If we think back over the past decade, software has done a great job of making inefficient markets more accessible and efficient. eBay made it easier for buyers and sellers to find and exchange products. One of our portfolio companies, TaskRabbit, is creating a marketplace for labor that efficiently connects those who need tasks completed with those that can perform the work. Kickstarter is enabling, and making it easier for, the world's most creative people to turn their dreams into reality.
But, software and the web have yet to make connecting private companies with seed-stage capital more efficient. There are some burgeoning platforms, like AngelList and Gust, that are moving in this direction; but the transactions still happen offline, and usually require large blocks of capital. If someone is looking to invest $1,000 in a private company, it's still virtually impossible.
And as someone who spends over 30 hours a month on planes/trains, I know how hard it is for someone who doesn’t live in Silicon Valley full-time to stay connected and get access to the strongest startups.
For these reasons, I’m really excited to announce First Round Capital’s investment in FundersClub. FundersClub makes it easy for companies to raise capital from individuals without hassle. Companies have just one shareholder (the FundersClub fund) – and don’t have to deal with the hassles of chasing down individual shareholders for signatures/approvals down the road. And for investors, it eliminates many of the monetary limitations - it allows investors to invest as little as $1,000 - as well as the geographic limitations of a normal seed stage round. (You still need to be an accredited investor, though).
FundersClub just launched last week with several companies from the current batch of Y Combinator companies – and if history is any benchmark, the startups listed on the platform will be heavily oversubscribed shortly after YC Demo Day on August 21st. What FundersClub provides for everyone, is insider access. If you aren't one of the 300 people to get an invitation to YC demo day, this is your chance to invest in these great companies. The initial available companies include FundersClub itself, Virool, Sponsorfied, TracksBy, and Coinbase.
Please join me in welcoming Alexander Mittal, an accomplished founder named one of BusinessWeek’s Best Young Entrepreneurs, and Boris Silver, founder of Sport Interactiva, and their Company, FundersClub, to the First Round Capital Portfolio and Community.