latino founder.
If these trends hold over time and across other platforms, the long-delayed implementation of the 2012 JOBS Act could have just the effect intended: job creation.
Ofo Ezeugwu, CEO and co-founder of WhoseYourLandlord, successfully completed a crowdfunding round on Republic in April. He says Republic was helpful for three reasons. First, they promote diverse entrepreneurs with tags on the listed offerings indicating a female founder or a black founder. He notes, “There’s pride in having the tags on your campaign.”
Second, he says, the team at Republic works hard to help campaigns succeed. “They set up conference calls, will retweet your posts and will listen to and help you adjust your strategy through the whole process.”
Kendrick Nguyen, Republic CEO
Third, he says, “It feels like they are creating a knowledgeable, positive movement in the equity crowdfunding space.” He describes it as a “platform of today.”
Ajay Yadav, CEO and Founder, Roomi, who also completed a funding round with Republic, confirms the value of the team. “The biggest benefit to me is that Republic have a dedicated and experienced team to structure the deals and successfully help you raise the money needed.”
Perhaps it is Nguyen’s immigrant roots that have inspired him to focus so much of his energy on improving access to capital for underserved communities. He came to the U.S. from Vietnam as a child.
A securities lawyer, before founding Republic, he served as general counsel for AngelList, where much of the team originated. He says Republic is part of the “AngelList ecosystem.
Republic features two different kinds of offerings: equity and crypto.
“On the equity side, startups can raise capital with our Crowd Safe instrument, giving investors the chance to earn equity or a cash return on their investment upon the company’s acquisition, IPO, or capital raise at a high valuation,” Nguyen says.
“On our crypto side, blockchain companies can raise capital with our Token DPA instrument, which gives investors the chance to earn tokens (or sometimes a cash return) if the company meets certain milestones or has a token distribution event,” he adds.
From the standpoint of investors, Regulation Crowdfunding marks a shift in securities laws that for 80 years had largely prevented ordinary investors from participating in the financing of startups.
Nguyen proclaims, “Through our online portal, we make investing in private companies easy and accessible to the general public, which naturally leads to more ideas getting financed, more jobs created, more investors seeing an ROI, and more value added to the overall economy.”
Click here to get my free webinar showing the three myths that hamper and the two keys for nonprofit crowdfunding success.
Never miss another interview! Join Devin here!
Devin is a journalist, author and corporate social responsibility speaker who calls himself a champion of social good. With a goal to help solve some of the world’s biggest problems by 2045, he focuses on telling the stories of those who are leading the way! Learn more at DevinThorpe.com!
The post Equity Crowdfunding Brings Greater Equity To Funding appeared first on GoodCrowd.info.