Equity crowdfunding – 6 months in

It’s been just over a year since Title III of the JOBS act passed, and the previously inaccessible world of investing has already transformed. Before Title III, only accredited investors, or high net worth individuals, were able to take advantage of most investment opportunities. Title III has changed that in two major ways: it has both opened the door for almost anyone to invest in the companies they believe in, and it also allows all kinds of companies, regardless of size, to raise money straight from their fans and anyone else who is excited about what they are doing.

It’s also been six months since Indiegogo delved into equity crowdfunding and launched our funding portal First Democracy VC with our partner MicroVentures. On one hand, it’s hard to believe that it’s only been six months, and on the other hand, it feels like we’ve been doing this forever. That’s because we’ve always wanted to. We launched Indiegogo with a clear mission: to help people bring their dreams to life with a passionate community of backers. We want backers to feel like part of the exciting process of building a business or launching a product, so we started out with rewards-based crowdfunding. Now with equity crowdfunding, people can actually invest in companies and share in their potential success.

These last six months have been amazing, and not just because all 12 of our offering companies thus far have reached their minimum goals, and together raised over $3M, but because, clearly, investors have been waiting for this. We’re incredibly proud that the offering companies on First Democracy VC have had the highest average raise on any platform. They’re part of of rapid growth in this new industry, with hundreds of other companies launching Title III raises since the regulations changed.

More than 3,700 people from over 50 countries all over the world have invested in our offering companies. Those are people like your mom, next door neighbor, 3rd grade teacher, and best friend. We’ve been so happy about the success of all of the equity crowdfunding campaigns not just because it’s a huge step for those campaigners in bringing their dreams to life, but because it’s shown us so clearly that equity crowdfunding is right for a wide variety of businesses in all different phases of their journeys. From the latest in hardware and film to the coolest restaurants and distilleries, to games of all kinds, there is something for everyone. These investors are giving entrepreneurs the social proof they need that their project is something that people want, which simply wasn’t possible before crowdfunding.

Take “The Field Guide to Evil” from Drafthouse Films, the distribution arm of Alamo Drafthouse Cinema. The film is the second in a series of horror anthologies from the producers of the “The ABCs of Death.” Their second film enlisted eight directors from around the world to cinematize the scariest folktales from their communities. Instead of tirelessly pitching their idea to big studios, Drafthouse Films wanted to do something different, and share the journey with their fans directly. Thanks to equity crowdfunding, they raised $500,000 in just under two months. Not only did they reach their maximum funding goal and were oversubscribed, they connected even more deeply with their community.

Republic Restoratives, the first women-owned distillery in Washington, D.C., ran a rewards-based campaign on Indiegogo to get off the ground before Title III passed, but they turned to equity crowdfunding to take their business even further. Just like The Field Guide to Evil, Republic Restoratives wound up with more interest than they could handle, and they were able to raise their maximum funding goal of $300,000 from over 600 investors. Pia Carusone, one of the co-founders of Republic Restoratives said that:

“We’re in this early stage, not quite startup, situation, and we’re going to need a lot more capital over the next few years. The equity model is terrific. It’s saving us from having to go out and give away a ton of the company to a VC firm, or take on debt through bank loans. It’s also this huge, built-in network of supporters – collectively between the two campaigns we have thousands of people who have invested in us and want us to succeed. These are customers.”

For Pia and her partner Rachel, their equity campaign has provided much-needed funding, but also an extended team to share the journey of growing their business, and a bunch of new customers ready and excited for their new products to launch, and perhaps more importantly, ready and excited to spread the word to their communities.

Much like Republic Restoratives, Darling Media has thrived thanks to their extensive fan community, who was hungry for content that empowers women and challenges the cultural expectations that confine them. In the words of Sarah Dubbledam, Founder and CEO:

“When I started Darling, I was 25 and didn’t have any money or resources to start a business, so I turned to crowdfunding—and that’s how Darling was born! Five years later, Darling is an influential platform, and now seeking to expand. Our audience has made Darling; they are the reason we exist, so I know they want to see us succeed and grow—which is why we’ve now turned to them to launch us into a new season of growth with Darling!”

Being able to share their success with the readers who rely on Darling for inspiration creates a true collaboration that wouldn’t have been possible without equity crowdfunding. Since they launched their raise on May 5th, Darling has raised over $74k from 147 investors to expand and create new and exciting content.

When we created Indiegogo, we wanted to bring people closer to the products and projects they love. We believe that bringing an idea to life is more than funding, it’s building a community around a shared passion. With equity crowdfunding, this community becomes a team. The early traction we’ve seen on our platform has proven that the industry is poised to grow, and that equity crowdfunding is a viable source of funding for companies of all kinds. There is momentum to continue improving it for investors and entrepreneurs alike, like current efforts to lift the $1M cap on Title III raises.  Since last May, your mom, next door neighbor, 3rd grade teacher, and best friend have invested $35M+ in Title III equity crowdfunding campaigns. We’re so excited to see this growth continue, and for the innovation it will bring.

Stay tuned as we have a lot more companies to invest in coming down the pipeline. Check out all the current companies raising capital and stay in the loop here.