Late last year, we wrote about ProFounder, a startup that offers entrepreneurs ways to raise money for their startups and ideas. At launch, ProFounder allowed entrepreneurs to share a percentage of their revenues with investors (their friends, family, and community) over time in exchange for an investment. Today, ProFounder is launching another option for fundraising-an equity term sheet.
Entrepreneurs can apply to Profounder, upload a pitch to offer to potential investors and then create a term sheet with Profounder’s templated forms and compliance sheets. ProFounder then gives businesses a page where they can invite friends, family, and investors to a destination page that allows users to make contributions and investments directly on the site. The bonus of using ProFounder is that the platform allows unaccredited investors (i.e. friends and family as opposed to a venture firm) to participate, so anyone can be an investor.
And entrepreneurs can set their own investment terms and ProFounder facilitates all of the compliance, including tracking the number of investor seats in each state where each of their investors live, making sure entrepreneurs know which compliance documents they need to file, making sure entrepreneurs know which filing fees to pay, etc.
Entrepreneurs can customize their equity terms on ProFounder using tools such as pre- money valuation calculators, dynamically-updating graphs to show stock ownership percentages, and more. ProFounder’s equity term sheets currently offer non-voting common shares to investors.
ProFounder, which was is the brainchild of Kiva co-founder Jessica Jackley and fellow Stanford Business School alum Dana Mauriello, has seen steady traction since its public launch last fall. The platform has coordinated 14 successful raises with over $350,000 raised. The total average individual raise is $26,000 and the average number of investors is 20. Currently 530 startups are in the process of raising funds using ProFounder.