When people think of crowdfunding, they tend to picture raising money on platforms like Indiegogo and Kickstarter, where contributors give small amounts of money to a company and receive a perk in return. But a legal shift that took effect in May this year has allowed startups to offer investors of all sizes partial ownership of their companies instead.
Unlike traditional crowdfunding, where a contributor might receive swag or gain first access to a product, equity investing is, itself, the perk. The investor now owns a piece of the company, and that investment has the potential to grow in value. An ownership stake may also provide a more intimate connection between funder and company; investors may be called upon to share their expertise, or even sit on the company’s board of directors.
Prior to May of 2016, “unaccredited” investors were forbidden from equity investment because of the real financial risks involved. Startups have a high rate of failure, and entire investments may be lost. But today anyone can make an investment, if they do so through an approved crowdfunding site and adhere to certain rules. We have been eager to see whether women business owners take advantage of this new way to raise startup and growth capital.
The female crowdfunders below have some interesting ideas, and are looking for investors who will help take their ventures to the next level. The following information is not investment advice, and please take note that any equity investments you make are at your own risk.
The Business: Heather McDougall is the CEO and co-founder of Bogobrush, a startup that designs and manufactures biodegradable and recyclable toothbrushes. She and her cofounder, her brother John, were inspired to start the company by their dentist father — and by their shared passion for sustainability. “The plastics in almost all toothbrushes are non-recyclable, meaning over 450 million toothbrushes a year in the U.S. alone end up in landfills … When you’re done [with Bogobrush toothbrushes], throw them in your compost or recycle bin — and nature will do its thing,” McDougall says on her campaign page. What makes Bogobrush’s business model especially interesting is its “buy one, give one” policy, which promises that for every toothbrush sold, one goes to a community in need.
The Money: So far, Bogobrush has raised $35,850 of its $50,000 goal. Capital raised will go towards marketing and purchasing new tooling equipment.
The Business: Founded by Lynn Johnson and Allison Kenny, Spotlight:Girls offers empowerment programs including summer camps, after-school clubs, educational products and events for girls ages 6-13. Both Johnson and Kenny have theater backgrounds, and that experience is reflected in their programs; they teach girls how to create original plays, songs and art. “We are igniting a compassion revolution by putting girls center stage,” says Johnson, who is CEO and cofounder, on their campaign page.
The Money: The duo wants to expand their company’s reach beyond the San Francisco Bay Area. Investments will fund marketing, franchised camps and an online store. Spotlight:Girls has raised $7,500 of its $25,000 goal.
The Business: Rodeo Donut is a Seattle-based pop-up looking to open up its own brick-and-mortar space. Started by Nicki Kerbs and Jody Hall, its experiments with creative flavors of brioche donuts (think peanut butter Sriracha) were a hit. Now, these cooks want to take their quirky cuisine and expand by opening a restaurant that serves fried chicken and whisky alongside their famous donuts.
The Money: Investments will become startup capital for their new restaurant. Rodeo Donut has raised $20,050 of its $50,000 goal.
The Business: Social enterprise Veditz is an education marketplace for the deaf that provides on-demand and live tutoring in K-12 and college subjects. Deaf children have much higher dropout rates than hearing students; 29 percent drop out of high school and 70 percent drop out of college. Arlene Garcia Gunderson, the president of Veditz and the American Sign Language Teachers Association, aims to close this gap with the Veditz mobile and desktop app. “We are committed to making a significant contribution through our services to improving the lives of deaf people everywhere and increasing education attainment,” she says on the campaign page.
The Money: Veditz wants to continue to expand internationally, and funds raised will go towards expanding the sign language catalog for tutors, along with the company’s global infrastructure. Veditz has raised $20,800 of its $50,000 goal.
The Business: Huong Tran is the CEO and founder of Magpie, a travel network specifically for women. Tran, an avid traveler herself, was inspired to create the network during her solo globe-trotting expeditions. Magpie connects women travelers and cuts out accommodation costs. Its points-based marketplace lets women earn points by hosting fellow female travelers, who spend points when they stay with someone. Not only does Magpie promise to reduce the costs of traveling alone, but it also alleviates safety concerns and provides companionship for women adventurers.
The Money: Investments will move the company out of beta testing and help it expand into Latin America and Asia. Magpie has raised $707,500 of its $800,000 goal. (Note: You must be an accredited investor to participate.)
Want to be featured in The Story Exchange’s Crowdfunding column? Drop us a line and tell us about your campaign at [email protected].