UpTech and Wunderfund are partnering to develop a unique new funding opportunity for startups. Startups accepted into the UpTech accelerator will continue to receive an investment of up to $50,000 from UpTech; with this new partnership, startups that meet all of UpTech’s milestones can also now launch an equity crowdfunding campaign on Wunderfund.
This partnership will allow startups to leverage the final milestone investment of $10,000 as the seed to kickstart their crowdfunding round. They can then publicly solicit up to $1 million in additional funding.
The idea for this partnership began as an attempt to solve several common funding challenges:
1. Angel Activation – There aren’t enough angel investors out there despite the presence of plenty of capital. This is largely due to high buy-in and limited exposure/experience. Most investment minimums in startups or funds are approximately $25,000, which is a substantial barrier to entry into the angel investing world. The UpTech/Wunderfund partnership changes this by lowering the table minimum to as little as $50, coupled with additional education for investors.
2. Bridge Funding – $50,000 is a lot of money; however, startups often need more capital than this to survive the time between an accelerator and their seed round. Activating this new funding opportunity during the UpTech program can provide more money for startups to get to a proper institutional round of funding.
3. Democratization – Typical SEC offerings (such as Reg D) are private rounds limited to accredited investors; this cuts out 97% of the population. Title III of the JOBS Act (aka Regulation Crowdfunding) changed this in 2016, as any type of investor is now able to buy in to startups. The goal of the UpTech/Wunderfund partnership is to create an inclusive and diverse investor pool with the purpose of educating and exciting a future of potential startup investors (or Future Angels). Unlike Kickstarter or Indiegogo, investors on Wunderfund become more than just a donor — they become an owner in the startup.
Positive impacts from this partnership will be immediate. Eligible startups can publicly solicit for funding at UpTech’s Demo Day and online. Investors in the UpTech Fund and in the crowd benefit from the power of each other’s investments by acting as a new form of investor syndicate. A growing base of new investors will be able to engage and learn about angel investing as they can now put skin in the game at a lower threshold.
Founder and CEO of Wunderfund Marvin Abrinica had this to say about the platform: “Equity crowdfunding is a great equalizer for both startups and small investors. Entrepreneurs who have traditionally had less access to capital, such as women and minority-led startups, are increasingly turning to crowdfunding to level the playing field. Now everyday Americans can invest alongside angel investors. It’s a giant step towards economic equity for all.”
Managing Director of UpTech JB Woodruff added: “Equity crowdfunding is still relatively new, but I believe by coupling it with the established funding model of accelerators we have found a way to accelerate its place as a viable startup funding strategy.”
UpTech is currently seeking applicants for its UpTech 7 program that will begin this September. Applications close on July 1st.
