Investing in startups is no longer limited to big institutional venture capital firms and millionaires. Changes with the JOBs Act of 2016 opened up the opportunity for Average Joes, known in the investment world as “unaccredited investors,” to invest as little as $100 in the startup marketplace through equity crowdfunding. Now two years later, Dig – The Dog Person’s Dating App is the first Louisiana-based company to launch an equity crowdfunding campaign with online portal Netcapital.
“We constantly hear from thousands of Dig users and social media fans that they want to see Dig grow,” said Leigh Isaacson, CEO and Co-Founder of Dig. “Now, low investment minimums and this easy platform will empower Dig users and fans to support us and even own a piece of this company they believe in.”
Louisiana isn’t known for big checks and ample investments. However, Isaacson believes there’s a palpable enthusiasm for the startup community in New Orleans, and smaller investors will be interested in getting involved in the startup ecosystem through this new opportunity.
“We’re ecstatic to join Netcapital as their first partner in Louisiana, and we hope we can show the rest of the country that there are exciting companies emerging from here in New Orleans,” said Isaacson.
Over the past two years, Netcapital has been one of several portals creating unprecedented access to startup investments online. Since the JOBs Act changes first made this type of investing possible, the crowdfunding market has doubled in growth each year. Now, online investing in startups is well on its way to surpassing $1B per year, according to Crowdfund Capital Advisors.
Louisiana ranks 43 out of states that use equity crowdfunding (also known as regulation crowdfunding), according to Max Crawford, who runs the data index on regulation crowdfunding at StartEngine. Crawford says to date, companies in Louisianna have raised just $199,089 through regulation crowdfunding. For context, $156M has been raised across the US since May 2016. Before Dig, no Louisiana-based companies had raised money through Netcapital, and only one Louisiana-based company, Life Recovery Systems out of Alexandria, raised money through the portal StartEngine.
Chris Lustrino is founder and CEO of KingsCrowd, a research, recommendation and analytics platform for the equity crowdfunding market. Lustrino says equity crowdfunding is a new way for the most innovative startups to raise capital.
“Platforms like Netcapital, StartEngine and Wefunder have made startup investing accessible not just to the 1%, but rather to all of us regardless of wealth level. With minimums typically as low as $100, we can now own real equity in companies at an investment size that is comfortable for all of us,” said Lustrino.
Lustrino’s company, Kingscrowd, also got its start by raising funds through the equity crowdfunding portal Netcapital. Of that experience, Lustrino said, “we raised over $120K from 100+ investors and in doing so we built a loyal and focused early adopter user base that is helping us to achieve our goals as an organization.”
This is just the second holiday season Netcapital has been active, and already they’ve closed 41 deals through their portal with an additional 16 currently actively raising on the site along with Dig. The most frequent investment size through NetCapital is just $100, and the average investment size is $2,469.
As Netcapital’s CEO Jim Frishman said on CNBC’s Mad Money, you have companies today such as Spotify, Uber, Airbnb and, “all of the value that’s being created by those companies are being held by accredited investors who are getting in before the IPO. So, Netcapital solves that problem.”
All investors must acknowledge and accept the high risks associated with investing in private securities offerings, including holding investments for periods of many years with limited or no ability to resell, limited access to periodic reporting and losing the entire investment. However, Netcapital makes it easy to find, review and invest in the opportunities.
“There are really two things that we have to do,” said Frishman on CNBC. “Number one is we have to generate access and allow you to get access to these hot new deals or exciting innovative ideas that entrepreneurs have. The number two is we have to lower that minimum investment down so you could invest ninety-nine dollars.”
A star-studded advisory board filled with industry leaders backs NetCapital. Advisors include:
– Founding Chairman and CEO of napster John Fanning
– Founder Personal Capital and former CEO of PayPal and Intuit Bill Harris
– Former CEO of Sprint Dan Hesse, the Co-founder and CEO of DraftKings Jason Robins
– Former Chairman and CEO of Verizon Ivan Seidenberg
– Former President of Strategic New Business Development for Fidelity Investments Roger Servison
“There’s a universal understanding of the importance of dogs and love,” said Casey Isaacson, Chief Creative Officer and Co-Founder of Dig. “We’re excited to work with the experts at NetCapital as we share the message of Dig – The Dog Person’s Dating App and grow with the support of Dig fans.”
To learn more about investing in Dig through NetCapital, visit Dig’s Offering Page here.