A Columbus startup that makes it easy to pool investments in real estate, startups or other equities has become one of those investments for more than 400 members.
Tribevest LLC this month closed an $894,000 community round, through the platform Wefunder and some individuals. Most investors put in about $10,000; the range was $100 to $100,000. The round values the company at $20 million, according to regulatory filings.
The campaign came about at the request of many of its "tribes," co-founder and CEO Travis Smith said.
"More important than the size of the check that was written is how many people reached into their wallet, pulled out their hard-earned cash and wanted to be part of what we're building," Smith said in an interview. "It was more than just an investment. It was this genuine passion and excitement for what we were doing.
"So many people said, 'You've built the platform I've been thinking about for years.'"
CheckFree founder Pete Kight, the dean of fintech startups who created the backbone of online bill payments, was the first and lead investor in the round. Kight has been a mentor to Smith since he saw him give a talk at Rev1 Ventures.
"He started CheckFree in his grandmother's basement in Worthington," Smith said. "Here's a normal guy from the town we're building the business in, that built a unicorn in an even more difficult time."
CheckFree moved to the Atlanta area in 1996, the year after its IPO. Fiserv Inc. acquired it for $4.4 billion in 2007. Now living in Denver, Kight has invested in and advised several Central Ohio startups.
Kight has said he had to move the headquarters because Central Ohio lacked the excitement around technology it enjoys today. The region has especially become a fintech hub.
"We just continue to see the community grow," Smith said. "A number of our employees come from other startups; that's how you know the community's maturing."
Tribevest automates steps for group investing that used to take weeks, such as forming an LLC, opening bank accounts and keeping up with regulatory compliance. Members put their ground rules in writing, such as how shares are divided or how one member can buy out of the group later, to prevent future drama. Revenue comes from an up-front fee and software subscription.
The group equity round follows the startup's $3 million seed round this January. With one-and-a-half year's worth of operating cushion in hand, Smith said, the seven-person business can pursue growth even in the face of an economic downturn.
Tribevest is on track to grow revenue by fivefold this year and hit recurring revenue that annualizes to $4 million next year, he said.
Venture capitalists used to look down on equity crowdfunding, as if it were a startup's last resort. Plus hundreds of individuals make for a crowded cap table. But platforms like Wefunder simplify the structure, making a single group the owner.
"Crowdfunding is a viable and more respected fundraising option than ever before," Smith said. "For Tribevest it was really unique – our customers are investors – so it's hard for me to give general advice. We would likely not have done it just for fundraising."
