A little background into what we’re building and why we’re doing it!
Glad you asked!
Launchparty is an investment platform where college startups founders can seamlessly crowdfund investments of any size from their friends, family, and university networks.
On Launchparty, anyone (!!!) can invest as little as $50 into startups, connect with the next generation of startup founders and investors, and learn the ins-and-outs of the world of startups, angel investing, and venture capital.
Startup founders can apply to raise up to $5 million on Launchparty. After a thorough vetting process, we’ll help founders spread the word about their fundraise and turn their biggest supporters into their earliest investors.
During our times as undergrads at UC Berkeley, two friends of ours had launched a startup but were struggling to raise their first pre-seed round from an established fund. They had solid traction, increasing revenue, and a loyal following on campus. But they still struggled to snag checks.
So we asked them if we could invest in them!
Don’t get me wrong - we were (and definitely aren’t) wealthy enough to be their angels - but we thought “Hell, even $50 would help, right?” We wanted to help our friends and invest in them, but we found no easy way to do so.
So, we started thinking...what if we could create a way for all of our friends, everyone in their school following, anyone from their friends and family to invest in their company?
This planted the seed for the idea of Launchparty.
We spent the next few months talking to as many startup founders from our school as possible, and many shared the same issues. What we found were brilliant young founders who were unsure when and how to go about the fundraising process. Without the right family background or industry connections, raising the first real round was incredibly difficult.
Many campus startup founders show immense promise yet face institutional biases from existing venture capitalists and lack the proper industry connections to combat this increased level of competition for pre-seed funding. Venture capitalists and angels desire large potential exits, and as such, have left many great companies on the table.
We know that we’re nowhere near the first to come up with this idea. Other platforms out there, known as equity crowdfunding platforms, did exactly this.
However, none of the platforms are optimized for the kind of startups blooming in campus communities.
Today, equity crowdfunding is simply an extension of this outdated, elitist mindset present in the startup world that has made it so difficult for many young founders to take their ideas to the next level. The space is far too exclusive and competitive for many college campus founders to take advantage of, and current equity crowdfunding platforms are just as selective as VCs, mostly selecting startups that are already venture-backed.
There is a clear funding need by campus founders that has barely been tapped into. Thousands of young founders with fresh perspectives residing outside Silicon Valley face significant barriers when breaking into the space.
This comes at a time when Gen Z is joining the retail investment space en masse, thanks to apps like Robinhood and Coinbase. These young investors are not only looking to diversify, but to make an impact by investing in teams and ideas they love and can interact with.
Therefore, we’re building Launchparty to truly democratize access to the startup space and angel investing for the next generation of entrepreneurs.
Equity crowdfunding is the process of raising money from public investors through the sale of securities; in exchange for a small amount of cash, investors receive equity ownership in the business venture.
For example:
Yes! It’s very much legal. Here’s how:
The Jumpstart our Business Startups (JOBS) Act of 2012 was signed into law by President Barack Obama, with Title III of the bill termed the CROWDFUND Act.
Essentially, the JOBS Act lightened financial regulations to ease the fundraising process for early- to mid-stage U.S. companies, with Title III allowing up to 500 non-accredited investors (fancy term for average folk) to acquire company stock in a given fundraising round.
Regulation CF (or Reg CF) is a section of U.S. federal law that regulates the crowdfunding industry and allowed for private companies to raise up to $5 million through crowdfunding offerings in a 12-month period.
Launchparty will host its initial campaigns under Regulation CF standards.
We work closely with FINRA and the SEC to provide you a safe and accessible investment experience. Regulation set forth by both entities monitor and regulate all of Launchparty’s operations.
For more information, we recommend that you review applicable rules and regulations provided by SEC.gov and finra.org, as well as any state agency websites that makes reference to these regulations and restrictions.