This is an update to the Startup Investments story from last week. I find the concept of Crowdfunding very interesting. Until now, it was often difficult for a startup company to get the funding it needed to carry out its idea and create a successful business. Angel investors who could each invest $100,000 or more in a startup are out there, but for the startup founders, it was not always easy to find ones who would be interested enough to invest. For those who did decide to invest, the process required a lot of paperwork, agreements, legal reviews, etc. to put things in place.
Crowdfunding has turned the model upside down. A Connecticut-based company called LiquidPiston had an idea for a revolutionary design of a rotary engine based on the company’s patented thermodynamic cycle and engine architecture. The company needed $2 million to bring its idea to market. Rather than following the traditional model of seeking a small number of angel investors or venture capitalists, it decided to use crowdfunding at Wefunder.com. The company launched its campaign and in a relatively short period of time raised $2,188,466 from 1,183 investors. That is $1,850 per investor. The entire process was conducted online at Wefunder.com.
It has become clear through the Pennsylvania coffee house test that Wifigen has a solid value proposition for small retailers. The founder, Bilal, plus the other investor and I have decided to raise $250,000 to fund the company well into next year to build out the product offering and put a U.S. effort in place to acquire and support customers. To raise the money, Wifigen is using the Wefunder crowdfunding platform.
In addition to the efficiency of online investment, fund raising can experience the social media effect. The Wifigen crowdfunding began less than a week ago. During the first few days, 22 investors from 12 States and 3 Countries invested a total of more than $20,000. The investment size ranged from $250 to $10,000. An additional investor has pledged $25,000.
Social Media advertising will commence soon. So far, about half of the investors have been friends or family of the the other board member and me. The other half discovered the Wefunder crowdfunding campaign as Wefunder members or through networking. Some learned about it as subscribers to my weekly e-brief. Others may have received a copy of the e-brief from a friend. We see the names of the investors, but more than half are people we do not know. They may be friends of friends of friends. We welcome them! The power of social media is already evident as a key component of crowdfunding.
If you have an interest, take a look at https://wefunder.com/wifigen and you can see a video of the Wifigen founder and the board explaining the strategy, plus a lot of information about what Wifigen is and how it works, why it can be a good investment, what are the risks, and how to invest as little as $250 or thousands. Please share this with any friends you think might be interested.
