In the past 20 years, the geography of early-stage startup fundraising became so concentrated that people didn’t just talk about VC firms located in “Silicon Valley” or “San Francisco.” They talked about a street: Sand Hill Road, just off El Camino Real in Palo Alto.
That created a vibrant scene in and around the Bay Area, but it left a heap of talented founders out in the cold — founders like Mongolia’s Nauren Batjargal, COO of Erxes.
“We have a non-traditional team, at least in terms of venture capital, since the large part of our team is Mongolian and still based in Mongolia. When it came time to raise funds, our upper management was just spending too much time trying to build relationships with professional investors.”
Spending lots of time trying to convince investors was even more frustrating since they’d convinced over 25,000 users already, including 20+ large enterprises. The team wanted to refocus, building more and more bricks to create a complete business experience operating system (XOS), a marketing platform that brings together experience from each of a company’s various departments.
When COVID-19 first hit, the team saw that they didn’t have a choice anymore. Despite having raised $600K in early-stage funding, all traditional fundraising routes closed during that turbulent period.
“All our in-progress deals stopped, everyone panicked, everything froze. We had to find a different way to raise funds, and that’s when we found Fairmint.”
Using Fairmint as a portal to community ownership immediately made sense to the team, since Erxes had been an open-source solution from the beginning — a rarity in the MarTech space.
“For us, being open source goes hand-in-hand with the idea of community ownership. Fairmint exactly fit our needs, letting us raise money from our community, which wasn’t frozen in place, but was actually growing.”
After having spent so much time on fundraising before, the co-founders were happy with how quickly their offering got up and rolling. From the rolling SAFE to their own branded investor portal to the “Invest” button on their website, Fairmint’s solution had everything they needed.
“When you get started, there’s some work to do at the beginning. We had to set up our rolling fundraising and our investment portal… but once that’s done, that’s it! And now we get to focus on production, not fundraising.”
Their community-centered ethos has translated into real success on the fundraising front. Nauren notes that Erxes’ offering has attracted over 120+ investors, who have provided over $2.7M+ in capital so far. Those investors come from a wide range of backgrounds, including many who first discovered the company thanks to being users of their solution.
“We have developers, angels, open source users, tech agencies, all kinds of profiles. We’ve had multiple business partners start working with us, and who have then invested in us. It really can be anybody.”
Erxes nourishes their community with information and updates on their progress. It’s not just a way to keep their investors informed, it’s also a way to keep the offering rolling right along.
“We do monthly investor updates, talking about what’s been shipped, what’s coming in the near future… It really helps to keep them involved. And some people turn investing into a regular thing as well. For example, we have an investor, who happens to be a regular office bloke, and he invests regularly in Erxes every two months.”
They also get one of the big bonuses to a rolling offering: knowing that even when you’re not in the office, even when you’re at home sleeping, there might be someone going through the automated KYC and investment process on Fairmint.
“We recently had the new year celebrations here in Mongolia, so everyone was out of the office for a few days. When we came back, we had two new investors who’d put money in! We didn’t have to touch anything, all of it was through the Fairmint portal — done.”
