I recently heard their pitch and found it convincing. Researching online, however, I haven't been able to find any posts from entrepreneurs who have used the platform successfully. They have an upfront + monthly fee to help package and promote your startup to investors. Was wondering if it is worth it. Any experiences or opinions on the platform would be great insight and very helpful.
We have used Fundable.com successfully for two rounds of financing both oversubscribed. Here is what I can tell you.
Fundable.com's platform connects accredited investors to startups seeking investment capital. Startups have a public facing profile that includes general information about the companies product, team, press accolade, etc. If you are raising funds claiming SEC Reg D 506(b) the public profile has no information about your securities offering. If an interested investor wants to view more information about your startup and or your offering, he/she would request access to your full profile. The investor must self accredit on the Fundable site before they are allowed to view your non-public profile. The startup is notified and you have the opportunity to conduct some due diligence on the investor (LinkedIn) and elect to invite them into your deal. Your private page includes the offering (terms). All communication from this point is done outside of the platform, meaning you have the investors email address ( a good thing to have).
Fundable charges startups a flat monthly fee to post a profile on the site. In addition you can opt for additional services (help) with your campaign. For a flat fee, Fundable will assign resources to help build your profile, consult with you on your raise, and assist with PR or Marketing. This includes a blast to their investor base of over 40K if my memory serves me correctly. I am sure it is higher today.
For our first round on Fundable, we elected to use the premium service. Fundable did a great job in helping with our profile. We received 50+ views per day (quite often 100+) and on days we were included in their newsletter we received 200+ views. 10 - 20% of views requested access to our full profile. and 10-20% of those responded to my request for a call. Our close rate was very high.
Both of our rounds were oversubscribed in less than 4 months taking averaging $50K per investor. These are high quality investors that have not created additional work (outside of normal investor updates). Many of our investors regularly share news and information about our industry. Several have re-invested in subsequent rounds.
Our startup is in the consumer hardware space which I believe tends to attract high net worth individuals. Obviously results may vary, thus I cannot speak to how well a SaaS play would do crowdfunding in general. Fundable.com's premium services offering may have changed since our campaign. I am not affiliated with Fundable.com. In fact we have been successful on other crowdfunding sites as well.
I am a proponent of crowdfunding in general. It is disrupting angel investing, providing investors with greater deal flow and exposing startups to an exponentially larger audience, increasing their chances to get in front of investors who understand and appreciate that company's solution and opportunity. Most importantly it is moving capital and driving innovation! Keep in mind, securities laws have changed and continue to change due to the Jobs act of 2012. Before you offer any securities to local investors or choose to try crowdfunding, you should consult with an attorney, and take the time to learn and understand what regulations apply to your circumstances.
Unfortunately without much traction, Accredited investment based crowdfunding does not work well for most startups. However, hope is on the horizon. Just this morning (3/25/15), the Securities and Exchange Commission approved unaccredited investor based crowdfunding which will allow for anyone, regardless of income, to invest in a private company. So instead of having to meet the harsh demands of VC's, now anyone can invest in a startup once the final rules become effective in two months from now. Hope this helps and would be happy to chat further through clarity if this new development is of interest.
I've met the Fundable team in person, they're based in Columbus, Ohio. They're very determined to help entrepreneurs and I've seen a lot of success stories from startups raising funds on their site. Your best bet is to set up an account and give Fundable a call, they're very personable and I'd expect they'd be very honest about your startup's realistic viability in fundraising.