Tech Transfer eNews Blog

Equity crowdfunding platform boosts diversity in innovation ecosystem

By Jesse Schwartz
Published: October 25th, 2018

Equity crowdfunding platform may be part of the answer to overcoming gender and racial disparities in start-up funding and other aspects of innovation activity.

According to a recent study from the Harvard Business School, women, Hispanics and African Americans combined make up less than 15% of the entrepreneurial and venture capital work force. Kendrick Ngyuen, CEO of crowdfunding platform Republic, says platforms like his can change that imbalance by giving equal access to anyone who wants to invest in vetted start-up companies and providing an alternative funding resource for women- and minority-led businesses.

In two years, 25% of investments on Republic, totaling roughly $1.8 million, have gone to start-ups with underrepresented founders of color, while 44%, or roughly $3.3 million, have gone to companies with a female founder, as compared to 1% and 13%, respectively, for the traditional VC industry.

Ngyuen attributes Republic’s statistics with to the diversity of its crowd investors. “The demographics basically represent the entire tapestry of Americana, from Miami to Seattle to New York,” he says. “It’s a pretty even mix … mostly people in the 35 to 50 age range so far.”

Start-ups that are accepted by Republic receive ongoing support, advice and mentorship. An account manager helps founders through the fundraising process, and Republic provides them with access to its vast network of traditional VCs for potential future fundraising.

“It’s very much an ongoing, a continuous relationship,” says Nguyen. “At Republic, because of our mission, we’re essentially an investor in each and every single company. So there’s that alignment and interest on our end to help each of these companies succeed. We view all our companies as long-term partners.”

Republic boasts a 95% percent success rate for its campaigns, which Nguyen attributes to both the platform’s strict vetting process and the excitement of the average person being able to invest in the next big thing.

“On sites like Kickstarter and Indiegogo, you’re just buying a product,” he says. “AngelList does offer equity, but it is for the rich, accredited investor. However, Republic allows everyone to invest as little as $10 to $20 of equity in some of these companies. It’s better than reading a story … These are real people who are solving real issues.”

Source: Entrepreneur

Posted under: Tech Transfer e-News

Twitter Facebook Linkedin Pinterest Email

No Comments so far ↓

There are no comments yet...Kick things off by filling out the form below.

Leave a Comment