Fundraising story: From $0 to $5.8M with a simple “Invest Now” button
Fairmint was launched to flip the tables by offering founders a new — and better — way to manage equity.
And to prove that it’s possible for all founders to raise money from their community by putting an “Invest Now” button on their website, we decided to put it into action ourselves.
That’s how the team arrived at February 19, 2020, launching Fairmint’s rolling offering.
We didn’t know how it would go, because nobody had really done it. The idea of not raising individual rounds, pre-seed, seed, Series A, Series B, but instead simply putting a certain amount of equity on sale and raising money throughout the life of the company, was totally new. And even though we had help from some great lawyers, we didn’t know how it would go in terms of investments.
To say that things started slow would be an understatement 🙂 It took 6 months to raise the first $150K — and that’s including $40K of co-founder money 🙈
But we used that money to get to our v2.0 legal template for rolling offerings, one that was solid enough — legally & financially — to let other people use it. Releasing it in September 2020 got us a shot of momentum. We got new investors and previous investors put more money in; for example, one person who had put in $10K in April saw our progress, wrote to us in October saying keep up the good work, and put in another $100K.
We kept tweeting and updating our existing network. We could feel the momentum building as professional VCs began investing alongside our original community. Talking with them, we understood that our valuation was attractive, matching our product development in a way that they really liked. Over the next 3 months, we hit the $1M mark.
We had originally decided to put about 10% of the company’s equity into the offering. As our fundraising started to gain traction, we decided it’d be a good idea to increase the amount of equity we were offering, since that would provide more room for new investors to get in at attractive valuations, and thus also let us raise more money. So to celebrate the 1-year anniversary of our offering, on February 18, 2021 we announced that we were raising our equity allocation to 32%.
That announcement was kindly received.
In the 90 minutes after that tweet was published, we raised $350K. Our Slack channel for new investments was going nuts, we’re getting pinged constantly for checks of various sizes — $5K, $2K, $25K, even $100K… It was a surreal feeling.
(Sure, you can dream about things working like that, but there’s a big difference between imagining it and experiencing it. And it really is incredible to wake up in the morning and see who invested in your company while you were quite literally sleeping.)
So we were riding high. We kept plugging along, developing more features and growing the organization. We were able to install the live “Invest Now” button on our website, creating an almost-frictionless process for our investors.
Then one day in early March we got an incoming message from Tim Draper. We’d met him about a year earlier, and now he wanted to catch up, inviting us to a Zoom meeting. (One beautiful aspect of rolling fundraising: we don’t have to actively reach out to investors; since they can invest at any time, they reach out when they’re interested.)
That meeting was when we confirmed the power of what we were building, since the “Let’s catch up” turned out to be more “Let’s do this”. He had his team on the line as well, including their lawyer, and after 30 minutes he was ready to invest. He looked over at his counsel, got a thumbs up, picked up his phone and his passport, and started the identity verification process on our website.
It all worked perfectly. He got to the “Investment Amount” part, and we’re watching Tim live on the screen. We asked if he’d be ok with us recording the moment for posterity:
$2–0–0–0–0–0
“Sweet! Tim Draper, one of the most respected VCs in the industry, is putting in two hundred thous-”
Two million dollars. By hitting the “Invest Now” button on the Fairmint site. In a matter of minutes.
Things didn’t stop there, though. With Fairmint, each investor creates and closes their own personal deal — Tim had his, and since then we’ve had dozens more who have done the same, with whom we’ve collectively raised another $1.8M!
That growing momentum has meant that since September 2020, we’ve always raised more money each month than we’ve spent — and that’s despite increasing our spending as the company advanced.
Doing that, of course, means nurturing your community and updating them on your progress. But with rolling fundraising, you aren’t doing it because you’re trying to fundraise; you’re doing it to keep them engaged with the progress being made on achieving your vision and a great product.
Fundraising with a Rolling SAFE:
- Is about putting energy into building your community (in the broadest sense), not into a time-consuming investor roadshow. That community can include professional investors and angels, sure, but also fans, early adopters, employees, business partners… This is how we can really turn stakeholder capitalism from buzzword into reality.
- Lets every sales call also be an investment pitch. If people love what you’re selling, there’s a significant chance they will want to sign up and invest. Right then. It’s what we refer to as “negative customer acquisition cost” 😉
- Turns your business momentum into fundraising momentum. You can focus on delivering greatness to your customers, not on reaching out to investors. Investors make decisions based on signal, and the best signal is customers loving your product: the more happy customers you have, the more you’ll raise.
Like this post? Clap 50x and share on social! Love what we’re building? Head to fairmint.com and check out that “Invest Now” button 🥳
