March 8, 2013
WeSparkt connects startups in clean tech and renewable energy, health, education, and sustainability with accredited investors (defined by SEC income requirements). Startups can raise around $50,000 to $200,000 on the platform in exchange for equity.
To protect investors, WeSparkt puts startups through a screening process. Investors can ask them questions via live chat or online discussions. And groups of investors putting in funds can work together on the due diligence process.
WeSparkt’s beta test comes after the JOBS Act passed last year, nominally allowing startups to raise funding from non-accredited investors (i.e., you and me). But because those rules won’t be implemented until later this year, WeSparkt is focusing on accredited investors (as is AngelList). Another big player, Crowdfunder, is waiting out the time doing contribution-based funding similar to Kickstarter.
Below, cofounder Jon Blanchard explains the journey that sparked WeSparkt.
Tech Cocktail: What was the inspiration behind WeSparkt?
Jon Blanchard: My inspiration for WeSparkt came about a year ago when I was working with a social enterprise startup that was trying to raise capital. The company had strong sales and an experienced team, but I saw in pitch after pitch that their social mission didn’t resonate with the professional investors we were pitching to. I became convinced that there was a crowd of investors out there that would be excited by both the financial prospects of the business and the company’s positive impact, but few mechanisms were in place to connect with them. Then, the JOBS Act was passed, and the idea of WeSparkt was born as a platform to bring a community of impact investors together with social impact startups raising capital.
Tech Cocktail: Describe a challenging moment for WeSparkt.
Blanchard: WeSparkt began as an equity crowdfunding platform for social entrepreneurs. The JOBS Act holds a lot of promise for “democratizing” startup investing and funding good companies that get overlooked by the professional investor crowd, but it became increasingly clear toward the end of last year that the equity crowdfunding provisions of the JOBS Act would not take effect for some time. My cofounders and I sat down to chat about how to best use our runway and get into the market. We pivoted slightly to launch for accredited investors, who are individuals who can invest in startups under the SEC’s current rules. We knew a lot about the unaccredited investor crowd, though, and needed to get smart quickly on our new customer base. We’ve handled it so far by speaking with anyone and everyone who will sit down with us and learning as much as we can, as quickly as we can. Eventually, when the provisions of the JOBS Act do take effect, we envision allowing unaccredited investors to invest alongside our current accredited investor crowd.
Tech Cocktail: What’s one quirky fact about your team?
Blanchard: Early on, the three cofounders went on a road trip to a business plan competition in North Carolina. Somewhere along the way, we stopped into a gas station that had an entire glass case of big pewter dragons. This was the weirdest thing we’d ever seen in a gas station – we couldn’t get over these dragons being sold for hundreds of dollars in a gas station along this rural highway. We decided then and there that if we won the competition, we’d be heading back to that same gas station to buy ourselves a dragon. The rest of the weekend we talked about “slaying dragons” as our one focus – and even though we didn’t win, we’ve never lost the goal. We have milestones that, when achieved, will trigger us going back to that same gas station to buy that pewter dragon. That’s why while most founders are “hustling” for their startups, we’re out “slaying dragons” every day.
WeSparkt was a showcased startup at our Tech Cocktail DC mixer in February.
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