When Lifebridge 10000 LLC raised $22,000 in a 2017 crowdfunding campaign, the Winter Springs-based health tech startup considered it a failure, founder and CEO Peter Travers said.
However, the campaign led to 67 investors chipping in money for Lifebridge 10000, and some of those people later invested directly into the company outside of the crowdfunding round, Travers said. “One doctor became a champion of ours. He put in $140,000, and through his network, we’re up to almost $800,000.”
The experience of the University of Central Florida Business Incubation Program client highlights one of the benefits of the increasingly-popular fundraising method of crowdfunding. It not only helps startups raise money, but it can connect them with investors who may pump more dollars into the company down the road.
Equity crowdfunding, in which firms raise investment dollars by selling securities to the general public through online platforms, was permitted by the U.S. Securities and Exchange Commission beginning in 2016.
It’s picking up traction with businesses and investors in Central Florida and beyond. In fact, companies across the U.S. used the method to raise $215 million in 2020, up 105% from 2019, according to an analysis by equity crowdfunding education site CrowdWise. Plus, there were 358,000 participating investors in 2020, a 75% increase from the year before.
The crowdfunding 'tool'
Despite a lackluster raise through its previous crowdfunding campaign, Lifebridge 10000 again is going the crowdfunding route. Its ongoing campaign on website WeFunder has netted $154,128 from 69 investors as of Oct. 28, with a goal to raise an additional $95,872. This money will help the firm get its wearable device that treats tumors ready to go in front of the U.S. Food and Drug Administration and get green lit for human trials.
This time around, Lifebridge 10000 enlisted some help. WeFunder connected the company with Dan Mueller, a two-time entrepreneur who offers businesses crowdfunding help through Campaigns.guru. Mueller taught the Lifebridge 10000 leadership team valuable lessons, including how to prep properly for the launch of a campaign, said Lifebridge 10000 Vice President of Corporate Development Rick Rotondo.
Mueller said it’s common for companies he consults with to not prepare fully for their crowdfunding round before launching it, and Mueller’s website lists eight actions firms need to take before even going live with their campaign.
Likewise, companies need to understand that crowdfunding rounds by themselves typically will not achieve all of their financing goals, Mueller added. “You’re going to have to look at it as a tool in that regard. It’s usually not all you need.”
That’s the case for Lifebridge 10000, Travers said. “We almost don’t look at it as crowdfunding anymore. We look at it as building an accredited investor network.”
Meanwhile, other local startups see crowdfunding as their next move to score investment dollars.
For example, Orlando-based Bacarai Inc. plans to conduct a $1 million fundraising round this fall through crowdfunding investment platform Republic, co-founder and COO Kenny Totten said. The online group airfare bookings firm will use the money to ramp up operations and rehire furloughed employees as travel roars back this year and the next.
New ways to invest
Local companies aren’t just using crowdfunding campaigns; they’re hosting them. For instance, Orlando-based Miventure Inc. launched in 2020, and in spring 2021 it pivoted to a crowdfunded investment platform for early-stage businesses. Miventure plans to facilitate $2 million in startup investment campaigns this year.
Likewise, Melbourne-based Spaced Ventures Inc. in October closed a $1.2 million seed round to double its staff of five people and build out its crowdfunding investment platform for aerospace startups, co-founder and CEO Aaron Burnett previously said.
The company formed in 2020 and made the crowdfunding platform available to the public in September. Spaced Ventures reports it has received 100 applications from businesses that want to raise money through the site and 1,700 investor registrations. Three businesses so far have raised a combined $600,000 through the site.
Investment capital can be critical for early-stage companies and the community. It funds companies as they scale up while also providing business expertise and industry connections. The growth of these companies in turn creates high-wage jobs and innovative solutions for local businesses and residents.
Startup investment deals in the region got a bump last quarter. There were nine startup investment deals worth $66.3 million in metro Orlando last quarter, according to data from PitchBook and the National Venture Capital Association released Oct. 14. Investment activity was up 26% from $52.7 million in deals in the second quarter.
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