Chance Barnett
Chance Barnett, CEO of Crowdfunder, on the Genius of Equity Crowdfunding
On this episode of Unconventional Genius, I sit down with Chance Barnett, CEO, and Co-founder of Crowdfunder, to talk about the genius behind equity crowdfunding. Entrepreneurs know that there are ups and downs in trying to start a business. Chance created a new approach to assist entrepreneurs with the specific challenge of fundraising. Along the way, he has learned a lot.
Being a serial entrepreneur himself, Chance Barnett saw first hand the difficulties of securing funding. He decided that he could leverage the reach and convenience of the internet to create a new way of equity crowdfunding. This led to the start of angel and venture investing online company called Crowdfunder. Listen to our conversation to hear and gain wisdom from this incredible leader.
How equity crowdfunding sets Crowdfunder apart
There are several distinct differences between Crowdfunder and other online fundraising companies like Kickstarter or Indiegogo. While companies like Kickstarter allow for investor perks, if the company sells for a profit, those investors do not reap any long-term benefit. Investors in Crowdfund not only want to help launch a product or company, but they also want to gain a return on their investment.
The clientele is different as well. Early-stage companies looking to launch a first product might find success on a platform like Indiegogo. However, companies that go to Crowdfunder already have products in the market and are post-revenue. Crowdfunder is an equity crowdfunding platform that typically invests in seed rounds during which companies are giving up equity or board seats in return for capital.
Keys to successful fundraising for your company
The genius behind Crowdfunder is that it can connect entrepreneurs to high-net-worth investors much faster than traditional networking methods. However, in order for a leader to have success in fundraising, there are certain factors that must be present. Chance says that there are two main keys that increase the likelihood for an entrepreneur to receive funding.
First, great fundraisers understand how to communicate the facts of the business. Investors want to know if and how long it will take for them to see a return on their investment. Chance calls this appealing to the rational side. Secondly, entrepreneurs have to be able to appeal to the emotional side of investors. They must be able to communicate their mission and vision in a way that compels investors to want to be a part of something meaningful.
Important lessons from leading an equity crowdfunding company
After trying to raise funds for his own businesses as well as assisting others to fundraisers, Chance Barrett has learned a lot. He shared with me several lessons that have come from his experience. One important lesson is that venture capitalists often have different agendas than the entrepreneur.
Chance says, “You have to be very thoughtful about the investors that you bring on board. Investors aren’t always aligned with the long-term best interest of the company.” Investors can also help drive and push you to the next level. The bottom line is, value what you have enough to be selective.
A different way to think about failure
Chance Barnett didn’t start with a successful equity crowdfunding company from day one. He had several failed businesses and ventures. Rather than hide those failures, Chance enjoys talking about them. “Not everything hits and wins. I think it is important when we talk about investing and entrepreneurship that we talk about some of the failures as well.”
He goes one to share a few of the ways failures shaped how he approaches business. Chance encourages entrepreneurs to slow down. Find successful people who will give you advice and then be willing to pivot and change your idea based on their feedback. Here more of his advice on this episode of Unconventional Genius.
If you are with a consumer technology company planning to launch a new product at CES or are even looking ahead to CES 2019, the Max Borges Agency can help you succeed. To learn more, check out: www.maxborgesagency.com.
Topics Featured In This Episode
[2:29] Introduction of Chance Barnett, Co-founder and CEO of Crowdfunder
[3:00] Because of his vast investment experience, Chance started an equity crowdfunding company
[4:34] The difference between Crowdfunder and other online funding options
[8:30] Examples of companies that have experienced success through Crowdfunder
[11:16] Chance Barrett’s advice for how entrepreneurs should raise capital
[14:15] Surprising lessons learned from the last few years of leading an equity crowdfunding platform
[18:00] How Chance’s background led him to become an entrepreneur
[20:46] Lessons from failures that have brought about long-term benefits
[25:58] Advice that Chance would give to his former self if he could go back in time
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