BOULDER—Two blocks from Edward Jones' Gunbarrel office, in an easy-to-miss shared space, one company meets regularly hoping to change the way investment happens in America.
Funding Launchpad's team mostly works remotely, but when they are in the same room it's usually here. Their service is already in use by companies from Brooklyn on the east coast to Washington state on the west – businesses looking for investors.
"We want to see entrepreneurs get funded," says Dave Milliken, Funding Launchpad's Chief Marketing Officer. And by some measures they've already succeeded: a general store in Port Townsend, Washington raised $500,000 using FundingLaunchpad. CourAgent, a four year old company based in Fort Collins, is raising money to research and produce a miniature printer.
Crowd funding, of course, is nothing new: services like Kickstarter regularly make headlines by helping to fund everything from robots to movies. By now the format is familiar: donate money to a company making a potential product or a band putting together an album. When the product is ready, you get a reward – the robot itself or a special edition of the album.
Funding Launchpad is different: in place of rewards it offers equity in a company.
"It's not just a fad," says Milliken, "it's an investment."
That's not to say such investments are simple. Companies using Funding Launchpad need to register their offerings state-by-state, depending on where their investors live.
"It's complicated," says Milliken. "I would argue that this is not a technology company. What this really comes down to is understanding securities law and finance."
So while the Funding Launchpad team includes developers they're joined by others. Shane Fleenor,the Chief Legal Officer, is a Harvard-trained lawyer who worked in various corporate and hedge funds in New York City before deciding he wanted to spend time in Colorado. Phil Filgin, who consults with Funding Launchpad regularly, is the former Colorado Securities Commissioner. Milliken's background, meanwhile, is marketing at companies including Coors, Smashburger and Scott's Miracle Grow.
This experience is combined with a web platform for raising funds that Milliken says is easy to use: "It's all basic forms," says Miliken, adding that for users there is "no coding and no programming" required.
"We want to be a part of the innovation process," says Milliken. "It's hard to raise capital right now, and that's just required."
Why not just use Kickstarter?
Many looking for funding today turn to Kickstarter. Milliken understands why, but suggests it's not for everyone.
"You spend money to raise money on Kickstarter and then you need to very inefficiently fulfill what you've pre-sold," said Miliken. "You're doing first-batch runs, small production runs. Generally, no matter how much money you raise, don't expect to have much money in your bank account after."
Miliken is quick to say Kickstart is "amazing" for first runs; the problem is if you need cash in hand for research.
"What we're offering is a longer-term concept," he says. "With the investment-based model your goals are deeper: you want to like the entrepreneur, but you also want to believe that they can take a business from point a to point q."
CourAgent, for example, is a four year old company with $1.9 million in revenue last year. They want to bring a new mini-scanner to the market and are using Funding Launchpad to raise money for research and development.
"There is no specific window of delivery," says Milliken.
The platform is connecting the company with capital.
"All the investors they've had so far are completely new people, people they wouldn't have found before this process," says Milliken.
How to invest
For investors the process is simple. Head to the Funding Launchpad page of the project in question and enter how much you're willing to invest. Optionally you can share the reason you're investing, lending your credibility to the project.
Once that's done you can fill out all the documents you need in order to invest, digitally; later you're emailed instructions for sending the money to the company. The cash sits in escrow until the minimum investment, set by the company you're investing in, is met. If the goal isn't reached your money is refunded.
How to use Funding Launchpad
Want to use Funding Launchpad for your company? The cost of doing so, currently, is fixed at $1995 per listing according to Milliken. A percentage-based system is coming later, according to Milliken, but "right now we're trying to attract people."
Interested companies should head to FundingLaunchpad.com to get in touch.