Fundable helps entrepreneurs looking to build sustainable businessesBusiness Profiles — By Melanie McIntyre on June 11, 2012 at 8:00 am
Thanks to donation-based funding platforms, such as Kickstarter and IndieGoGo, and the passage of the JOBS Act, which allows companies to publicly sell shares of stock to anyone willing to back them, raising money for startups has gotten easier lately. And a new crowdfunding platform developed in Columbus will help even more entrepreneurs raise capital.
Launched May 22, Fundable supports a wide variety of endeavors− from a small business that needs a couple thousand dollars to a large-scale enterprise that requires millions.
“Since we cover both rewards-based models −you get a copy of the product or a personal gift from the founder in exchange for cash− as well as equity-based funding −you own some of the company− we can accommodate much larger raises and a broader array of companies,” says Wil Schroter, co-founder and CEO of Fundable.
To learn why Fundable is helping just a handful of startups at the moment, as well as Schroter’s predictions about the future of crowdfunding, check out the following interview.
The Metropreneur: How does Fundable differ from Kickstarter?
Wil Schroter: Kickstarter is a donation-based platform for creative projects. While you do see some commercial projects on the site, it’s not geared toward startup companies or businesses specifically. It’s mainly used by the creative community to fund single projects. Our focus is on entrepreneurs who are looking to build sustainable businesses and need to reach out to a larger base of backers that will include equity investors.
[M]: How many startups have been approved by Fundable thus far?
WS: We’ve had thousands of candidates that we’ve boiled down to a few hundred. From there we have launched a small handful. We want to start slowly so that the startups can make sure they get as much of their funding as possible before it gets too overwhelmed.
[M]: Is Fundable free to use?
WS: Our revenue model is simple: startups pay 5 percent of the final fundraise if they are successful. If they aren’t successful, they pay nothing.
[M]: Fundable has an advisory board. Why did you think an advisory board was necessary?
WS: We wanted to pull opinions from some very experienced entrepreneurs in all facets of the startup ecosystem. We’ve got the CEO of Startup Weekend, Marc Nager, who has already helped launch 17,000 companies through that program. We also have one of the founding partners at SecondMarket which has created the largest marketplace for selling equity shares. And, of course, we have Dave McClure who has angel invested in over 250 companies. So we are staying close to the heart of how startups are getting funded.
[M]: What do you predict for the future of crowdfunding?
WS: I think we are at the very early stages of crowdfunding. We’re still enamored with the idea that crowdfunding is new and that projects are getting funded. In the not-too-distant future, crowdfunding, in its various forms, will be how companies raise money. If you have an idea and you need money, you’ll post your idea online and begin your fundraising campaign. The old way of hitting up a few investors or family members as the only source of capital will seem completely obsolete.
[M]: Is there anything else you think we should know?
WS: Our mission at Fundable isn’t just to reduce the friction in the fundraising process; it’s to increase the number of companies and great ideas that actually get funded. There are just under six million new companies incorporated each year in the U.S. alone. Imagine if there were 12 million. Think about how many jobs, new products, market innovations, and breakthroughs that could create. We want to be the catalyst for that vision.
To learn more about Fundable, visit Fundable.com.
To read seven more questions & answers about entrepreneurship with Wil Schroter, click here.