EP 484: $7M Raised with StartEngine CEO and CrowdFunding SnapWire CEO
Ron Miller, CEO of StartEngine,who was in Episode 40 of The Top and Chad Newell, CEO and founder of Snapwire. Listen as Ron and Chad explain how the new rule of SEC in equity crowdfunding helped their companies. Famous Five: Favorite Book? – Ron: The E-Myth What CEO do you follow? – Chad: Sean Malarkey Favorite online tool? — Ron: Internal Email / Chad: Google Sheet Do you get 8 hours of sleep?— Ron: No If you could let your 20-year old self know one thing, what would it be? – “It’s all about confidence.” – Ron Miller Time Stamped Show Notes: 01:40 – Nathan introduces Ron and Chad to the show 02:30 – StartEngine is the nation’s leading platform that allows entrepreneurs to directly connect with potential investors to raise capital 02:45 – The new law opened up the possibility for everyone to become an investor 03:11 – It allows companies to advertise broadly 03:24 – StartEngine was launched in June 2015 03:30 – Total amount invested is $20 million 03:42 – 60,000 unique users have joined their community 04:00 – StartEngine charged 5% of the total capital from the proceeds raised 04:20 – Entrepreneur can raise up to $50 million a year in the online public offering and StartEngine charges $50 per investor 05:10 – “We are currently focusing on the US market and there’s no SaaS in there” 05:30 – What made Chad decide to use StartEngine 06:40 – Why StartEngine is ground-breaking 07:00 – The congress’ limitation on investing in a company 07:31 – “Real wealth is made by being an early investor” 07:54 – The new law is a radical shift 08:51 – Nathan believes that the best investors are customers 09:10 – Snapwire has 300,000 photographers in the platform 09:22 – Buyer ratio is much smaller than the photographers 09:45 – Snapwire has pay-as-you-go and a SaaS model 10:08 – Snapwire’s revenue is 50% from pay-as-you-go and 50% from SaaS 10:20 – 9,000 images have been bought in Snapwire since their launch 10:30 – Snapwire was founded in 2014 10:34 – Snapwire has raised $2.8 million 11:15 – Snapwire raising in StartEngine opened up a lot of opportunities 11:45 – Can you use StartEngine after a price round? 11:52 – The main advantage is that companies can set their terms 12:03 – Some companies have to essentially create a second priced or non-priced round 12:58 – The good thing about equity crowdfunding is you have to disclose everything 13:08 – Disclosure statement is clear 13:41 – Lawsuits and CAP table 14:10 – There’s a disclosure and subscription agreement that investors sign 14:30 – “I think there’s an immersion of risk” 16:14 – There are limits to investments and to returns 16:28 – During crowdfunding, there’s also a limit on the amount of investment that a company will accept 17:00 – “As far as information rights, you can be very clear in the disclosure” 18:00 – It is not allowed to give out public information even if it is unintentional 18:15 – Upon investing, you will get a shareholder report that is in compliance with security exchange commission requirements 18:40 – “Competition can’t reverse engineer your strategy in execution” 19:06 – StartEngine has 12,000 – 14,000 investors 19:20 – Total of 15-18 companies have raised in StartEngine 19:30 – 14 team size in StartEngine 19:36 – StartEngine raised capital through seed round and Series A 19:47 – Total of $7.7 million raised 19:54 - Ron didn’t use their platform to raise 20:25 – Average value of an investment is $1400 20:40 – StartEngine’s biggest competitors are Seed Invest, Next Seed, WeFunder and Flash Funder 21:11 – What should people look for in the marketplace? 21:23 – If certain companies are establishing themselves in a specific niche area 21:43 – Success rate of the companies 21:57 – Support the companies can provide to entrepreneurs 22:13 – Connect with Ron through his email 22:34 – Contact Chad at Chad@Snapwi.re 24:53 – The Famous Five 3 Key Points: Real wealth is made by being an early investor. The good thing about equity crowdfunding is the disclosure. Be confident in yourself. Resources Mentioned: Toptal – Nathan found his development team using Toptal for his new business Send Later. He was able to keep 100% equity and didn’t have to hire a co-founder due to the quality of Toptal developers. Host Gator – The site Nathan uses to buy his domain names and hosting for the cheapest price possible. Freshbooks – The site Nathan uses to manage his invoices and accounts. Leadpages – The drag and drop tool Nathan uses to quickly create his webinar landing pages which convert at 35%+ Audible – Nathan uses Audible when he’s driving from Austin to San Antonio (1.5-hour drive) to listen to audio books. Assistant.to – The site Nathan uses to book meetings with one email. Acuity Scheduling – Nathan uses Acuity to schedule his podcast interviews and appointments Drip – Nathan uses Drip’s email automation platform and visual campaign builder to build his sales funnel. Ron@StartEngine.com – Ron’s email address Chad@Snapwi.re – Chad’s email address Show Notes provided by Mallard Creatives