Jessica Jackley on Empowering the World's Entrepreneurs (Podcast)
TreeHugger: So, what kind of people are you looking for, somebody who's trying to start a software company or somebody who's trying to start a skateboard shop?
Jackley: We really feel like that person that's starting a software company very well may be in California, Silicon Valley, Boston, or New York where 70 percent of venture capital goes anyway. That person might have access to a venture capitalist or an angel invenstment community, and that's great. We've actually seen people do friends and family rounds, even when they already have access to this professional capital. However, it turns out that 87 percent of funding for private companies in the US comes from friends and family anyways.
TH: Give us a couple of examples of the kind of folks who have come forward and been able to use ProFounder to raise money.
Jackley: Our very first story is a wonderful one to tell. There's a candy shop in Honolulu called Uncle Clay's House of Pure Aloha. Uncle Clay and his nephew, Bronson raised raised $54,000 from 19 investors. And it's been great. They offered them two percent of the revenues from Uncle Clay's House of Pure Aloha over the next four years. And they also offered other bonuses too, like private tastings of new flavors of shaved ice when they come out, things like that.
They also did a second round, raised almost another $10,000, which was great to see. So, they actually are the first to double-dip and do two raises.
We also recently had a motorcycle company raise $50,000. We had a socially conscious textile design company raise $12,000 from 32 investors. You can see the numbers can really fluctuate. You can include just a handful of people or you can include a few dozen people.
We had Bucket Feet raise money recently. Bucket Feet is basically a wearable art shoe company based in Chicago. Very very cool stuff. They shared, I think, five percent of their revenue over three years. They raised $60,000 from 33 investors. So those are just a few examples, but there are many more. And we're very proud of each and everyone of our entrepreneur.
TH: Does ProFounder fit into an emerging trend of crowdfunding, a change in the way that people raise money?
Jackley: Absolutely. I do think there's a trend happening. And why not-with technology it's much easier to gather lots of people together all at once. The costs are much lower to take advantage of most people's biggest existing resource, their community. It's not just the money, it's this tool when you crowdfund for community building, for marketing. You're also sharing a risk among many people when it is something other than a donation.
You'll find you're putting less pressure on any one person. And you're sharing your success farther and wider too, which is exciting. So the whole community can benefit when there is a financial gain to be had.
When you're naming your own terms-which isn't in all cases, but certainly on ProFounder-you set the terms that make sense to your business, instead of somebody else deciding what makes sense for you.
I remember business school classmates graduating right alongside me and doing amazing startups. They were doing friends and family rounds of funding, but their lawyers would tell them that they could really only include accredited investors or only take $25,000 minimum. And I didn't have $25,000. To see people chip in a few hundred or a few thousand dollars, something that makes sense to them, and then reach a very ambitious goal together is so exciting and inspiring.
So I know I'm excited to participate in these things myself, and I really look forward to seeing this be a tool for other people to do the same.
TH: Obviously you have a passion for helping empower people to realize their vision. What's the ripple effect of helping people get their businesses off the ground?
Jackley: From the practical level, I think we as a society are way over-invested in these giant companies. We need to be much more invested in the smaller and medium-size businesses that actually serve us everyday right in our communities. And it's hard to do that.
If you think about it, how do you go and invest in a small business that you love? It's very hard. So ProFounder exists for that reason: to allow investors that opportunity to share in the effects of small business in their community. To support people who really make up the fabric of their day-to-day life. So, that's one way to look at it.
Another way-the really touchy-feely way, but this is how I think-is that the vibrancy of society is very tied to how entrepreneurial, how creative, how inventive it can be. I know that I have many friends and colleagues that don't see an entrepreneurial path for themselves at all. It's just the farthest thing from their minds. But I believe if they were able to see it and participate even in a tiny way, as an investor, as someone just cheering on their friend and getting a little more realistic insight into what the path is like, they might see more entrepreneurial paths and activities for themselves, which is a good thing.
Whether or not they ever quit their job and go start a company on their own, that doesn't even matter. I believe it's very important for every one of us to see possibility and potential for ourselves in our work every day. Then you also have investors and they get to participate in new and very very worthy opportunities.
For the community as a whole, you have a better and healthier economy when you have more businesses of varying sizes growing at different rates. And they have to at least have access to capital that they need to succeed.