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📈 "Let's Talk About Equity Crowdfunding"

Business Casual

Photo by Austin Distel / Unsplash

Host: Kinsey Grant
Guest: Ken Nguyen, Co-Founder & CEO, Republic
Category: Biz & Tech | 📈 Investing

Podcast’s Essential Bites:

[3:19] “By empowering people to invest in the future that they believe in, we want to bring investment opportunities that they identify with, that they are passionate about […]. By being an early investor, you’re contributing and fostering the future that you want to see, the companies, the innovations, the technologies, the community that want to be living and working in for generations to come. That should not be a decision only made by venture capitalists. […] I think that’s something everyone should be a part [of].”

[5:58] “When people think of crowdfunding traditionally, they think of donating, [like] GoFundMe, or buying a product, like Kickstarter […]. Equity crowdfunding means investing. And the reason why it is so new and so unique is due to the fact that it used to be illegal for anyone who is not a millionaire to invest privately. […] In 2016 under President Obama the law changed that allowed for anyone of any income or net worth to be able to invest a small amount. And that gave rise to a very new industry, called equity crowdfunding.”

[10:15] “The limit [was] $1.07 million [of capital that can be raised through equity crowdfunding]. The result is that a lot of the more mature companies, which generally means better investment opportunity for the investing public, could not take advantage of equity crowdfunding laws. Now that the cap is […] lifted and raised to $5 millions, I think that’s going to usher in not only a whole new wave of adoption for founders, but it will enable us to present many more credible investment opportunities to the general public that we couldn’t have in the past four years.”

[14:01] “I think a lot of people, certainly regulators, and Wall Street had been holding this notion that […] public stocks are safer, are better for the general public. And we can see that that is not the case. The market terming, the trading market manipulation, the frenzy surrounding an active public market can be quite harmful […] for the general public. The private markets, earlier companies […] are higher risk, but […] if you enable people to invest a smaller amount in a diversified manner, you are not subjected to the kind of predatory market terming and trading activities that you see in the public market.”

[15:23] “If I am a stakeholder, if I am an early customer of a company, if I am an early buyer of a product, I should have the power to be a shareholder as well. So, that narrative of you as a stakeholder have the power to invest and be a shareholder, I think you’re gonna see that expectation being just a mainstream thing across the board in all different verticals.”

[19:00] “The way that I look at equity crowding is that it’s synergistic [to traditional venture capital], it’s additive to the ecosystem. In addition to picking companies that fit and meet the venture demands, we also onboard founders that currently don’t have the traditional venture validation […]. So, retail capital is gonna fund a wide swath of founders that have been traditionally underserved. […] Truly retail capital is opening up the capital sources for founders across a whole range of industries […].”

[28:07] “The question that any founder should ask is what else comes with this money, what value? When you’re backed by a well known VC, like Sequoia or Andreessen Horowitz, it comes with their vast expertise and network, they can open a lot of doors. When it comes to retail investing or equity crowdfunding, you’re covering 1,000, 5,000 customers into brand ambassadors. […] We have seen the value that companies that have successfully raised on Republic in seeing the community producing more revenue, driving partnerships. It’s really incredible how powerful the added effect of retail capital has proven to be.”

Rating: 🍎🍎🍎🍎

🎙️ Full Episode: Apple | Spotify
🕰️ 39 min | 🗓️ 03/15/2021
✅ Time saved: 36 min

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