For those who aren’t familiar with Profounder can you tell us how the platform works?
Sure! ProFounder is an online crowdfunding platform that provides tools for entrepreneurs to raise investment capital from their community. Entrepreneurs simply create a profile and fundraising pitch on profounder.com, and then can invite anyone (even “unaccredited, unsophisticated” investors) such as family, friends, customers, classmates, colleagues and others, to invest in their company. Investors receive either equity ownership (stock) in the company or a percentage of revenue over a fixed amount of time, depending on what investments terms the entrepreneur has set. ProFounder provides tools to entrepreneurs to manage and facilitate compliance regulations, e-signatures on term sheets, investor management, and more.
What was the inspiration for Profounder?
Through my role as a cofounder of Kiva a few years ago, I got to meet amazing entrepreneurs all around the world — including right here in the United States. I heard over and over again how many of these US-based entrepreneurs needed funding, and even had friends and family members who wanted to invest, but they didn’t know how to actually facilitate the investment. Even in Silicon Valley at the Stanford Graduate School of Business, my cofounder Dana Mauriello and I saw a similar demand among our classmates (unaccredited and unsophisticated students, for the most part swimming in student loan debt) who wanted to invest in each others’ amazing start-ups after graduation — but felt frustrated by the high costs and legal barriers we faced.
So you’ve set up shop in Los Angeles, why LA over Silicon Valley or NY?
I moved to LA after 10+ years in Silicon Valley for personal/family reasons, and stayed to establish ProFounder here because of the incredible community I discovered. LA is actually a very creative and entrepreneurial place in its own way, and is a huge hub for small business activity in this country — there are more here than anywhere else. It’s a nice change, and I feel thankful to get to the Bay Area every other week or so. And we’re able to get to NY a lot too. I’m currently writing my answers to this interview on a flight back from JFK to LAX!
Can you share with our readers a success story of a Profounder entrepreneur?
There are so many wonderful entrepreneurs to choose from on our site, but I’ll share with you the story of our very first customer. Bronson Chang had recently graduated from USC, and decided to move back to Hawaii and partner with his uncle, Uncle Clay, to help grow their family business: Uncle Clay’s House of Pure Aloha. The House of Pure Aloha is a beloved local snack shop that’s been around for 17 years, and has a social mission of connecting the community through a shared spirit of Pure Aloha. Bronson and Uncle Clay created a raise on ProFounder, with goals of building a new store and introducing new products, and successfully raised $54,000 from 19 people, including some of Bronson’s classmates and several loyal House of Pure Aloha customers. They offered investors 2% of the business’s revenue over 4 years; however, this seemed to be less important to his investors than the opportunity itself to support and thank a cornerstone of their community that they wanted to see succeed. You can read more about Bronson’s raise on our blog!
For aspiring entrepreneurs looking to community fund their business, what would be the number one thing you would recommend them to start doing now to ensure their success through community funding?
Talk to your community now! Get out there, talk about your idea, and engage those who want to support you. We find that entrepreneurs who have the greatest success are those who have already actively reached out to potential investors before they have published their raise, and who have also been creative in considering the variety of ways their community can support them. Some entrepreneurs have discovered that they can gain the most from asking not just for financial investments from friends and family, but by finding other meaningful ways for their community to participate in their raise, such as writing customer testimonials on their website or donating goods and services to their business as well.
Outside of the funding and compliance platform, how else is Profounder empowering people to pursue their dreams through entrepreneurship?
I believe the biggest barrier most would-be entrepreneurs face isn’t financial, but psychological: most of us are our own biggest critics, and we doubt our abilities and potential to do great things. The more ProFounder can highlight the journeys of everyday entrepreneurs, the more we can encourage people to take those next steps and realize their entrepreneurial dreams — surrounded and supported by their friends and family — the more we will all believe we can create positive change in the world. I hope the entrepreneurial spirit I see in so many people using ProFounder right now can be more and more a part of our culture, and our everyday lives. At its core, entrepreneurship isn’t even about starting a new company or endeavor, it’s about hope and optimism. It’s about deciding to make things better tomorrow than they are today, for ourselves, for our families, for our communities. I want more people to choose this kind of life.
How can our Care2 readers who aren’t looking to start their own business help actualize Profounder’s vision?
ProFounder seeks to ensure that all entrepreneurs have access to the resources they need to succeed through the engagement of robust, supportive communities. So, first and foremost, tell the entrepreneurs you know about ProFounder, and encourage them to raise money on the site – and maybe even be their first investor!
Another option is to mobilize a broader community to use ProFounder. We recently launched a new product for organizations, universities, companies and other groups to offer a community crowdfunding toolkit to its members through a specially branded site. ProFounder can set your organization up with a special landing page with your logo and other customized features, a dashboard of statistics about entrepreneurs that have raised money through your site, and case studies of successful entrepreneurs within your own community. These branded sites give organizations the ability to not only engage their entrepreneurial community in a unique way, but also allow them to provide other value-added services to its members to make the ProFounder experience more coherent.
Perhaps you want to champion entrepreneurship in your local city or university campus. In addition to setting up branded sites, we have a Group Advisor program as well, in which individuals who are passionate about entrepreneurship in their communities are empowered as experts on community crowdfunding, and can serve as a resource to entrepreneurs in their community looking to raise money.
And the most basic way: spread the word! Please tweet about us and tell people you know about what we’re doing. Thank you!
Photo provided by Jessica Jackley