Snapchat Shows us that Startup Funding has not Dried up, but Change has come to the Venture Capital Market.
As the CEO of the equity crowdfunding platform + early stage venture fund, Crowdfunder.com, I have a front row seat to the rapidly changing dynamics of Venture Capital.
On May 26th, Snapchat announced it closed a Series F round of $1.8 Billion, at a $20 Billion valuation, jumping $5 Billion from its Series E raise in March of 2015 and up $10 Billion from its Series D raise in December 2014. This valuation shows strong confidence from investors. Snapchat is currently #6 on the Forbes Unicorn list behind companies like Uber and AirBNB. To many readers unfamiliar with Snapchat, it may come as a surprise that it is so highly valued. What is this ghost app you keep seeing?
You came up with an idea. Started a business. Built an MVP and attracted users to the platform. You now need funds to scale. It’s time for your seed round. The success of your seed round will determine the success of the business. Follow these tips, to make sure you get it right the first time.
We are excited to announce the addition of Steven McClurg to our Executive Team. Steven will be serving as Chief Operations Officer of Crowdfunder and Managing Director for the VC Index Fund. He joins Crowdfunder after spending several years in Financial Services, most recently at Guggenheim Partners where he was a Managing Director working in Portfolio Management. Steven was previously an investor and advisor to Crowdfunder before joining the team. We sat down with Steven to discuss the move from Finance to FinTech.
Why did you make the switch to FinTech?
I noticed how regulations such as Dodd-Frank and DOL were disrupting the legacy financial services industry, from capital markets to investment banking to financial advisors. These regulations supported technological disruptions such as robo-advising and equity crowdfunding.
That said, I never planned to make the switch. I thought that I would work in Finance, particularly at Guggenheim, indefinitely. I saw an opportunity as an investor in FinTech, and decided to invest personally in a few different FinTech companies that I felt had resilient and passionate entrepreneurs, solid business plans, and a strong brand. I diversified across robo-advising, peer to peer lending, and equity crowdfunding. Crowdfunder had the strongest business plan and brand, along with great founders. The founders began to call me to get advice, and eventually we decided that we would be great partners to execute on the future of Crowdfunder together.
The long awaited Title III of the JOBS Act goes into effect Monday, May 16th.
With Title III comes the latest in equity crowdfunding laws that permit non-accredited individuals to invest in private startups and small businesses. Investing was previously restricted to wealthier accredited investors and institutions only.
Title III was originally viewed as a potential game changer for fundraising and access to capital, opening up a new and promising avenue for young startups seeking capital.
This week our CEO & Co-Founder, Chance Barnett, was invited to participate in The Milken Global Conference 2016. The Global Conference brings together some of the most innovative individuals who work to explore pressing challenges in financial markets, and various industry sectors such as health, government, and education.
There are many things that entrepreneurs can do to help be proactive during their fundraising process. As an investor myself, these are some obstacles I see many early stage companies face during their investment process.
Ignoring the Heart— We are sold with our hearts and unsold with our brains. In fact if you don’t grab me emotionally in the first few seconds and completely enthrall me, then I won’t ever engage my brain to determine whether it makes financial sense to invest. Ultimately you need to convince me both rationally and emotionally. Help me fall in love with you, and help me have faith in you, and I might give you a pass on the numbers and projections that don’t make sense. Continue reading…
Knowing when to start looking for investment and how to go about it is one of the most critical points in a startup’s life. There are several factors to consider in this process. Review this guide to better understand each step that is necessary when looking to secure investment.
Right Motivation — If you want investment because you value having new partners who can help you build the company bigger and faster than you could without them, then this is Right Motivation. Many entrepreneurs seek investment as a validation of their idea/company/self. If your motivation is to be validated, then you are on the wrong path.
Right Plan — Have a plan (or at least a plan B) that doesn’t require investment capital to succeed. If you don’t need investors’ money, you will have a much easier time getting it. Let’s face it, what partner in a healthy relationship is attracted to neediness?
Right Timing — There are times in your company’s lifecycle when investment will flow naturally. If the timing is not right, then your energies are better spent building the business. Building a business creates Right Timing for investment. Continue reading…