Advice for raising "Friends & Fam" (~25k) without plans to raise VChttps://mygravitatas.com/

nelliestokeld·Dec 02, 2022

Posted in:Solo Founders Advice Bootstrapping Fundraising Founders

Hey all! Any fellow founders or startup folks know how to approach raising a “friends & family” without plans to raise VC in the future? My startup, Gravitatas, needs a chunk of change (about 25k) to get our product into preproduction and prep for our launch Kickstarter campaign.

For context, I’ve bootstrapped a prototype but need a little push beyond my salary. My friends and fam aren’t moguls or familiar with fundraising beyond a Kiva loan I’ve done in the past (previous biz). Ready to send out my deck but at a standstill about how to best approach asking for investments anticipated in the $500-$5000 range.

I’m considering Wefunder, simple equity share ($1k = .001%, minimum of ~5k), SAFE note in the event I raise more money or…

Any thoughts/ideas/red flags are welcome! Thank you!

Iynna·Dec 03, 2022

Have you considered small SPVs from angels? Or if not equity crowdfunding platforms like Republic? Seems like you’d be a great candidate!

nelliestokeld·Dec 06, 2022

Thanks iynna! I hadn't considered SPVs but looking into it now!

Iynna·Dec 17, 2022

Of course :)

Seisei·Dec 03, 2022

My co-founder and I are in a similar boat. Trying to decide between raising debt or equity. You could structure it as an angel SPV as someone mentioned below but with the knowledge that it will never convert.We've been trying to figure out if there's a way to structure ours as revenue-based financing. Neither debt nor equity, really.I'm also a Venture Partner at Republic if you want to DM me but it sounds like you're in an earlier stage than we typically target.

nelliestokeld·Dec 06, 2022

Thanks, @Seisei good luck to you as well! I'll DM you. curious to learn what you're building and what you'll wind up doing.

Filomena21·Dec 03, 2022

I used to always hate it when people would say this to me, but can you network with people in the bra industry? Most founders want to raise at least $500k, but if you truly only need $25k, that’s not very much money for an executive — you could probably get it all in one check. Try sneaking into industry conferences and pitching to people you meet at the bar.Otherwise, can you crowdfund in a way that you are pre-selling to your customers? It looks like you are making a bra for women with big boobs. Can you get some of these women to pre-purchase the bra, where they get both an equity stake and a bra if they invest? This could also make you more attractive to sophisticated investors because you are validating demand. Plus if you can’t get anyone to buy in advance, you might want to hold off until you figure out your marketing.I think Dame did this when they were making vibrators for couples.

nelliestokeld·Dec 06, 2022

Thank you for this. I hadn't thought about a one-check solution! And the presale option is a good alternative as I start drumming up interest from future consumers.thanks for your response!

DianePrince·Dec 05, 2022

A few questions/thoughts: Do you really need your product in preproduction before your Kickstarter campaign? Why are you considering two separate crowdfunding campaigns - Wefunder as a separate campaign from Kickstarter?Have you seen that StartEngine and Indiegogo have teamed up to help startups raise capital from ideation?

nelliestokeld·Dec 06, 2022

Yes, I don't want to get into a crowdfund fatigue situation. Thanks for the probing questions!

DianePrince·Dec 09, 2022

Absolutely! And I'm in your target market! I just signed up for your email list. Can't wait to learn more about Gravitatas!

lindsaymorgan·Dec 07, 2022

Hi Nellie! A couple notes: 1) are you sure you only need $25k? If you raised more, would you it make your life and crowdfunding go easier? 2) In my opinion, the amount of legal effort/cost needed to do equity for just $25k is not worth it. As @Seisei mentioned looking for another option besides Debt or Equity, and there are several options. One of the best is probably a Shared Earnings Agreement. I'm a scout for Calm Company Fund and they have a great writeup on why they chose that structure even as a VC firm, and it even includes a sample document: https://calmfund.com/shared-earnings-agreement. They're focused on B2B SaaS companies, BUT a shared earnings concept can work in any business AND it gives you much more flexibility over the terms and long-term strategy of company.