It's very difficult for any startup to get funded. In most cases, startups don't even get to raise funding from Venture Capitalists (VC's) and Angel Investors. This is why Breezeshare decided to launch our rewards-based crowdfunding campaign through FundBlackFounders this January.
Crowdfunding provides a way for friends, family, and supporters of a business to make financial contributions to a company in exchange for a reward or equity. This is a great way for early stage companies to raise money to develop their product and get closer to a Seed or Series A fundraising round.
Rewards-based crowdfunding campaigns have different packages that a contributor can choose from. For example, a campaign may have a $25 package that includes a company T-Shirt, and a $100 package that includes even more merchandise. Some campaigns even have benefits like exclusive tours of their HQ, free use of the company's service, and invitations to prestigious galas. Popular platforms like Kickstarter and IndieGoGo are both Rewards-based platforms.
Equity Based campaigns allow everyday people to invest in startups. Normally, investing in startups is reserved to those who are wealthy. To be considered an accredited investor, and individual must have a net worth of $1,000,000, or have an income of over $200,000 for the last 2 years, or a joint income of over $300,000 for the last 2 years. Most people do not meet these qualifications, as the average household income in the United States is $87,864 (census.gov).
In exchange for a contribution, these campaigns offer equity (a shareholder's stake) in a company through the use of a SAFE (Simple Agreement for Future Equity) Agreement. In a SAFE Agreement, an investor's (you) contribution to the campaign will convert to future equity (or shares) in the company once they raise a priced fundraising round, get acquired by a larger company, or have a liquidation event. For example, if you invest $100 into a startup, and that company has an IPO 2 years later at $10 a share, you will now own 10 shares of that company with the option to purchase additional shares at a specified discount (usually 10%-20%).
Breezeshare's fundraising goal for this rewards-based campaign is $25,000. We will use these funds towards software development, marketing, and company operations. Exclusive merchandise, perks, and rewards will be available for those who contribute to our campaign. More details about the actual rewards will be released closer to our campaign.
Breezeshare needs the help of our friends, family, and supporters to reach our fundraising goal. It doesn't stop once you contribute to our campaign, Breezeshare is a community of individuals that want to see each other succeed. We will continue to go through this journey together and we hope to make a lasting mark within the tech industry.
Subscribe to FundBlackFounders.com to be the first to know about the first cohort of companies launching campaigns this January.