Why is Chisos Crowdfunding on WeFunder?
On Monday, our public equity fundraising seed round opened on Wefunder. Why did we decide to raise our operating capital via crowdfunding?
Because crowdfunding is fundamentally democratic.
We believe that more people deserve a chance to become entrepreneurs, and that more people deserve a shot at supporting them.
With crowdfunding, everyone’s invited to gain an ownership stake in our fund.
But the bigger picture is even more compelling: startup funding is overdue for disruption. Here’s why:
- Less than 1% of new businesses receive VC funding & less than 18% of businesses can access bank funding. (Kauffman Foundation)
- Traditional VC’s failure to invest in entrepreneurs who are women and people of color amounts to a $4.4T blindspot. (Morgan Stanley)
- More than 50% of Gen. Zers want to start their own business. (Forbes)
We believe that it’s time to rethink the startup funding landscape, in all its dimensions.
We started Chisos to reimagine who gets funding, when, and how. More folks deserve a chance to be entrepreneurs, and we built an investment approach (the CISA) that makes it possible.
That also means inviting more people to become investors themselves. Crowdfunding embraces that democratic ethos.
To get even more specific, crowdfunding was the right choice for Chisos to raise our seed round because:
- Our initial business model - an emerging asset manager - doesn’t check the VC investment box, and is tough to bootstrap; a 2% management fee doesn't amount to much in the early days. (We’re one of those startups that isn’t a fit for traditional VC.)
- An entire thesis of our business revolves around community and support of the founders we invest in. Equity crowdfunding brings an entire new group of supporters into our ecosystem that are motivated and financially incentivized to help Chisos and Chisos portfolio companies.
The way that we've structured our fundraise allows anybody to invest in our company.
That said, crowdfunding is still relatively new and unconventional, particularly in our space. We’d be remiss if we didn’t acknowledge other leaders who helped to clear a path.
Arlan Hamilton, Founder of Backstage Capital, pointed a way forward. Seeing her team’s success with crowdfunding made it clear that many believe in increasing access to entrepreneurship to all, not just the privileged few. Tyler Tringas, Earnest Capital founder, and his team validated the idea that everyday people care about disrupting traditional VC.
While we find strength in seeing their success, we’re doing things a little differently. Our investment approach - the CISA - is unique. (You can learn all about it here.) We’re also building a FinTech platform that other entities can use to match entrepreneurs with capital.
If you invest in Chisos, you’ll fuel our platform development, strengthen our community, and support this mission. (We've raised over $250K so far, and there's still a little time for you to get early bird terms.)