We have occasionally mentioned crowdfunding as a new option for raising early funding for cleantech startups. One of the more popular sites (WeFunder) has just published its results, and they may surprise many. Over the period 2013-16, 119 companies attempted crowdfunding, and 98 succeeded. If an investor put $25,000 in equity into each of the 98, that $2,450,000 investment would have grown to $9,569,549 by now, based on estimated increased valuations either from subsequent funding events or comps. That’s a 3.9X multiple in this hypothetical. Eleven of these companies are now valued at over $100 million each. The group raised $2.2 billion in follow-on funding, with 40% raising over $3 million each in their Series A rounds. Most of the 98 were software- or computer-related. There were two cleantech investments which grew more slowly than the average.
While the results may not be spectacular, they actually were better than the averages achieved by the top quartile of all VC firms. These data indicate that crwodfunding, done well, could be a viable fundraising and investment option.
ABOUT THE AUTHOR
Gary Simon is the Chair of CleanStarts Board. A seasoned energy executive and entrepreneur with 45 years of experience in business, government, and non-profits.