So besides the YC connection, I am genuinely curious what is different / better about FundersClub than any of the other 100 crowd funding "platforms" that have emerged?
These types of exchanges connecting companies with investors have been tried tens of times before, and they always fail because building a two-sided network is hard. People will only invest if good companies are there and good companies only show up if real money is there. Nothing I saw on the site suggested theyve solved this issue.
I'm cautiously optimistic about the Jobs Act but see so many of these platforms cropping up that seemingly don't have a solution to get quality dealflow and quality funders. The key to that IMO is not the fee structure which FundersClub spent a lot of time detailing or ease of the legal process. These are details but the key driver is getting quality startups and check writers on the platform who want to get "hitched". The legal and pricing details are next.
Lastly, the only folks really uniquely positioned to build the required two-sided network are the team at AngelList. I've not heard they're doing this but of anyone, they have the assets it seems to pull it off.
The team behind it - these guys have each built multiple successful companies with exits or massive profits - together with the YC spotlight. You're right that being in YC alone won't cut it but as we've seen it definitely amplifies the power of a great team.
The YC spotlight is particularly perfect for this concept because of demo day. They might be the only startup that can get all their most important and prominent target customers (and thought leaders) in one room, very shortly after launching.
But demo day really isn't their market is it? Demo day is YC companies with tons of amazing access to capital with pretty great terms (Milner, A16Z and Ron Conway cash) and a group of other attending investors who aren't interested in writing $1000 checks.
If they could convince YC companies to forego the available money and use their platform instead, that would be a coup for sure. But that seems unlikely.
Good point. But it is the world's best opportunity to get leading investors on the platform to make an investment or two to give it a level of credibility others have not reached. That itself is a mini network effect problem but having them all in one room makes it much easier.
Having the world's leading angel investors on the platform would be one of the keys to establishing a successful two-sided network.
These types of exchanges connecting companies with investors have been tried tens of times before, and they always fail because building a two-sided network is hard. People will only invest if good companies are there and good companies only show up if real money is there. Nothing I saw on the site suggested theyve solved this issue.
I'm cautiously optimistic about the Jobs Act but see so many of these platforms cropping up that seemingly don't have a solution to get quality dealflow and quality funders. The key to that IMO is not the fee structure which FundersClub spent a lot of time detailing or ease of the legal process. These are details but the key driver is getting quality startups and check writers on the platform who want to get "hitched". The legal and pricing details are next.
Lastly, the only folks really uniquely positioned to build the required two-sided network are the team at AngelList. I've not heard they're doing this but of anyone, they have the assets it seems to pull it off.