Gathering up venture capital for
your brilliant idea just got a lot easier thanks to another brilliant idea from Jessica Jackley
. The founder of Kiva, the foremost microlending website letting users lend as little as $25 to entrepreneurs in developing nations, is at it again with ProFounder. The service collects and organizes capital from entrepreneurs ponying up as little as $1,000. This model works with the understanding that upstart projects are predominantly funded by creators' families and friends—a process that has its pitfalls and confusion. ProFounder (which Jackley co-runs with Dana Mauriello) simplifies everything to make sure there's no tension and lots of cash flow. It also looks like they're moving quickly toward success.
In the six months since its launch, ProFounder has raised almost $500,000 from 304 investors for 18 companies. One such company is Cubic Motors, a stealth startup developing an electric motorcycle (above). Cofounder Marc Fenigstein needed money for a prototype to show angel investors, but for intellectual-property reasons couldn't go public with designs. So with ProFounder he asked friends and family for $1,000 of investment each in exchange for a share of revenues. It took just 16 replies to raise the capital.
“Eighty-seven percent of all funding in the US that goes to private businesses every year comes from friends and family,” says 28-year-old Mauriello. “We're taking what's happening online and making it less expensive and more convenient.” ProFounder currently operates only in the US, but Jackley says the model “is going to be something we can perpetuate far and wide”. The company itself has $1.35 million in seed funding, raised more conventionally. “Unfortunately,” says Jackley, “we didn't have our platform built then.”
Jessica Jackley, always on the cutting edge on online business innovation, is a bright, energetic, and unapologetically optimistic speaker. She reveals the power of business to change the world and offers a refreshing keynote relevant to any firm, from not-for-profits to Fortune 100s.
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