Obi Omile had a problem.
Whenever he and his team chatted with traditional investors about the market for their startup, their opportunity was lost on local VCs.
See, Omile is the CEO and co-founder of theCut, a Northern Virginia-based startup that helps both barbers promote their services online and consumers book their grooming appointments. In the past two years, he's seen barbers flock to the platform, opting to rely on theCut for promotion instead of their Instagram feeds and messages.
"We were talking to investors already but many of them didn't understand the market because they hadn't been to barber shops or they didn't necessarily fully see the opportunity," Omile said in an interview. "So, for them, it was harder for them to understand."
Nevertheless, Omile saw the market opportunity that these traditional investors didn't. So, Omile turned to a different source for his company's funding needs: Republic.
Founded in 2016, Republic is a New York City-based crowdfunding equity investment platform. It offers any private U.S. company an opportunity to list their project for funding. In return, it gives Kickstarter-like rewards to backers and a small stake in the company that could produce a financial return.
That's what Omile found when he brought theCut onto Republic. Instead of sitting around, hitting roadblock after roadblock with traditional VCs, Omile closed his $50,000 goal within three-to-four weeks. Half of the investors were current theCut users.
"The fact that so many of them were willing to contribute and that they believe in the business is definitely pushing us forward," Omile said. "The comments and the feedback they would leave as to why they invested would always leave a smile on our faces."
Now, this wasn't theCut's first funding round. Previously, the company had raised money from local angel group Shenandoah Valley Angel Investors, which provided its seed funding.
But turning to Republic gave the team the extra boost they've needed to keep up with growth. To date, theCut has raised a bit more than $78,000 of its $50,000 goal, and the new funds will go towards building a more robust product, expanding marketing efforts and focusing on new partnerships.
Back when Omile had the idea for theCut with his co-founder and best friend from high school, Kush Patel, the duo just saw it as a solution for their own frustrations.
Omile had just moved to Charlotte, N.C., for a job with Wells Fargo, and Patel worked stints on different engineering teams in both the D.C. metro area and New York City. In North Carolina, Omile just couldn't find a barber he felt comfortable with. Whenever he came home to visit his go-to barber, the wait was about three hours to be seen for a simple, quick haircut.
That's when Omile and Patel realized there was a problem.
Now, based on what's stated on the Republic crowdfunding page, theCut has over 9,000 barbers registered on their platform across the U.S. They also have over 100,000 users, and customer growth of 27 percent month-over-month. To bring in revenue, theCut takes a small percentage of the transaction amount from the barber's profits, and the team has plans to launch a subscription service and more on the platform in the future.
Most of theCut's users came from organic social media growth and word-of-mouth recommendations, Omile says. The first handful of users — often known as the hardest for startups to land — came from simple social media searches by Omile and Patel.
"It was hours spent on Instagram copying down contact information to find barbers that said in their bio description, 'DM me for appointments,'" Omile said. "So we put all of that contact information in a list and found them that way."
And as theCut settles into its new funding in the coming weeks (the campaign closes Friday), the company plans to focus on growing its client base and users through different marketing strategies this year.
"When it comes to your users and your customers, it's really about being open with them and what you're communicating in terms of what you're working on with the app and how the app can communicate the problem," Omile said.
"It's not so much that we're selling barbers a product, it's more that we're providing them with a service to help them do more of what they do best."
