Funding Launchpad is about to ignite the investment crowdfunding revolution. Instead of counting on a small number of major investors, businesses will be able to accept smaller investments from a much larger audience
We had the opportunity to interview Mr. ‘Dave Milliken‘; Chief Marketing Officer at the US (Denver, CO)-based start-up “Funding Launchpad” about his Company.
FundingLaunchpad.com is a product of Vim Funding, a Boulder, Colorado company. “Funding Launchpad” is an online investment crowdfunding platform where investors will earn an equity stake in the companies they contribute to and a chance for a significant financial return.
Below is the full interview that we have conducted with Mr. ‘Milliken’ regarding his start-up “Funding Launchpad”;
1. What is it exactly that you do and what “Funding Launchpad” is all about?
Funding Launchpad is about to ignite the investment crowdfunding revolution. Today, startups and small businesses are dependent on banks, angel investors, and venture capital firms for growth funding. But banks aren’t lending and angels and VCs only invest in certain industries.
Funding Launchpad and investment crowdfunding will change the current model. Instead of counting on a small number of major investors, businesses will be able to accept smaller investments from a much larger audience – the entire population of consumer investors.
Investment crowdfunding contributions are made in exchange for an ownership stake in the company they are investing in. Funding Launchpad will be the technology platform to match buyers and sellers, and to facilitate the transaction.
2. When has “Funding Launchpad” been founded? And what stage is “Funding Launchpad” currently at?
Funding Launchpad was incorporated on November, 11, 2011 (11/11/11). Since that time we have assembled an All-Star co-founding and advisory team, developed our securities law knowledge, built our investment crowdfunding platform, worked with entrepreneurs interested in using investment crowdfunding to raise capital, and built a 1200+ member Twitter following. Funding Launchpad will officially launch around August 1, 2012.
3. What is “Funding Launchpad”’s business model and how does it work?
Funding Launchpad’s primary source of revenue model is a small success fee taken out of successful raises. For companies that do not meet their minimum level of funding, all money will be returned to investors with no deductions.
Over time, we anticipate adding a small platform access fee to be paid by companies when their fundraising campaign becomes public.
4. How did your team meet? And who in your team does what?
While driving to Denver Startup Weekend in November, 2011, Dave got a call from a friend who urged him to meet Steve Reaser, who he’d had lunch with that day. Steve had just moved to Colorado after successfully exiting WebAssign in Raleigh, NC. Steve was about to launch a startup with the goal of helping startups get funding.
Around that time, Shane Fleenor moved from New York to Denver to pursue his law career in a more entrepreneurial environment. About a month later, the day after Steve and Dave discussed needing to bring legal expertise into the team, Dave met Shane at a networking event. The next morning, all three trekked through snowy Denver streets to consummate their partnership and vision for Funding Launchpad.
Steve Reaser, Chief Executive Officer, is the external face of Funding Launchpad having spoken about crowdfunding at dozens of events already this year. Steve also manages the internal team, our financials, and the product roadmap.
Shane Fleenor, Chief Legal Officer, gives Funding Launchpad a competitive advantage in securities law knowledge and is responsible for much of our partnership development.
Dave Milliken, Chief Marketing Officer, brings issuers and investors to Funding Launchpad and has defined our market position and company personality.
Kyle Lamy, Director of Development, is the creator of the Funding Launchpad platform and drives all things technical.
Mike Kirshner and Alec Uitti fill out our dev team, bringing years of experience creating web applications from concept to design to working software.
5. What, exactly, makes you different from existing options, what will make your product and/or service stand out in the marketplace? In other words what’s unique about you and what’s new about what you make?
Today, awareness of crowdfunding is minimal. Based on Funding Launchpad’s exclusive research, less than half of consumers know the concept.
For those who do know crowdfunding, the most prevalent type of crowdfunding is “donation-based crowdfunding” (sometimes called “rewards-based crowdfunding”). In donation-based crowdfunding, contributors are rewarded with gifts like CDs, advanced access, their name in the credits, or other non-financial rewards. Put another way, money contributed to donation-based crowdfunding projects has a guaranteed zero financial return.
Funding Launchpad will be the first investment crowdfunding platform in the US. Unlike donation-based crowdfunding, investors on Funding Launchpad will earn an equity stake in the companies they contribute to, and a chance for a significant financial return.
6. What is your growth like? And what milestones has “Funding Launchpad” achieved so far?
Funding Launchpad will become the first investment crowdfunding platform in the US when we launch around August 1, 2012.
Key milestones achieved so far include building our co-founding team, building our investment crowdfunding platform, and enlisting a client base.
Funding Launchpad has also presented crowdfunding at events around the country. We estimate we have educated over 2,000 people on the topic.
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7. Who are your competitors? And what is “Funding Launchpad”’s competitive advantage over them?
Our best known competitor is Kickstarter. Kickstarter is a donation-based crowdfunding platform, as are IndieGoGo, Rocket Hub, and several other competitors. Unlike donation-based crowdfunding, Funding Launchpad is an investment crowdfunding platform where investors will earn an equity stake in the companies they contribute to, and a chance for a significant financial return.
Lending Club and Prosper are debt-based crowdfunding platforms, also known as peer-to-peer lenders. Where Funding Launchpad allows companies to raise money in exchange for equity, peer-to-peer lending sites allow individuals to raise money through debt only. Further, loans are given to individuals, not companies.
8. What obstacles did you face and how did you overcome them?
Funding Launchpad’s greatest challenge to date understanding complex federal and state securities laws. Fortunately our co-founding team includes Shane Fleenor, a Harvard educated lawyer.
Further, our advisory team includes Phil Feigin, a former Colorado Securities Commissioner and President of the North American Securities Administrators Association.
9. What are the key things about your field that outsiders don’t understand?
Consumers are often surprised to learn it is illegal for private companies to publicly announce or market that they are raising capital.
Similarly, they are surprised to learn those companies cannot accept their investment – that they are literally excluded from investing in some of America’s fastest growing companies.
10. Why are you going to succeed?
We anticipate significant competition from existing and emerging crowdfunding platforms. Nonetheless, we expect to succeed due to our superior knowledge of law, thanks to our Harvard educated co-founder Shane Fleenor, and marketing, given my background growing brands with Coors Brewing Company, Louis Vuitton Moet Hennessy, The Scotts Miracle-Gro Company, and others. We also have an excellent development team.
11. If “Funding Launchpad” succeeds, what additional areas might you be able to expand into?
Over time, we anticipate a robust marketplace for crowdfunding securities, including a secondary market, options, and mutual funds.
At this time, Funding Launchpad is focusing on matching buyers and sellers through crowdfunding. But it is quite possible we will enter, or become partners with companies that will enter, these adjacent markets.
12. Why did you choose this idea and concept to build “Funding Launchpad” based on?
One of our advisers, Brian Tsushiya, has been lobbying for the legalization of investment crowdfunding for years.
Brian Tsushiya has raised millions of dollars for previous startups and has experience with the challenges obtaining bank loans or investment from angel investors or venture capital firms.
13. What have you learned so far from launching your idea?
Interest in crowdfunding from startups and small businesses has been overwhelming. There are large audiences every time the Funding Launchpad co-founding team speaks presents crowdfunding.
Even though we have yet to launch our platform, our website traffic (FundingLaunchpad.com), blog (blog.FundingLaunchpad.com) and inbound comments have exceeded expectations.
14. Six months from now, what’s going to be your biggest problem?
Six months from now, our biggest problem will be maintaining our hands-on nature with companies raising money through our platform.
Today, the co-founding team is able to walk entrepreneurs through the entire process of determining whether investment crowdfunding is right for their businesses, completing their disclosure documents, and launching their campaigns.
As we expand, our growth will require us to hire additional team members to maintain that level of client service.
15. What’s the benefit for the customer/user?
Funding Launchpad considers its customers to be issuers using the platform to raise money, and its consumers to be potential investors.
Our customers received two benefits. First, of course, is the money they raise through our platform.
Perhaps even more important is the community of interested consumers who will evangelize their company and products.
For consumes, Funding Launchpad offers the ability to invest in startups and small businesses that meet their personal beliefs and offer a potential financial return.
16. How did customers/users find out about you?
Funding Launchpad has presented crowdfunding at events around the country. We estimate we have educated over 2,000 people on the topic.
We also have a highly trafficked blog (blog.FundingLaunchpad.com) that offers readers education, news, and views about crowdfunding. Our content outreach has generated a vast pipeline of inbound leads.
17. Who are your current customers/users? Who are your target customers/users?
Due to the complex nature of securities laws, we are not able to disclose our customer base, the companies issuing securities through Funding Launchpad’s platform, until after their offering is closed.
Our target potential investor is individuals, not institutions. They are generally youngers and more technically savvy than the general investing public.
18. Where do new customers/users come from and what makes new customers/users try you?
Funding Launchpad has presented crowdfunding at events around the country.
We estimate we have educated over 2,000 people on the topic. We also have a highly trafficked blog (blog.FundingLaunchpad.com) that offers readers education, news, and views about crowdfunding.
Our content outreach has generated a vast pipeline of inbound leads.
19. What do your customers/users say about your product and/or service?
Funding Launchpad has presented crowdfunding at events around the country.
We estimate we have educated over 2,000 people on the topic. We also have a highly trafficked blog (blog.FundingLaunchpad.com) that offers readers education, news, and views about crowdfunding.
Our proactive efforts to educate the public about crowdfunding indicates to potential clients our high level of knowledge and passion for crowdfunding.
20. How are you going to scale?
Funding Launchpad’s technology platform is built with scale in mind. Our biggest challenge will be maintaining the level of client service we have provided to date.
Today, the co-founding team is able to walk entrepreneurs through the entire process of determining whether investment crowdfunding is right for their businesses, completing their disclosure documents, and launching their campaigns.
As we expand, our growth will require us to hire additional team members to maintain that level of client service.
21. What’s the biggest missing feature? The one thing customers/users keep asking for?
The number one request we receive from issuers is for assistance finalizing their disclosure documents.
Currently we maintain a list of preferred suppliers. Over time we anticipate formalizing the process for building a list of nationwide suppliers.
We will also build tools to match issuers with the right suppliers based on their needs.
22. Are you going to internationalize? And if yes how are you planning to expand your start-up’s operations accordingly?
Currently, we have no plans on launching Funding Launchpad outside the United States.
Ironically, while it is expected that growth companies offer their products to global markets, capital markets remain primarily local to a company’s home country.
Further, we anticipate investment crowdfunding in the United State to be a growth market for the next decade.
23. How big do you think you can get? Why? And how you are planning to achieve your goals?
Based on data provided by crowdsourcing.org, we expect the global investment crowdfunding industry to grow from $472 million in 2012 to $3.3 billion in 2014.
That is 617% growth in just two years. Like a lot of Internet and social technologies, we anticipate a small number of players will hold dominant market share, delegating the rest of the industry to niches.
We plan on leveraging our legal and marketing expertise to be a market share leader.
24. Are you looking to hire a new workforce? And if yes, what job vacancies do you currently offer and where can potential applicants contact you at?
Funding Launchpad anticipates growing its workforce as our business expands.
Right now, our primary need is a front end user experience expert. We anticipate our next need to be client advocates, helping fundraising companies through the investment crowdfunding process.
Of course, like most tech companies, we are always open to meeting great developers.
25. Are you looking for partnership opportunities or funding from Venture Capitals (VC) or other funding sources? Or your business is self-sustainable? And if the first option applies where can potential partners / investors contact you at?
Please join us when we ignite the investment crowdfunding revolution. Potential investors can sign up for our beta at FundingLaunchpad.com. We also ask potential investors to follow us on Twitter (@FundingPad).
If you are interested in using investment crowdfunding to raise money to grow your business, please complete the investor questionnaire at FundingLaunchpad.com.
26. What advice do you have for fresh entrepreneurs?
Entrepreneurship is not easy, but it’s the best job you’ll ever have. If so pursue your dreams, work hard, and seek learning opportunities, rewards may follow.
27. Finally, do you have any other comments that you would like to add?
Earlier this year our blog featured an English soccer team, Darlington FC, that was selling itself to its fans through investment crowdfunding. Craig McKenna, who was running the crowdfunding campaign, described the prospect of investment crowdfunding best:
Crowdfunding works if you have the right business case or a compelling story… Crowdfunding is a way to help startups, small businesses – even entire economies – to pull themselves up.
