A cross-country trip on the Amtrak brought an eclectic team of techies to Fargo yesterday afternoon. They’re the team behind Wefunder, an equity crowdfunding platform that allows anyone, not just accredited investors, to invest in startups.
The team was founded by three entrepreneurs: Nick Tommarello, Mike Norman, and Greg Belote.
It began because they saw a consistent problem when it came to accessing capital. Often they had friends who wanted to invest in their startups, or had startups they wanted to invest in themselves. But legislation made it illegal for the average American to invest in a startup without being an accredited investor (aka very wealthy).
The Wefunder team got behind a few bills that were in front of the Senate to change how investing works in the startup world. With hundreds of backers on a petition, the entrepreneurs-turned-law-gurus ended up in the President’s office sharing their concerns as startup founders.
“And people were actually listening to us,” said founder Nick Tommarello, laughing. “We’re just tech guys in Boston who wanted to actually learn how startups can raise money.”
It worked. On April 5, 2012, Tommarello, Norman and Belote watched President Obama sign the final bill that will change the investment landscape for startups.
The bill, called the JOBS Act, or Jumpstart Our Business Startup Act, will be effective on May 16, 2016. This new law eases security regulations for startup investments, allowing for equity crowdfunding. Or, as the Wefunder team puts it, it makes investing “not just for rich people.”
“People like supporting things they believe in, and if it works out they get equity so they make money,” Tommarello explained.
“This means more access to capital for everybody,” said Mike Norman, Wefunder President.
Their work brought Wefunder national media attention. They were backed by startup incubator Y Combinator, and have since raised a total of $1.4 million via investors on their own platform.
Already the Wefunder platform has raised over $16 million for 111 startups, through 52,287 investors. Come May 16 they hope to see that jump up even more.
The Cross-Country Quest
Now the team is on a quest to spread the word with startups outside the thick-walled bubble of Silicon Valley. They are trekking across America via Amtrak, visiting 12 cities in two weeks: San Francisco, Portland, Seattle, Whitefish, Fargo, Chicago, Detroit, Cleveland, Pittsburgh, NYC, Providence, and Boston.
“When you live in Silicon Valley, you get kind of warped to think everything only happens there,” Tomarello said. “That clearly is not the case.”
At each city they are meeting with a host of startups, and will choose 20 businesses to feature nationwide. Three of those business will get a $100,000 Wefunder investment up front in April. This includes “startups, restaurants, boutiques, breweries, and more,” according to the website.
The team came into Fargo yesterday from Whitefish, Montana, where they were amazed at startups like cherry tree juice farms and others. In Fargo they met with a few local startups including dogIDs, Posterboard, Botlink, Fargo 3D Printing, Rosey’s and Midwest Streams.
They also took time to visit Sandy’s Donuts, where co-founder Greg Belote continued his goal to eat a donut in every city.
Tomarello said they have already received hundreds of applications. He has not set a date for when the final startups selected will be announced, but whatever startups are chosen will receive nationwide attention come May 16, he said.
At 2 AM this morning, after a night karaoke at Dempsey’s, the team boarded the Amtrak once more to head for Chicago. But not before a celebratory toast, where the team declared, “Fargo is awesome.”
Happy travels, Wefunder crew.
Photos courtesy of Emerging Prairie.