New Impact, New Inclusion in Equity Crowdfunding
We’re launching Republic today, an online platform where everyone can invest in innovative, mission-driven startups curated by our team.
It’s a big step forward in the third wave of democratizing startup financing. The first wave began with reward-based crowdfunding portals like Indiegogo and Kickstarter, where people everywhere could help fund product development with a donation.
The next wave, known as Title II crowdfunding, sparked a breakthrough change. Connecting angel investors with founders, the online fundraising platform AngelList has syndicated over $350M into more than 1,000 startups since 2013.
Yet that second wave harnesses only a fraction of equity crowdfunding’s potential. Available to wealthy “accredited investors” only, it leaves out 97% of the US population, thereby limiting the opportunity for a fuller range of startups, founders and investors to engage with one another.
Today, investment in private companies leaves out 97% of the US population as potential investors.
Republic addresses that limitation. On Republic, entrepreneurs can access a vast new source of capital: investments from the general public. And everyone — from Main Street to Wall Street — can share in the potential success of innovative startups they choose to back.
This is a big step and it hasn’t come easily. After years of lobbying effort, angel investing became legally accessible to main street for the first time this year thanks to the approval of Title III legislation. It will take partnership and perseverance to convert this policy shift into a market reality at scale.
From Main Street to Wall Street, now everyone can participate in the journey of a new startup.
Why We’ve Taken on this Challenge
As a team, we believe passionately in the power of entrepreneurship, and that today is only a glimmer of the real opportunity ahead.
It takes money to help grow a kernel of idea into an impactful business. Yet, the flow of venture capital only benefits a selected few. The graphs below paint a startup financing system that is localized, focused on software startups, and biased against women and minority groups.
Who’s Getting VC Money?
Research shows what’s already clear: that traditional startup funding underserves many of the people and ideas that represent our country’s true potential.
The saying “talent is equally distributed but opportunity is not” may be true — but that can change. Innovations are gender neutral, and good businesses exist in all parts of our country.
Financing sources, too, should be equally distributed.
Republic’s Vision for Entrepreneurs
Opportunities await in gaps, and this gap is huge. For startups, Republic is a gateway to a vast source of capital, but that’s not all. Investment crowdfunding also presents a tremendous marketing opportunity, through which a startup can convert casual customers and supporters into loyal brand ambassadors. Indeed, angel investing is about building a support network as much as it’s about operating capital.
Imagine if you converted your casual customers and supporters into loyal brand ambassadors?
Republic brings together experienced angels, influencers and industry experts to help mission-driven entrepreneurs plan and execute a crowdfunding campaign. Beyond that, we’re here as a resource and a support network. The Republic team are intent on a single purpose of using our knowledge — ranging from growth hacking to coding to lawyering — toward easing the path for other entrepreneurs.
Republic’s Vision for Investors
For main street investors, investing is a powerful way to join an entrepreneur’s journey. Starting a company is one way to create impact and the potential for high returns, but not everyone can make that leap. With Republic, anyone can invest and share in the success of businesses they find compelling. Our goal is to ensure that Republic investors understand the risks and rewards associated with angel investing, and to present them with innovative companies that meet our criteria.
Starting a company is one way to drive impact you want to see in the world. Being an investor, backing a startup you believe in, is another.
Investing in startups is risky, but it’s more productive than minimal return gambles such as lotteries, which drained some $70 billion from main street America’s pockets in 2014 alone. If Americans directed a portion of the staggering $119 billion in annual gambling losses toward funding entrepreneurship and innovation, what change — and economic value — might be achieved?
This is the opportunity, and hope for the future, that Republic addresses.