Dear ,I have been raising funds for technology startups for the last fifteen years. A lot of it, but honestly, I don't think anyone enjoys the process.
At this point, I like to share my experiences for free with the broader entrepreneur audience through articles and classes. Despite my limited writing skills, I hope that my experiences, both good and bad, might help other entrepreneurs along this long, frustrating journey.
I am working on an article about my experience funding on WeFunder for Entrepreneur.com. I would like your input and maybe quote you or your company. What are your best practices? What did not work? How can someone else benefit from your experiences?
I would be very thankful for your feedback and maybe an idea of how your experience in Equity Crowd Funding has been so far.
Here it goes. I am genuinely not a writer, nor is English my first language.
I hope you have some fun with it; any feedback is welcome.
Best Julien
How to use Equity Crowdfunding to raise money for your Impact Company!
Equity Crowdfunding offers the most cost-effective pathway to legal fundraising. Over are the days of enormous upfront legal costs and building massive databases. You have to spend money to make money- at least in early-stage investment is no more, and that is amazing.
Just think about it, in 2012, Oculus Rift closed a Kickstarter round of $2.4 Million. Two years later, Facebook bought Oculus for $2 Billion. If those Kickstarter backers had invested instead of donating, they could have had a 154x return on their investment. Investing in multiple startups in times of massive disruptions like today is creating some of the best investment returns.
Equity Crowdfunding will change the way funds are raised for startups in the United States.
It is not easy to find investors to solve real problems on a global scale. Many top VCs like Andreesen Horowitz and Kleiner Perkins are not even touching clean technologies anymore. It takes capital a long time and conviction to bring solutions to a global market. Solutions are needed to urgent problems such as feeding a future population of 10 Billion people. Some technologies don't lend themself to VC investments; maybe they are just a great business but don't have the proper IP protection or quick scalability of an app. Venture Capital is ultimately only the solution for a small percentage of startups- so what else can you do?
As an Entrepreneur, I like trying things out, but I'm not too fond of fundraising. No one likes asking for money- that is the truth.
I have become pretty good at fundraising since my first fundraising attempt in New York for a Restaurant about 16 Years ago. I have raised or consolidated at this point about 160 Mil. USD in Europe, the UK, and the USA. By the standards of my native Germany, that is huge. But that does not mean that I like raising money. The US is the best place to raise capital for me. No doubt!
Working with entrepreneurs worldwide, they often underestimate the time, money, and effort it takes to find close investors. Most companies fail at it sooner or later. Even if they make it, they lose the company along the way. Doing an old school roadshow would take lots of meetings, expensive places, introduction, rejection. The worse part is, it takes you away from building a fantastic company.
For good reasons, especially in the United States, massive protection mechanisms are trying to stop people from defrauding uneducated investors. One of the most important regulations to know is the ban on General Solicitation. It is illegal for you to post on your website, Facebook and Instagram that you are raising money. The same is true for any security, even your crypto token.
So how can you get people to invest in your business if you cannot tell anyone that you are raising money? The truth is, until recently, it would simply cost you a lot of money. Maybe only 10-15.000 for a Private Placement Memorandum that lets you approach accredited investors. A full prospectus for a public offering will easily cost you over one hundred thousand. Everything else, honestly, is probably illegal in the US and will bite you later in life.
Out of curiosity, our team at EX Venture set up a campaign on an Equity Crowdfunding Site named WeFunder. There was zero expectation, and I wrote to core information in one evening trying to make the waste-to-energy solutions that we have been working on for a decade as easy as and engaging as possible. We created a little intro video talking about our technology and about what drives us. At this point, we went online with a so-called "Test the Water Campaign," which is a legal description of a pre-crowdfunding investment round marketing. At this point, you can only reserve a spot in our round but not invest yet.
The communication with WeFunder was flawless; we had set up a new US holding company just for this purpose. All we needed was a Financial Balance sheet from our Accountant, and we could start providing information for the filing with the SEC.
We did not set any budget aside for a marketing campaign. Our team had to rely on our in-house marketing strategies. Previously we have built a massive LinkedIn network and use articles to get the word out. At this point, we had spent only about 1200 USD on the entire company setup, balance sheet, and we were sending info out to investors. Covid time has been challenging for many companies. Still, if your business depends on building power systems in different countries all over the globe with engineering staff onsite, the last 18 months have been a disaster.
The first positive effect we saw was from our existing investors, who started re-engaging. Suddenly we had to market again, which is getting people excited, not just investors but also supporters and prospective customers. The team of Zero Carbon has worked hard to be awarded numerous government grants, so we did not need to go out and raise massive money, so our needs were too big for family and friends and too small for an institutional investment round. The first 100.000 USD came from our close circles- reinvigorated by the now growing campaign.
The most significant leverage we have found is coming from the existing WeFunder members. These existing members are searching the website or using the different newsletters to find interesting target companies. Within the first four weeks, we have added almost 500 followers to the campaign. Over 270 have already invested, which is only two days after the documents with the SEC have been filed. The campaign is now officially online.
While executing our raise, we got a big contract that might be worth up to 400.000 USD. We can now add almost 700.000 USD to our balance sheet. These additional funds make a big difference for our team.
It is not only the capital; it is also the support. We have received over 100 support notes from our investors; people are following the campaign. After years in the laboratory trying to come up with the best possible solution to turn ocean waste into energy, finally, someone recognizes the effort and sacrifice that went into this development. This investment is creating the foundation of a company that probably will be worth a lot of money soon.
Looking at the Return on Invest, this has been the most cost-effective, efficient raise I have ever done in 16 Years as a professional fundraiser. It bridges the gap that you often have in early-stage investments, where the amounts are too small to be attractive to institutional investors. Equity Crowd-Funding is a true game-changer for anyone raising funds for their startup wherever you are in the world. All you need is a US company, an inspiring idea, and the power to find the right supporters.
BOILERPLATE:
Julien Uhlig is CEO of EX Venture, a leading online impact investment platform connecting companies to a top global investor pool. Julien has raised or consolidated hundreds of Millions of Investment Capital in Europe, the UK, and the United States in his career.
Currently, Julien also serves as CEO for Zero Carbon Inc, waste to energy technology, and an advisor to 27 German Government Funded deep technology funding projects in all fields of Sustainability. In the past, he has served as CEO for Venture-backed agnion technologies Inc., Entrade Energiesysteme AG as well as arensis Inc.
Julien has been featured globally in about 50 TV appearances from Germany to China, Japan, the United States, Italy. Highlights include CNN Business, Al Jazeera, Business Rockstars, Los Angeles Business Journal, Die Zeit, RAI Televisione, Japan Times, Wirtschaftswoche, Mashable, and New York Times. He was a finalist for the E&Y Entrepreneur of the Year Award in Los Angeles, Best German Technology Product 2015 (German Ministry of Economics), Fast Company "Most Innovative Companies 2018," Red Herring Award Best of Europe, MTB Best European Scaleup (Silicon Valley) as well as three times listed in INC. 5000. As a speaker, Julien has presented globally among Schneider Electrics, The German Ministry of Economics, The Energy Agency of North-Rhine Westphalia, German Development Agency, Nexus New Energy.
Julien lives with his family in Bali and works on investments in Ocean Farming, Alternative Protein, and Biopolymers. A father of three, Grandfather of one, born in Bremen (Germany), Julien teaches free entrepreneurship classes about resilience. Julien also is the manager and founder of SENSES, the most successful live-music performance series in Bali at the W Hotel.
Julien Uhlig, CEO EX Venture, and ZERO CARBON INC.
EX VENTURE NIGHT COMING SOON
We are Super Proud to announce the first Round of Co-Hosts of EX Venture Night, "Best of Europe 2021" This is the largest Online-Investment Event for Impact and Sustainability Companies.
We will be joined by:
Renat Heuberger, CEO of Southpole AG
Giancarlo Savini, Investments & Partnerships Director at Honeywell
Gerard Reid, Co-Founder of Alexa Capital
Remy de Tonnac, ETF Partners
Craig Douglas, SET Venture Partners
Matthew King, Valhalla Ventures
Steven Berkenfeld, Form. Barclays Bank
EX Venture Night will be an Epic Event!
You can sign up for free right here! EX VENTURE NIGHT ON LINKEDIN
Check Out our Past Attendee List- Yeah it's Everyone!
EX VENTURE NIGHT EUROPE 2020 -5800 Attendees
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