There’s a new startup on the scene that hopes to help other startups take off. The company is called Fundable, and although it looks similar to Kickstarter, it operates on very different approach that takes advantage of the JOBS Act.
The bill, which was signed into law in April, has also been called the “Crowdfunding Bill” for its promise to allow startup companies to publicly raise money from anyone willing to back them. Fundable, in turn, provides a certified platform for businesses to seek support from anyone in the world in exchange for rewards and equity.
“Fundable provides the entire spectrum,” Wil Schroter, Fundable’s CEO and Co-founder tells us. “We provide everything from affinity and rewards as Kickstarter does, but, more importantly, we go into the more business-focused transactions such as equity and debt.”
As Schroter went on to explain, the Kickstarter model is effective for creative projects, but Fundable is trying to create a model for more serious startups who are trying to reach business goals. In other words, Fundable wants to create an access point that gives startups more options then they have had in the past.
“With Kickstarter, it’s all donations or rewards-based,” he said, “which means it’s either, here’s some money for an idea that I think is great and let us know how it goes; or maybe, here’s some money, and in exchange, you’ll allow me to get some version of the product - like a pre-sale.”
“That’s great for most projects,” he continued, “but when you get into startup company funding, you need a lot more options.”
The model of crowdfunding that Fundable adopts creates new opportunities for both businesses and investors. It not only allows businesses to receive funding from anyone in the world, but it also gives all investors the power to easily support something they believe in.
According to Schroter, there is an “extraordinary” need for startup funding. He believes that with more access to capital, the U.S. could as much as double the number of businesses that start each year.
“This access to capital will not only give more people the opportunity to start businesses,” said Schroter, “[but] it’ll inspire more people to say, ‘Hey, you know what? I had an idea I would’ve never thought of trying to make it a go as a business before, but now I will because I can raise $10,000 to get started.’”
“We haven’t even begun to scratch the surface for how big of an opportunity there is,” he added.
Just after the JOBS Act was passed, we spoke with Michael McGeary from venture capital firm Hattery Labs who told us that crowdfunding models would enhance traditional forms of funding. “Crowdfunding is not going to utterly change that system,” he said. “All it’s gonna do is make it better for more people to get more ideas to the marketplace faster.”
Schroter agrees with McGeary saying that crowdfunding will have a “huge positive impact” on traditional funding methods. As he explained, traditional methods currently make the riskiest investments, but with crowdfunding, that money can be preserved and used toward actual companies that are growing and not just on ideas.
“I think we’re going to fundamentally change how capital gets used,” he said, “and I think it’s great for everyone.”
Already, Elevation Training Mask 2.0 used Fundable and raised its goal within 72 hours. Schroter told us that Fundable talked with thousands of startups that needed to raise capital but settled on 5 specific ones to launch with. The selected companies include Bikedabs, Purge, Stamp TEG, Tackk, and uFlavor, all of which range from product to technology companies.
It chose a small number and wide range of startups in order to allow adequate time to focus on each one of them. For the most part, the initiative is fair game to anyone with a business idea, but Schroter did say that there would be some limitations related to reasonable goals and timeliness going forward.
Although the JOBS Act was signed into law, it is not fully enacted. The SEC is currently conducting its review of the new rules and could potentially change them. Fundable is hopeful it can execute its goal of equity investments, but in the meantime, it is operating on a rewards/donations model and working only with accredited investors.