This weekend was the perfect autumn weather - Friday night I watched my son lose a nail biter in a football game, worked in the yard some, had some great family time, dinner with friends on Sunday night and…I invested in 3 equity crowdfunding startups.
As you know- I am a huge believer in the world of equity crowdfunding. If you follow me at all, you know that I don’t recommend pushing all your investing chips this way- honestly, it’s the opposite. First- do your homework, become educated and then slow dip your toes into the reg CF waters. Investing in early stage starts is fun and new- this space is growing so quickly. But it’s also super risky. So, don’t ever just jump into deals until you understand the pluses and minuses. With that said- I would love to share which companies I invested in this month and give a quick overview of what I like, but where I see the risks.
Each of these deals happen to be on the WeFunder platform, but there are plenty of great deals across multiple platforms.
I’ve been watching this deal from the start of their raise. Place is a SAAS (Software as a Subscription/Service) focused on helping companies better forecast their cash flow and revenue. I’ve had the opportunity to spend some time with Brandon Metcalf the CEO and Founder of Place- if you haven’t seen our conversations where I ask him all sorts of questions- you can view that here.
What I like:
They are seeing strong numbers on the Annual Recurring Revenue side of things- which is very encouraging for their sustainability and future growth. Not only that, I like the pose of Brandon the founder- he carries a humility that I love to see in founders. Brandon exited his first started Talent Rover a few years ago - which of course doesn’t mean it will happen again, but he’s walked that difficult road of building a selling a startup and that’s not easy. He has built his software on the Salesforce platform, which already has a number of potential clients able to integrate Place into their business quickly.
What makes me nervous:
Honestly- this is probably one the strongest deals I’ve seen in a while. It’s not as sexy as electric motorcycles or drones. But- sometimes boring software companies are just what the doctor ordered. Now don’t get me wrong- there are no slam dunks when it comes to early stage startups. Markets can shift, founders can have unfortunate circumstances knock them off their axis & there are a number of factors that just are predictable. With all those factors no startup is a 100% guaranteed success. From what I’ve seen Place has a number of factors that make it a strong bet. And that’s why I invested.
What do you think? Have you invested in Place? What do you like or dislike about this startup? Check out my conversation with Brandon here.
I had coffee with Tom Bancroft one of the founders of Pencilish around 7 months ago. I got to hear his heart and vision for the first crowdfunded animation studio. He shared his story of his years at Disney and how he had taken part in creating some of the most beloved characters of my childhood. Tom shared how the stars of equity crowdfunding & access to more distribution channels made now a ripe season for something like Pencilish possible.
What I like:
I really like the background and connections that Tom has. He is very well connected and respected in the animation industry. Not only that, but he has surrounded himself with advisors and partners that have the ability to help move the needle. Tom and his team are already in development on three short films/series that could be ready for distribution in the next 6-12 months. I actually like that they are going to leverage YouTube to grow a base and then shop the projects around. The typical model is- have an idea and see if a streaming platform will buy the rights- but Tom and his team are flipping that model on its head. You can actually see Tom share the entire model: HERE. Honestly- I think it will be neat to sit with my kids and watch the finished projects.
What makes me nervous:
This is a very long play. Animation takes time and it’s not cheap. I think all investors in Pencilish need to be very patient. Also- I think they will be able to get a few smaller projects off the ground with the seed money raised in this round, but they are going to have to find deeper pockets to fund the full vision they are wanting. And, being one of the first of its kind- Pencilish is really plowing new territory, which can be exciting- but also extremely hard!
What do you think? Have you invested in Pencilish? What do you like or dislike about this startup? Check out my conversation with Tom here.
Startup: Duel Social
Duel is taking on the tech giants! They don’t pull any punches when it comes to saying they want to take on Tik Tok and Instagrams of the world. For me- I love a good David and Goliath story. Duel is a short form video challenge app that is tons of fun. One of things that I love about Duel is - as a content creator myself, they are building an app that literally pays those creating content, as well as those using the app. Outside of YouTube- it’s truly a first of its kind.
What I like:
Duel is built with the people in mind. When someone downloads the app, they are ‘Opted Out’ of sharing their data. This is very different from any other social app out there. It’s all focused around short form video challenges. Of course we see how big Tik Tok has gotten and even YouTube is leaning in hard on their short form content with YouTube Stories. I think the world is ready to change the game when it comes to the handling of personal data. And honestly- the fact that big tech is making so much money off it’s users and not sharing the spoils isn’t cool. Duel could get one or two big names to jump on the platform and see a virality effect pretty quickly.
What makes me nervous:
Duel is super early. They have a great product and great founders, but it is the ground floor. Yes, the potential to leverage an influencer's audience gives them the potential to be discovered rather quickly, but - we all know that there are a number of awesome apps in the app stores that the world never knew about and weren’t able to gain traction in time. If Duel isn’t able to get a quick pop out of the gate and traction- it could be an impossible mountain to climb. This startup has a lot of boxes checked that I like- founders, idea, distribution potential- these are all great, but on the other side of the coin… they need plenty of capital to launch successfully, quick adoption & some luck to fall their way. It’s a major uphill climb for Duel, but I’m willing to take the ride with them.
What do you think? Have you invested in Duel? What do you like or dislike about this startup? Check out my conversation with the Duel Founders here.
These are 3 startups that I’ve jumped into and this is my personal decision.
None of these investments were made with StartupWire funds or capital. I want to always remind you, take your time and do your own due diligence. Investing in early stage startups is super risky. Most of them (over 90%) will fail, some will return your investment & a small few have the potential to bring big returns- but no one has a crystal ball to what will actually happen. So for now we do the best we can with as much information as we can.
So with that said- What do you think about these startups? What questions do you have? Drop a comment below and let me know your thoughts.