Did you know that 90% of Gen Z think it’s important to invest now to prepare for their futures? Snowball.xyz, a media startup that is making investing accessible and fun, certainly does. They’ve found a perfect market fit with younger audiences who are interested in investing advice, traditional finance (TradFi), and decentralized finance (DeFi).
With over 37,000 subscribers, $400,000 of ARR, and $1 million+ in fundraising so far, it’s hard to believe that Snowball started in 2020 as a Substack newsletter written by Yoann Lopez, former CMO of COMET, a freelancer marketplace.
“Right before the first lockdown I decided to launch a small side project, which was a newsletter about personal finance,” Yoann explains. “I wanted to share what I was doing with my money, my methods, and more practical stuff. But my small side project quickly grew. A lot of people subscribed and got into it. It was turning into something bigger so I decided to work on it full-time in August 2020. At this time I had already started to monetize the newsletter.”
When it came time to raising money, Yoann knew exactly how he was going to do it. During his experience as CMO in various startups, he had met the founders of Fairmint and connected with them as a firm believer in community play. When it came time to raise money for his own company, he knew that Fairmint would be the perfect tool.
“When I started my company, I knew that Fairmint was the perfect option for me because it’s very community-centric. People seem to be quite engaged. And on top of that, it’s in the same universe as my company. Snowball is personal finance education.”
Fairmint fits into Snowball’s company mission perfectly, “to reshape the way human beings (like you and me, and not only crypto maximalists or pro-traders) manage their wealth by getting the best out of TradFi, and DeFi on Web3 x Web2 foundations.”
“If Snowball is successful, I would prefer to have regular people taking advantage of our growth rather than VCs,” Yoann says. “It’s more logical to me that my community be a part of this adventure.”
So how did Snowball raise over $1 million using Fairmint? Here are three ways they did it:
Before he raised anything, Yoann wanted to see if his community was even open to investing in Snowball. “I sent a survey to my community asking if they would invest in Snowball through Fairmint. I think probably 1000 people said they would like to for a total of several million. When I set it up a month later, many of them actually invested.”
To start building the Snowball product (a super-app that enables users to trade stocks, crypto, startups, collectibles, and more), Yoann decided to unlock a $10 million valuation. He wanted to sell 10% of Snowball’s equity to the community, so he decided to raise $1 million. “My goal was just to reach $1 million. I didn’t want to raise my valuation too high. I had to stop the fundraising when it was live because of that. I’m guessing it could have gone past $2 million.”
A smart thing that Snowball did was create an extensive user guide for their community to invest through their portal. The guide goes through every question a future investor may have, such as the risks associated with investing, a product roadmap that extends a few years into the future, and detailed instructions on how to send their investments.
“I wrote a long and extremely detailed investor memo because I’m very transparent. That’s why people are more trustful. I’ve been very transparent with all my business since Day One, in terms of revenue, number of subscribers, basically everything.”
Snowball branded the Fairmint portal as their own and created a simple link to access it.
They also encouraged users to use the Fairmint simulator to envision their returns. By putting in the $SNOW inputs (Valuation floor: $10,000,000 / Equity allocation: 10% / $SNOW Price: $10), future investors could see how much their investments were potentially worth.
“I did a lot of tutorials with my community in order to see if it would be simple for people to use. I was able to answer people’s questions and considering that a large number of people invested, it means it was pretty simple. I think all the explanations in the memo really helped. It’s money and they don’t want to make a mistake. Most of my investors are just people just like you and me. Everyday, regular people — for most most of them it was their first investment in a startup. “
The results? A fundraising round that exceeded expectations.
“Out of all the people who responded to our surveys saying they would invest, more than a third actually did. We raised more than we expected: over $1.6 million.”
Amazing! We love hearing stories of how community ownership is changing the new wave of start ups. If you were inspired by this story, check out more founder stories.
