Crowdfunding is ticking up in a big way amongst local startups.
Since 2020, 11 Kentucky companies have launched campaigns on Wefunder, one of several crowdfunding platforms to gain prominence in recent years.
But Wefunder stands out to Louisville-area startups specifically because of a $20,000 matching commitment from Render Capital. As soon as a company secures $20,000 on its own, the early-stage venture firm can step in and bring that total to $40,000 — that's easy money.
Marigrace Ragsdale, venture platform manager at Render Capital, said Wefunder serves as another great way that local entrepreneurs can gain access to critical early-stage capital.
"Through our $20,000 matching program, we have seen so much momentum for local founders just in the first two years," she said. "We hope our partnership with the Wefunder platform will be a catalyst for Louisville and Southern Indiana startups for years to come."
Cornbread Hemp, a CBD startup, was the first local company to find success on the platform in 2020, securing nearly $400,000 from 900 investors, including lead investor Gill Holland, who's well-known in local real estate circles. Louisville-based OrgVitals, formerly known as Unitonomy, followed with a nearly $135,000 raise that closed early last year.
Then, in August 2021, Harlan County Beer Co., based in Harlan, Kentucky, and founded by Holland and Geoff Marietta, raised about $240,000 through its Wefunder campaign, with Louisville developer Andy Blieden as the lead investor. Stay Clean, a cloud-based, 24-hour recovery community, secured almost $59,000 in September of last year.
Most recently, Kare Mobile's Wefunder campaign closed in May with a total of $97,375 from nearly 100 investors.
Here are the other active campaigns on Wefunder. Click on the name of the company to see the pitch.
Yornest
What it does: A chat app that transforms large close-knit groups into vibrant communities.
Founder(s): CEO Michael Brizendine and CTO Shaquile Noor
Goal: $100,000 (first goal)
Capital raised: $102,750
Valuation cap: $2.5 million
Lead investor: Keyhorse Capital ($50,000)
Brite Trace
What it does: Improving quality of life for individuals with dementia.
Founder(s): CEO Danten Rice and COO Nolan Carrico
Goal: $150,000
Capital raised: $50,000
Valuation cap: $2.5 million
Lead investor: Jardane M. Rice ($30,000)
XpressRun
What it does: One API [application programming interface] to enable DTC [direct to consumer] brands to deliver smarter and faster than Prime.
Founder(s): CEO Sada Wane, Jordy Wood, sales and strategy, and Ahmadou Diop, operations
Goal: $50,000
Capital raised: $44,100
Valuation cap: $4 million
Lead investor: Not available
Hubhouze
What it does: An e-commerce/SaaS [software-as-a-service platform] with collections of bathrooms designed by style and budget.
Founder(s): CEO Danielle Fluntie Queiroz
Goal: $200,000
Capital raised: $51,000
Valuation cap: $2.5 million
Lead investor: Peter R. Bradley III ($30,000)
Moolathon
What it does: A social fundraising platform and fitness tracker.
Founder(s): CEO Mac Wilkinson
Goal: $50,000
Capital raised: $5,000
Valuation cap: $8 million
Lead investor: Not available
Pav*r
Founder(s): CEO Jessica Bledsoe and CTO Adam Bledsoe
Goal: $100,000
Capital raised: $0 (this is Pav*r's second Wefunder campaign)
Valuation cap: $5 million
Lead investor: Not available
Notably, most of these companies are raising on a SAFE. A SAFE, or a simple agreement for future equity, grants an investor the right to obtain equity at a future date if the startup sells shares in a future financing. Pav*r is raising on a convertible note, which is an unsecured loan that converts to stock at some point in the future.
Convertible notes are one the most popular forms of seed-stage startup investing, although the SAFE is rapidly becoming more prevalent, Wefunder says.
Also, for those unfamiliar with valuation caps, they set the maximum price that an investor's convertible security will convert into equity. Usually, this is a way for startups to reward early-stage investors for taking on additional risk, and valuation caps on Wefunder typically range from $2 million to $20 million.
