Unglossy: Decoding Brand in Culture

Jonny Price: Democratizing Capitalism, WeFunder, and the Future of Investing

• Tom Frank, Mickey Factz, Jeffrey Sledge, Jonny Price • Season 4 • Episode 19

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Unlock the secrets of equity crowdfunding (yikes! that's another 25 cents for the swear jar), scratch that, "community round" with our insightful guest, Jonny Price – VP of Fundraising at WeFunder. Learn how the 2012 JOBS Act has transformed the way everyday Americans can engage in pre-IPO investments, making it accessible beyond the traditional wealthy elite. Embark on a captivating journey as we explore Jonny's personal story of transitioning from a consulting career in London to impacting lives through Kiva's crowdfunded microloans in the United States.  

Imagine a world where investment opportunities are not confined to an exclusive circle but are open to everyone. Jonny demystifies the legal and strategic complexities of raising capital and shares how WeFunder empowers anyone to make meaningful contributions to the startup ecosystem, leveling the playing field for all investors.

We delve into the successes of guys like Troy Carter and Nas in angel investing and explore how platforms like Wefunder are reshaping capitalism. Emphasizing the importance of community funding, the guys discuss how democratizing investment can reduce wealth concentration and empower diverse communities. 

Tune in to a thought-provoking conversation about the future of investment, the power of diverse voices, and the innovative spirit driving a financial revolution.

"Unglossy: Decoding Brand in Culture," is produced and distributed by Merrick Creative and hosted by Merrick Chief Creative Officer, Tom Frank, hip hop artist and founder of Pendulum Ink, Mickey Factz, and music industry veteran, Jeffrey Sledge. Tune in to hear this thought-provoking discussion on Apple Podcasts, Spotify, YouTube, or wherever you catch your podcasts. Follow us on Instagram @UnglossyPod to join the conversation and support the show at https://unglossypod.buzzsprout.com/.

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Tom Frank:

This week on Unglassy.

Jonny Price:

And it was an acronym, of course. So it was the Jumpstart Our Business Startups. Oh, okay, Jobs Act. So 2012 Jobs Act, and part of the Jobs Act was to allow for what you might say. If you want to put another 25 cents in the swagger was this investment crowdfunding concept. And so now, for the first time in 80 years, everyone in America, middle-class Americans, 100% of the population can invest in pre-IPO private companies From the top.

Tom Frank:

Yeah, I'm Tom Frank.

Mickey Factz:

I'm Mickey Fax.

Jeffrey Sledge:

And I'm Jeffrey Sledge.

Tom Frank:

Welcome to Unglossy, to coning brand and culture. I'm Tom Frank, partner and chief creative officer at Merit Creative. This is Mickey Fax, hip hop artist and founder and CEO of Pendulum Inc. And that is Jeffrey Sledge, a seasoned music industry veteran who has worked with some of the biggest artists in the business. We're here to explore the moments of vulnerability, pivotal decisions and creative sparks that fuel the relationship between brand and culture. Get ready for a thought-provoking journey into the heart and soul of branding the unscripted, unfiltered and truly unglossy truth. I think so. I think right now is the best time to do it. This is the time to do it right now.

Jeffrey Sledge:

Let's do it. Let's do it right now, Can I before?

Mickey Factz:

we tell you what.

Tom Frank:

I did what I had for dinner tonight. What?

Mickey Factz:

did you have for?

Tom Frank:

dinner I got to show you guys a picture.

Jeffrey Sledge:

This is brandon culture related. Yeah, this is what you did.

Tom Frank:

This is what I had this was sitting on my um. Can you see this?

Jeffrey Sledge:

oh, the kelsey's. Yeah, who's that travis? What is that the cereal?

Tom Frank:

it's cereal, okay, but it has cereal that growing up it has reese's, reese, reese's puffs, cinnamon toast, crunch and lucky charms all mixed all mixed together in one box.

Jeffrey Sledge:

Okay, whoa, whoa whoa whoa. I thought the same thing. I saw it sitting on my counter.

Tom Frank:

I tried it, it was fantastic.

Mickey Factz:

It tastes good, but that's mad sugar. Too much sugar, man. Come on man.

Tom Frank:

I'll go for a run. I just had to try it, though that was my dinner tonight.

Jeffrey Sledge:

I'm sure it's good. I'm sure it's good and it's going to sell because they're hot.

Tom Frank:

Shout out to the Kelsey brothers. They're hot, but are they getting to be too much?

Jeffrey Sledge:

Potentially Well. Travis has been playing great so far this season. As they say, the rumor is he came in camp kind of out of shape because he was running with Taylor all season running around.

Tom Frank:

And eating his cereal, and eating his cereal.

Jeffrey Sledge:

So he got to pull it together. But you know, yeah, it's getting, they're getting to that point. But if Travis wins another ring, you know, then they get extended time. But you know, you've got to figure it out.

Tom Frank:

All right, I've gotten this off subject already, but we had a good conversation today With who we talked to Johnny Price. Oh yeah, that's right, you forgot who we talked to.

Mickey Factz:

No, I know you did London Zone. I want to just say his name Pause. Hey yo, that's crazy.

Tom Frank:

I think it was fun, right. We always talk about great ideas. We're always talking about great people doing great things, but what we haven't talked about yet is the money, the finance. How do people do these kind of things? And how are you as an owner, as a founder, as someone with an idea, how do you ever cross that barrier? Because it's hard to get the money.

Mickey Factz:

It really is difficult to raise money, and I think what Johnny was able to convey today was the ins and outs, the legalities, what to say, what not to say, how to approach it, his company, how they approach it, and, you know, the surrounding areas in that space and how to get capital from all over the place. I think it's just an ingenious idea and I can't wait for the people to listen to this episode.

Jeffrey Sledge:

Yeah, I also think.

Mickey Factz:

John, they really explain.

Jeffrey Sledge:

You know most people think if I'm going to invest in a business, I need, like mad bread. I need, like you know, 10, 15, 20, 75, $100,000 to be a real investor. Air quotes and you know what Johnny's doing is showing. You know you can put a hundred dollars in, or you know, $200 in or whatever, and still become an investor and possibly get hopefully get a return on your investment, but you get to be an investor. It's the same as if somebody put $10,000 in. You don't have to have this big lump of cash just sitting there to invest in companies, and I'm glad he talked about that.

Tom Frank:

The other interesting thing is I've been in an opportunity to really look at a lot of these platforms because this is all new right, all this I think he said 2012 was when the law changed that you can do this. And there's a lot of companies trying to do this, and the one thing I have found over and over with WeFunder and I think Johnny just stamped it for me was that WeFunder really goes out of their way to explain it very thoroughly and they're really looking towards the founder, they're helping founders.

Tom Frank:

Like there is no other mission here. They are really trying to change, as he said, capitalism, and it sounded all great, but in doing my research, this is the company that's doing that really well and I was just thoroughly impressed by this guy.

Mickey Factz:

Yeah, me too. This is really good man, really really good stuff. Yeah, it was a great, it was dope.

Jeffrey Sledge:

It was a great interview.

Tom Frank:

All right With that, let's dive into our interview with Johnny Price from WeFunder. Jp Smicky Unglossy is brought to you by Merrick Creative, looking to skyrocket your business's visibility and drive growth. At Merrick Creative, we solve your brand and marketing woes With. We solve your brand and marketing woes With big ideas, decades of experience and innovative solutions. We'll draw in your target audience and keep them hooked. Remember, creativity is key to success. Partner with Merit Creative and unlock your brand's potential. Learn more at meritcreativecom.

Tom Frank:

And now back to the show. Let me just tell you something. Our show, as you guys know, focuses primarily on brand and culture. We go all over the place a little bit and so far this show we've honed in on cultural drivers such as food, music, sports, architecture, technology. We're going to talk about one of the drivers that's behind it all and something that I think we've all kind of tapped around a little bit. But is money right? There's money that needs to be behind all this stuff. There's finance behind all this. So I'm really excited to introduce you to a guy who I think knows a little bit about this and, specifically, knows a little bit about kind of a new wave I don't know if it's new, but it's new to me and a new emerging kind of trend of what I'm going to call equity crowdfunding. But we're going to let this guy maybe tell us a whole lot more. So let's say hello to Johnny Price, the man in charge of, I think, all fundraising at WeFunder. How are you doing.

Jonny Price:

That's right. Hello, to you too. Unfortunately, it's 25 cents in the swear. Jar out the gate because equity crowdfunding oh, I'm not allowed to say that word, you're not allowed to say that community. Community round is okay. You know new, officially uh approved, uh rebranded term. So equity crowdfunding is out the window. Community round, here we come. You run an angel round to let angels invest. You run a bc round friends and family around community round, let your community invest. So let's talk community rounds.

Tom Frank:

All right. So every time I say the wrong word 25 cents, 25 cents, all right yeah.

Jonny Price:

It's not that expensive.

Tom Frank:

Not that expensive. You can probably afford it. But yeah, mickey can afford it. I don't know if I can afford it, but wait a minute before we dive into all that you need to tell us about Johnny Price. I want to know about you. Where do we have the pleasure of?

Jonny Price:

speaking to you from today. Yes, I'm in San Francisco right now at WeFunders office. Who I work for? The VP of fundraising, as you say, linkedin says VP of banter, but my formal title will be VP of fundraising. And so, yeah, wefunders is based in San Francisco. I used to live here for 10 years. Now I live in Nashville, tennessee, with my wife and three kids, my wife's from Nashville. I love Nashville, but, as you can tell from my accents, I am not originally from this side of the pond. I'm from London originally. I started my career in consulting, did that for a few years, then came to volunteer for a nonprofit in San Francisco called Kivaorg, which is also in the crowdfunding space. Then started the US team at Kiva back in 2011, ran that for seven years and then, in 2018, joined WeFunder and have been here for the last six and a half years or so.

Jeffrey Sledge:

Wait, wait, wait. Before we move forward, let's talk a little London. I've only been there twice, but I love it. First of all, if you are a real Londoner, you're gonna tell me right now you got tickets to the Oasis reunion oh, that's a good one.

Jonny Price:

I don't well. Oasis, I know from London, right, they're from Manchester.

Jeffrey Sledge:

I know they're from Manchester, but that's maybe I gotta pass um.

Jonny Price:

But no, I thought you were gonna say do I support a London-based uh soccer team?

Tom Frank:

I thought he was going there too actually.

Jeffrey Sledge:

I'm talking away, no, no, I'm talking the lads, man, the lads.

Jonny Price:

The lads mate? Yeah, the lads mate, if you want. Yeah, I'll talk like a Londoner for the rest of this interview.

Mickey Factz:

But no, I'm a.

Jonny Price:

Manchester United fan. So there's a saying in England that, like you know, all the man U fans are from London. So in England that, like you know, all the man U fans are from London, so that's a sign that I'm a true Londoner, that I'm a Manchester United fan.

Jeffrey Sledge:

But no, I do not have a Ways to Stick it. When did you move over to the States? What year?

Jonny Price:

In 2009,. I came to volunteer for this non-profit Kiva, and while I was there I met my wife, and so then I went back to London and we were dating long distance for six months or so, and then I got my consulting company to transfer me from the London office to the San Francisco office. So that was one event. And then 2011, I moved to Kivaorg permanently and then, yeah, my wife and I got married in 2010 as well, in Nashville. So we have been here in the States for 14 years now. Do you watch Industry? I don't actually. It keeps coming up on HBO.

Jonny Price:

Johnny, you're killing me right now, man, Right now I'm watching the West Wing again for like a millionth time Got to watch Industry.

Jeffrey Sledge:

Johnny, you got to man. It's based in London. It's like you know about London finance and a lot of other things, but you got to get into it. You'll enjoy it. It's a dope show Industry.

Tom Frank:

I've never heard of it. It's on.

Jeffrey Sledge:

HBO, oh, hbo.

Jonny Price:

I've seen it come up in my feed.

Mickey Factz:

Isn't it Max?

Jonny Price:

now Max HBO is the equity crowdfunding, as Max is the community. Rants there you go.

Tom Frank:

Ah, there you go, got a swear jar.

Mickey Factz:

Wait, wait, yeah, put 25 cents in a swear jar 25 cents in the HBO.

Jonny Price:

You said it Clink, clink.

Tom Frank:

So your route to this whole, what am I calling it now? Community?

Jonny Price:

Yeah, but you also have to call it root, because I'm from England.

Tom Frank:

Root your root, but you also have to call it Root, because I'm from England. Root your Root, your Root, to community, that's through Kiva, then right. I mean because Kiva? I guess I never thought about that. Is Kiva the beginning of all of this?

Jonny Price:

It may be. Yeah, so Kivaorg and there's different Kivas. So if you're into kind of fun chocolates, then there's a Kiva in that area, and there's a kiva in that area and there's robots that amazon uses. But yeah, kivaorg is a non-profit. Yeah, they'd like crowdfunded microloans, uh, for entrepreneurs around the world. So kiva was founded in 2005, which was the same year that muhammad yunus won the nobel peace prize for the work that he did with microfinance in Bangladesh, which was making these really tiny loans to rural women and kind of having them form a group which ensured like very high repayment rates on the loan. So microfinance was like really popular in 2005. And then kind of the internet was coming along, and so Kiva was a way for you to lend $25 to a farmer in Uganda, and maybe eight Americans would each lend $25. Then Kiva sends that $200 to the farmer in Uganda and then, as she repays the loan, you get $25 back in your Kiva account and you can lend it on to help someone else.

Jonny Price:

And so it was like one of Oprah's's favorite things, I think in like 2007 or something and kind of really exploded onto the scene.

Tom Frank:

It did blow up there for a while. What happened to kiva? Is kiva still around?

Jonny Price:

yeah I'm still here I think still fifth and howard in san francisco, um, and still still growing probably 100, 200 people or so. Um, great organization, great non-profit. It was a great, great place to work for for seven years or so and, yeah, when I was there, I basically started the US lending team.

Jonny Price:

So Kiva was known for supporting entrepreneurs in Africa or Southeast Asia or Latin America, and I started the team where we were lending to a barbershop in inner city Detroit or a small family farm in rural Arkansas, and so the average line size was super small, like $5,000. But it might come from like 200 people lending 25 bucks each. So, yeah, it was kind of crowdfunded lending and it was 0% interest, no fees for the small business owner. The lenders weren't getting a rate of return, they were just doing it out of the goodness of their heart to support a local entrepreneur. A lot of the lenders were maybe customers of that entrepreneur or family members, friends and family members, and so, yeah, it was a really fun ride for seven years up until then, kind of jumping to WeFunder in 2018.

Jeffrey Sledge:

So, as time is moving on, I know you got the the other thing won't be named and you get, you, got your, your like this is kind of going to be the new way. It's not new anymore, but this is now the way for a lot of businesses and small businesses and stuff to get their money. Now it won't be through banks and stuff anymore, it'll be this thing. Is that the goal? To kind of eliminate bank loans and add on?

Jonny Price:

Yeah, I would say the latter. I think it's a little ambitious so we'll totally eliminate it. Um, for me, that one way of thinking about it is like you know, we funder is to institutional investment capital, whether that be vcs for tech startups or banks for small businesses and main mainstream. You know we funder is to institutional capital, as like twitter is to you know, the mainstream media, or like airbnb as to hotels, right, it's kind of a democratized approach to angel investing in in startups and early stage capital raising for startups, just as you know those platforms are in in those industry sectors. Or like robin hood for kind of public investing, right?

Jeffrey Sledge:

yeah yeah, yeah, interesting. I gotta ask another question. My mind is racing now. So what is? What are a couple of some of the biggest um things you guys have done, like what companies have really turned into, like you know, major major companies and whatever they're doing through your investors?

Jonny Price:

yeah. So a couple of the maybe bigger raises we've done, um. So there's this company called mercury bank. I give them a lot of credit because I feel like they were one of the first maybe the first like, really like exciting venture-backed startups that, like the best vcs in silicon valley in the world, were kind of lining up to invest in and as part of their Series B in 2021, there is 120 million Series B. Codetwo was the VC firm that led it. Andreessen Horowitz invested in it and they said, okay, we've raised the Series B. Now wouldn't it be cool if we could open up a $5 million allocation? That's the maximum that the law allows you to raise through regulation crowdfunding every year. $5 million allocation that's the maximum that the law allows you to raise through regulation crowdfunding every year $5 million. So let's open up a $5 million allocation to let our customers invest in us on the same terms as Andreessen Horowitz in our Series B. And so they launched that on WeFunder in 2021. They raised $5 million in 24 hours. They were massively oversubscribed. Wow. From memory, they had like two and a half thousand uh, people do it, um, and so that's. That's a kind of awesome like success story.

Jonny Price:

Repla is another, andreessen horowitz, by a company that did the same thing, levels beehive. It is a newsletter platform. If you guys know beehive they. They closed the 32 million series b loved by nea earlier this year and then opened up a million dollar allocation to let their kind of users invest. And then you know that's all kind of tech startups, like venture-backed tech startups. Then you have companies like the oakland roots and soul soccer teams who are who raised with us a year ago. They're raising again now, but basically a soccer team that's letting the people of Oakland, the fans of the club, become owners and investors in the team. There's a restaurant near me in Nashville called Bad Idea. They raise $750,000 from residents of the community.

Tom Frank:

I love that name.

Jonny Price:

Isn't that the best name for a restaurant?

Tom Frank:

It is.

Jonny Price:

It's kind of a wine bar, so even better, um, but yeah, um and so, yeah, they raised 750k from a couple of hundred. You know local residents and you know what, like, those residents are gonna go there more often support the bar exactly because they're an investor in the business and they they were just featured in the new york times like 50 best restaurants list this year, which is pretty cool.

Tom Frank:

Wow, but let's back up for a second because I think we need to educate.

Tom Frank:

Yeah, we need to educate people on what we're talking about here very specifically, though, because you are with a platform and maybe even just talk a little bit more about the overall concept. This is, as Jeffrey said, like you know, traditionally you go to a bank, you get a loan. Traditionally, you go to a VC capital, whatever and you get, you raise money. This is a completely different way to do this. Give us a little bit of the history I'm now I'm afraid to say the word, but give us a little bit of the of the history on, like, how is this even legal and how did it start and what is it?

Jonny Price:

very specifically, yeah, that's a great question. So for 80 years in America it was basically illegal for what's called unaccredited investors to invest in private companies. So once a company went public in an ipo initial public offering, you go public on the stock exchange. Now everyone can invest in you, right, but until that point, and obviously very, very small number of companies end up going public. Right until that point they're private. And for 80 years, in order to invest in private companies, you had to be an accredited investor. Accredited investor is basically a millionaire like you have a million dollars of wealth excluding your house or 200k income or 300k household income, so basically the richest, like five, ten percent or so of the population. So only rich people for 80 years in America could invest in private companies.

Jonny Price:

Now there is a ton of wealth that is being created by private companies growing and eventually exiting and IPOing, and so a big part of why I think the law was changed in 2012 and why our founders started WeFunder in the same year of 2012. And one of the first things they did was get the law passed. But a big part of the driving force for them kind of starting the company and getting this legislation passed was it is not fair and extremely un-American that you have to be rich to invest in, like interesting early-stage private investment opportunities. And so in 2012, there was a law passed called the jobs act, which talks about a bunch of different things, and you know politicians right in dc, so you got to name it like something like the jobs act and you stuff a lot of stuff in there.

Tom Frank:

I'm sure the only part.

Jonny Price:

And it was an acronym, of course. So it was the Jumpstart Our Business Startups. Oh, okay, jobs Act. So 2012 Jobs Act, and part of the Jobs Act was to allow for what you might say. If you want to put another 25 cents in the swagger was this investment crowdfunding concept. And so now, for the first time in 80 years, everyone in America, middle class Americans, in 80 years, everyone in America, middle-class Americans, 100% of the population can invest in pre-IPO private companies through registered platforms, of which WeFunder is the largest one.

Tom Frank:

So can I ask a question before you continue? What was the rationale previously of not allowing this Great question?

Jonny Price:

And this keeps me up at night today. This is a really important question. The reason the SEC decided to say you have to be accredited to invest in early stage private companies is because those investments are A super risky. If you invest in a public company, it's probably not going to disappear next week, but private companies are much, much riskier. And then also those investments are super illiquid. Right, if I invest in a company on the stock market, I can sell that share next week through my Robinhood account, but if I invest in a private company on WeFunder, it might be five years or 10 years before I realize the return when they get acquired by a bigger company or IPO. So they're super risky investments. They're super illiquid investments, kind of long hold, not much ability to kind of buy and sell. And so the SEC said you know, we need to kind of protect retail investors who don't have much money saved up from being exposed to these risky kind of financial investment opportunities. Super valid point. And so part of the law, which was, as I say, went through Congress in 2012, but actually was only rolled out by the SEC in 2016. So this has only been live now since 2016.

Jonny Price:

But part of the law was to say investors, when you invest in these. It's called regulation crowdfunding is the legal name. If you invest in these regulation crowdfunding opportunities, you can only invest a certain percentage of your income and wealth every year. I think it's maybe 5%. There's a formula to calculate it, but let's say it's 5%. So if you make, you know, a hundred grand a year, you can only invest five thousand dollars per year in these um risky early stage private investment opportunities. So that was one of the ways in which the sec said okay, now we're going to allow retail investors to participate in these investment opportunities, but like, we're going to put some rules in place to try to protect them from losing all their life savings that's interesting so so it's kind of a noble.

Jonny Price:

It was kind of a noble thing to do to protect people from investing in some company, in the company of the work, and all of a sudden they're out of, like the bank is empty exactly, and I think, as with a lot of regulations right, there's like maybe a noble intent and there's definitely some good things that come from that and there can sometimes be some negative, maybe unintended or unforeseen, kind of negative. You know consequences that come from that as well and I'll kind of get up on a little bit of a soapbox for a second. We we thunder is what's called a public benefit corporation, which I don't know if you, you guys know about this. Really cool, like most companies are C corporations, they're legally obligated to maximize shareholder value and so if a decision to maximize shareholder value would go against, like the environment or, you know, their stakeholders, the community, they have to be legally obligated to maximize shareholder value. With a public benefit corporation, you're legally obligated to uphold your charter, which talks about the kind of greatest social impact of what you're legally obligated to uphold your charter which talks about the kind of greatest social impact of what you're trying to do. Really cool way for you to incorporate your company. That allows you to kind of think more holistically about the social impact of what you're building.

Jonny Price:

So we fund as a public benefit corporation and for me there's kind of two main parts of our public benefit progression mission. The first is let's get more capital flowing to startup founders. So the idea if you can unlock a lot of retail investors capital that's right now only being invested in public companies, if you can take a lot of that capital and invest it in early stage private startups, then maybe we can get more capital flowing to early stage businesses. At WeFunder, we like startups, we like startup founders. We think the economy and our world will be a better place if more people are able to launch and grow startup businesses. So a big part of our mission as a Pvc is get more capital flowing to startup founders by unlocking. This like retail investor capital and and another part of that as well, by the way, is like loving the playing field.

Jonny Price:

So if you look at like how much vc dollars right now are going to black founders or latino founders or female founders, or right now 77 percent of venture capital goes to three states californ, new York and Massachusetts so part of the idea on the founder side is like can we, if you democratize angel investing, can we get more capital flowing to female founders of color in Tennessee, where I live? So that's like the founder side. And then on the investor side it's basically why should only rich people get to benefit from the wealth created by the next uber or airbnb ipo? More companies are ipoing later and later. More of that wealth creation is happening in private. If ordinary middle-class americans can't participate in that wealth creation, like that's a problem. Um, and so that's kind of the investor side of WeFunder's mission. Okay, off my soapbox.

Jeffrey Sledge:

One quick question before we move forward. California and New York are obvious, but why is Massachusetts one of the top three?

Jonny Price:

Boston, Harvard, Harvard, I think.

Tom Frank:

I would say, healthcare is blowing up and health tech especially, ms in boston. Yeah, so why would? Why would someone invest on this? Like if I was in, if I was just a guy who wanted to invest a little bit of money, right, why? Why? It seems like it's a massive risk. Why wouldn't I go? The more traditional public company put money in the stock market. What's the what's the advantage to me to come through like a WeFunder? And, to your point, what am I going to do with those shares? Like how?

Tom Frank:

do I how do I, how do I make money off of this?

Jonny Price:

Yeah, great question. So I think there's kind of two, two reasons, right, and I I may reframe it a little bit it's like why does anyone do angel investing in startups? Because that's kind of what it's like An accredited investor could only invest in public companies. But a lot of people are making angel investments into early stage companies and hoping to get the next Uber seed round because, yes, it's, it's super risky, yes, it's a super long hold, but maybe there's like a 10 000 x return there, right. Yeah, that's a good point. Yeah, so, like I always say, if, if 5 000 uber drivers had invested a thousand dollars in u seed round, we literally would have made 5,000 Uber drivers millionaires at the IPO, which would be pretty cool. And if you look at, in the 1970s, like the top 1% of Americans had 10% of wealth and in 2020, the top 1% of Americans had 30% of wealth. This stat was from ChatGPT about 10 minutes ago, by the way, so you, might want to check it of wealth.

Mickey Factz:

This stat was from.

Jonny Price:

ChatGPT about 10 minutes ago, by the way, assuming Sam Altman is selling us the truth. Concentration of wealth top 1% it's gone from 10% to 30%. For me, at least, one driver of that is that only wealthy people have got to invest in a lot of these private companies that are creating a ton of wealth. A lot of the wealth that was created by microsoft was post ipo, so then retail investors can get in in on that. But if you look at, like you know, companies that are ipo recently, like uber, they're huge by the time they ipo. So there's kind of less like value creation growth upside for kind of retail investors to participate in if they can only invest post-IPO.

Tom Frank:

And is it because of these opportunities that people are becoming public companies much later in the process than ever before? And you're right that you kind of miss out unless you were able to get in super early.

Jonny Price:

So to answer, to go back to your question, so that's the first answer. Right, it's like, yes, it's risky, yes it's a liquid, but there is potential high upside. If you do back a flyer, that you know goes power law big right, which is obviously the hope of investing in other stage companies. I think there's another big reason, though, which is a lot of what we see on WeFunder, which is kind of supporting a company that you love or a product that you love, or even a cause that you believe in. So the people investing in chattanooga football club, which is another soccer team that raised with us, three and a half thousand chattanoogans invested 900k in chattanooga football club. Wow, like I don't. I imagine most of those guys like don't really expect to become millionaires from that investment. They just think it's cool to be like an owner of their soccer club. Yeah, I think that is kind of cool.

Jonny Price:

Yeah, like there's this company. I was actually chatting to the founder. Yesterday's company, leah labs, went through y combinator. They're trying to cure cancer in dogs. Um, got some really awesome results recently that they're making progress, really cool. And so you but the vcs were like the market's too small, there's too much science risk ahead of you, so sorry, like we're not gonna, we're not gonna invest, and they almost went out of business, coming out of yc. And then they raised half a million from hundreds of dog lovers on wefonder and there's a place on wefonder where you can see the comments that people leave.

Jonny Price:

Why, why did you invest in LeoLabs? And so many of those people were like I had. You know, three greyhounds die of cancer. So if I can be a part of you know, potentially the solution here, here's my $1,000, right Average investment on WeFund is $1,000. Median is $250. Minimum is $100. So it's small amounts of money and a vc investing 10 million dollars. Like they're really focused on the bottom line, right, but like if you're investing 200, maybe you think it's just cool to be a part of you know, maybe like giving this awesome founder a shot at curing canine cancer and also maybe, if it does work, then you make a bunch of money on that $200 investment but there's a really big kind of mission piece, I think, to a mission driven piece investor, investor motivation here has.

Tom Frank:

Has there been any um? I mean how we funders been around since what you say, 2014? Is that right so?

Jonny Price:

company founded. That was when the law went through Congress and then it took four years for the SEC to roll it out. So 2016 was when the laws were implemented and this went live for the first time. And then there was a big rule change in 2021, where the max you could raise went up from $1 million to $5 million, and now we can kind of roll up all investors to one line on the cap table, which is really important. Um, so yeah it. The laws became kind of interesting for really hot venture-backed startups like mercury in 2021.

Tom Frank:

so really it's only like three years old so when you talk about success stories because jeffrey asked you about some success stories right, talk about it from the other side. How about from it from an investor standpoint? Has there been in that amount of time periods where the guy and it doesn't have to be on we funder anywhere, where the guy put in the 200 bucks on a company he just wanted to see dwell and and we have seen some kind of crazy success story from that?

Jonny Price:

I don't think any like thousand X's. Yet There've certainly been a bunch of, you know, multiple returns on capital through either acquisitions or that there've been some kind of very small kind of IPOs, and there's been some companies that are kind of going through the typical kind of raising rounds at high valuations. Right, Fathom Video is. I don't know if you guys know Fathom, but it's this tool that like records your oh, I have heard of Fathom, yeah.

Jonny Price:

Yeah. So they did a round with us maybe a year or two ago and their growth rate is absolutely insane. And they just closed another. I think it was a Series A. They raised 20 million and they did 2 million for their customers. So they did did around 18 months ago, did around again just now and their valuation is like stair stepping up right. So there's lots of examples like that. In terms of the thousand extra turn, we haven't seen that yet and for me it's because really this has only been a really good fit for kind of these hawkers probably sticking like parallel vc back startups for the last three years and that's a pretty, that's a pretty short time frame in venture, especially because like that vintage is like kind of peak of the bubble and like ipo window has been kind of closed the last couple of years, so still pretty early days I think. But yeah, no kind of thousand x exits yet. We hope we'll see one in the in the coming years.

Jeffrey Sledge:

but even when it's been interesting in music because a couple guys have I know, you know uh have done really well like uh. There's a guy named troy carter. I know him for ages. He used to be in a group, uh label I worked at uh. He's not a big time manager and stuff he managed will smith and like he's like big time, but he was one of the angel investors in.

Jonny Price:

Uber.

Jeffrey Sledge:

He made a grip. Nas the rapper, has a VC. He was one of the angel investors in Ring. There's a couple guys in music that have a chameleon there. I forgot about him.

Jeffrey Sledge:

I forget which one he invested in earlier, but there are some guys that have done extremely well with this thing, so I wish they would share the information more. You just kind of hear they made a bunch of money, but they don't really ever sit down and talk about, like you're doing now, the process of it and how to get involved in it. So I appreciate you doing that.

Jonny Price:

Well, that's kind of what we're about, right, you doing that? Well, that's that's kind of what we're about, right. It's like normally these kind of early stage investments are reserved for millionaires, like kind of a very small percentage of the population. And yeah, we're trying to democratize it. We're trying to say everyone has the ability to, and everyone should be encouraged to, not just park your money in starbucks on on wall street but like invest in your local coffee shop, invest in Red Bay Coffee in Oakland, down the street from you.

Jonny Price:

And going back to the whole kind of the start, the introduction about how culture ties to money, that, for me, is really why I work at WeFunder to like imagine a financial system where there's more like connections and more community, hence community rounds, um, and like it's not kind of instant or it may be, it's institutions, but as well as the institutions not to knock the institutions, that's great, vcs are awesome, but like let's also let your customers and community, let's also let the people kind of participate. And then we would pitch the startup founder on. If your customers and community invest in your startup, then you're going to grow faster. Like every startup, every company wants to build stronger community, wants to delight their customers. And what better way to build community and delight your customers than by giving them a chance to become owners and investors in your startup, alongside these great VCs?

Tom Frank:

That's a great point, because I talked to a client recently about this and one of the things and I thought it was a valid point, but I'd love to know your response to it is they worried that if they did open up to a community round like this, that it would? In some way, no swear job, that it would, that it would, and how would you respond to this? That it would cheapen their brand. Because they're it, it makes it may. It might come across as we're desperate or we need oh I love that question.

Jonny Price:

I love that question. I would say the complete opposite. I mean it depends how you frame it right. Yeah, if you do a community round because you're struggling to raise from vcs, then sure that can be kind of optically challenging right and that can keep it. And especially if you say we're going to raise five million on we funder and then you span your network and you raise like $212,000 on WeFunder over six months, like yeah, that's a pretty bad signal. Sometimes I will say I would take the money that I need to get it to the next level over the signal. But whatever, that's a separate point.

Jonny Price:

But the things I'm talking about the Beehive example but the things I'm talking about the. The beehive example is like we just raised 32 million from the best vcs in the world. Like we don't have a problem raising money here. This isn't because we're desperate. This is an opportunity for us to invite our users and community into become our stakeholders and owners and we want to put our customers at the very center of everything we do.

Jonny Price:

And why should we make only VCs, like you know, rich at our IPO? Wouldn't it be cool if we let our writers and newsletter owners also kind of build wealth with us, and for me that is the opposite of cheapening your brand. Build wealth with us and for me that is the opposite of cheapening your brand. That is like a very emphatic statement around your brand and what you stand for and and kind of how customer centricity is at the core of everything you do and you're not just paying lip service to building community but you're actually delivering on that by giving your community this like kind of ultimate community benefit of becoming an investor in Beehive. Yeah, I'm pretty biased, though.

Jeffrey Sledge:

So how does?

Mickey Factz:

how does, how does you know? All of this is incredible, but how does someone who has no, uh, Prior knowledge to gaining capital get in contact with someone such as yourself to gain capital for their startup business, johnny, I think I think a lot of our listeners potentially may be startup companies that are looking to expand their growth. How, how would they be able to get in contact with someone such as yourself to grow their business?

Jonny Price:

Yeah, I mean weunder is a very open platform.

Jonny Price:

So I will say, like most of the companies that are raising capital on WeFunder like the founders maybe kind of know their way around raising capital, like they they're not coming to us to say like how should we do this?

Jonny Price:

They're coming to us and saying we're raising a million bucks on a safe with a 5 million cap and a 20% discount, like as part of our seed round, and you know we just want a platform to execute on it. It's definitely a spectrum and we definitely kind of can provide advice and guidance for founders in helping them think through how to structure the raise and how to think about the, the fundraise and the terms and that kind of thing. Um, but yeah, I would say, generally kind of founders on we funder are like relatively sophisticated in terms of, um, you know, their kind of comfort and ability to kind of raise capital, structure the raise, like go out and pitch investors, which is a very different world to the one I used to be in at Kiva, where that was like maybe much kind of smaller businesses looking for smaller amounts of money so we funded. The minimum that we do is 50K. So it tends to be maybe a little more kind of sophisticated entrepreneurs.

Jeffrey Sledge:

So let me ask you this question because you just you just brought some when you said that. So what is some advice you would give to somebody who wants to get involved with this on how to pitch their business to make it exciting for possible investors? Good question.

Jonny Price:

One way to answer. That is to say, treat WeFunder as you would if you were raising from conventional accredited angel investors and VCs. And if you were kind of to a regular investor that you're trying to raise capital from in a world where WeFunder doesn't exist, okay, what's problem? Solution traction, total addressable market, you know, team use of funds, whatever. That kind of standard slide deck is almost like copy and paste that onto we funder, like that's a little crude and simplistic. I do think one of the benefits of community rounds is like you can turn this into a marketing campaign and so you can have a video, for example, and you can maybe, you know, tell the story in a maybe simpler way. That kind of retail investors have an easier time kind of wrapping their heads around, but I think you maybe get into a little trouble if you try to deviate too much from that. And the same goes for, like the, the pitch deck or the we fund the profile page and also it goes to the terms.

Jonny Price:

So one of the things I I see kind of founders and companies making a mistake of is like if we were raising from vcs, we'd be raising on a 10 million dollar valuation. But because we're raising from, you know, retail investors, we're going to raise on a 25 million dollar valuation and like that. We don't love that.

Tom Frank:

Like that doesn't make sense.

Jonny Price:

Yeah, I think like you're gonna struggle to raise, like you're gonna have kind of questions and then it kind of messes with kind of the trajectory of your valuations through the round.

Jonny Price:

So um yeah, I kind of it's. It's again over simplistic, but I think the starting point is like if we funder didn't exist, what would your pitch deck look like? What would the structure of the round look like? Now put that on, we funder with it, with a few tweaks for kind of a larger, kind of marketing based approach to fundraising, like the video being a good example and what kind of companies like if I, if I owned a place and I was I was selling tires down the road WeFunder might not be for me.

Tom Frank:

What kind of companies make the most sense to leverage, whether it's WeFunder or any of the other ones. And then I'm going to ask you why WeFunder is better than all the competitors.

Jonny Price:

I used to actually run a tire company. I gave it up because it was too tiring.

Jeffrey Sledge:

Swear Jay, you got to put some credit in the swear job for that corny joke man.

Jonny Price:

You're welcome America, yeah, so we're kind of talking here about the Mercurys and the Beehives and the Fathoms, right, and they're kind of million, like so a bunch of companies and we fund everybody's five million dollars in a day as part of a larger vc round, right, and so those are always the sexiest ones, right. And from to your question earlier about like the negative signal and they're like cheapening the brand, like those are the ones like no worries on that front, right, because we've already raised from vcs. And that's a clear use case for weunder and those are the ones that are most fun for us on the team and we have the Slack channel of all the investments and like those days when those companies launch it's like boom, like thousands of like messages in the Slack channel with all these reasons why customers love Mercury and why they're so excited that Imad let them invest in the company. There's a totally other use case for WeFunder and this kind of goes to the question earlier of like it's a hundred K friends and family round for like the very first capital into a very early stage startup, maybe that pre-launch right or first outside capital, and for me that is also a super valid use case here where it's like that is also a super valid use case here, where it's like I think that using a platform like WeFund can make it a little bit easier for you to raise that first capital, and I usually give a few reasons for this.

Jonny Price:

Firstly, you can still raise from accredited investors, but now you can also raise from unaccredited investors. So, rather than just 5%, 10% of the population being able to invest, now 100% of the population can invest in you. Everyone in your network can invest. And also you can publicly promote it. So that's the other thing we haven't talked about. Normally in conventional fundraising you're privately soliciting investors. You can't talk about it on social media. We're in like 2024.

Jonny Price:

And the way that tech startups raise capital doesn't involve social media. It seems kind of weird to me. Yes, so with regulation crowdfunding, you can now kind of publicly promote it. You can email blast all your customers or you can post on linkedin or you can go on a podcast like this one and say, hey, we're letting our community invest. You can market it and get in the press etc. And then, thirdly, you get in front of we funder investors. So we'll our investor base will kind of come in and invest in in you. Typically, it's usually a minority of the round, but it's like some free money from being on the platform and then and then also we kind of lower the minimum check size, right.

Jonny Price:

So maybe it's tough to persuade your network to invest 10K, 20k in your business, but if you can go and refund it and raise a bunch of $1,000, $500 checks, you can turn a lot of no's from investors into yeses. For me, these are some ways in which raising on a platform like this one can make it a little bit easier for you to raise capital. If you're pretty early or need a boost in terms of raising capital and 2024 is a pretty tough fundraising environment 2020, 2021, covid, stimulus checks, zero interest rate policy, go, go, boom years like a lot of fun, easy to raise capital. 2024 a little bit more challenging, so it's hard for you to raise capital. I I think this can like give you make it a little bit easier maybe.

Mickey Factz:

Wow.

Tom Frank:

So are there very specific companies, though. Like when I look through some of these channels, like I see a lot of. I see a lot in like the spirits world, spirits and beer. I see a lot in the entertainment space. I see a lot in the tech space. Is there specific things like not not looking if they've already went through rounds or anything, but are there things that, like, people just love to get involved. Sports obviously seems like one of them. Tires, tires, tires is the one.

Jonny Price:

Tires absolutely. No I would say the main-.

Jeffrey Sledge:

Pep Boys.

Jonny Price:

Yeah, pep Boys, pep Boys.

Tom Frank:

Pep Boys.

Jonny Price:

I would say crudely like consumer facing, right? Yeah, for two reasons. One, if you have an audience of customers, consumers then you can send an email to those customers and now you can turn those into investors so that can make it a little bit easier to raise capital, and now you can turn those into investments, so that can make it a little bit easier to raise capital. And then, secondly, generally speaking, consumer-facing companies are going to see more value in the idea of huh, if my customers invest in me, then maybe they're going to buy more of my whiskey, more of my tires.

Jeffrey Sledge:

So yeah, so it's more about branding yourself or your again like a better branding yourself and then selling the customer yourself who happens to own this thing? I, I see that. I think I mentioned um to mickey and um tom before. There's a woman. I just saw her on on uh tiktok yesterday. I can't remember her name. She was a liquor called Uncle Nearest.

Tom Frank:

And Uncle Nearest was.

Jeffrey Sledge:

You know what I'm talking about, right? Uncle Nearest was the guy who actually taught Jack.

Mickey Factz:

Daniels how to distill.

Tom Frank:

Yeah, actually I think she is, I think it is or outside of Nashville.

Jeffrey Sledge:

Yeah, yeah, you're right in that Tennessee area. Yep, absolutely, because that's where whiskey comes from. Absolutely because that's where whiskey comes from. So I've noticed with her I think it was two of them actually, it was her and another woman I noticed that they really branded this. Obviously they know what they're talking about, they know the spirits world, they know how to make it and all that. But I noticed that they branded themselves as these two black women entrepreneurs who are in this space where there's no black people really, let alone two black women. And that's really driven, besides the product being I don't really drink, but I hear the product is really good but also that's driven.

Jeffrey Sledge:

I think it's driven a lot of people, because people want to invest in them, they want to like especially the black community. It's like we got to support them, especially when you hear the backstory of how Uncle Nearest got his, his, you know kind of this stuff stolen and they didn't get the credit. So, like I see what you're saying, that's how you gotta gotta brand yourself. You know there's a woman down here called named pinky cole. She has a company called um restaurant, rather called slutty vegan. She makes like obviously vegan food but it's like burgers and stuff and she has a few of them now.

Jonny Price:

Send it my way, man. Send it my way, we'd love to have those guys on WeFund. They're doing a community run Slutty Vegan.

Jeffrey Sledge:

Yeah, slutty Vegan. It's big. That's actually right down the block from Marcus' restaurant, but people buy into her as much as the restaurant, the people like her, Anything she does. When she does these openings they're always crowded. People really like her. So I see what you're saying. I don't think it's cool to be faceless in 2024.

Jonny Price:

Exactly, that's a good way of putting it. Kim Lewis is the founder of Curlmix, black female founder in Chicago hair care CPG company and she's done now two WeFunder rounds and if you go to WeFundercom slash Curlmix and then there's a tab with all the investor comments and if you read through that it's like so many of her customers saying I'm so stoked to invest in a black female founder like I've been like using your product for years.

Jonny Price:

Like I'm so glad you guys have basically built this company and built a product that caters to me and I'm like really stoked to be able to invest in you. Or like Lily Brose is a media publishing company of like Latino or kind of Spanish language kids books, started by two Latino women in LA. And again you read the comments like so many of their investors are Latina women. Like if you look at like how many VCs are, like whether GPs at Vcs are latino women or black women, like it ain't many. And so a big part of kind of why I work at we fund there is, like if you can empower latino women to be the angel investors with increments starting at a hundred bucks, then yeah, maybe capital flowing to Latino women, black female founders, um, so, yeah, so a lot of vegan. Uh, send them my way, man.

Jeffrey Sledge:

I will.

Jonny Price:

I will. What's the future? What are you going to pop, boys?

Jeffrey Sledge:

That's what we we need, you know we need. We need three black women called pep girls. We need three black women called Pep Girls, pep.

Jonny Price:

Girls, pep Girls. There you go, pep Girls Coming on WeFund the future I got you?

Tom Frank:

What do you think the future holds? I mean, this whole topic has already changed dramatically in the last 10 years. What are you if you had a crystal ball? What's the future of community?

Jonny Price:

funding. Yeah, the future that we're trying to usher in is. You asked a great question earlier, right, this is I feel like the hardest thing with my job is to overcome this negative stigma where it's like that's a negative signal that you let you delighted your customers and community by letting them invest in your startup on the same terms as and it's like but it is a negative stigma and like my biggest job, our biggest job as a company, is to change that stigma and to change it from a world today where maybe it's a negative signal that for you to let you invest in your startup, to where it's an emphatically positive signal and it's almost a black mark if you only let rich vcs benefit from the wealth that you create in building your consumer-facing startup and that like the customers of companies, raising the founders to say, yo, like your company, how did I let their customers invest? You letting me invest in you? Um, and so that's the vision that we're trying, especially for consumer facing companies can be b2b as well, can be biotech companies.

Jonny Price:

Leo labs, right, is a biotech company. That the canine cancer company I mentioned. So it doesn't have to be b2c, but b2c, I think, is a sweet spot. So in like five, ten years time, the expectation that if you're a b2c startup where it's a friends and family, precede seed series a, b, seed series A, b, c. All along the way you're letting your customers participate on the same terms as VCs. We haven't even talked about this, but WeFunders' mission is pretty ambitious. But fix capitalism. We say capitalism is broken, like the stat I gave about concentration of wealth um earlier, like more and more wealth being concentrated in the hands of kind of fewer and fewer people it's like not great.

Jonny Price:

That's like doesn't end well. Um, that yeah like wonder if we're starting to see some of the fraying of like the capitalist system, because capitalism is not working for a lot of people from a kind of, at least from an equality perspective. So, yeah, that's what like for us, like if more people get to kind of democratically participate in investing in these kind of cool startup like fast-growing companies, um then you know, let's fix capitalism, that's's the future.

Tom Frank:

That's a big, bold statement right there.

Jonny Price:

Pretty ambitious, it is pretty ambitious.

Tom Frank:

Yeah, yeah, wow, mickey, what else you got?

Mickey Factz:

I'm just floored by this interview. I think I'm just I'm sitting here just kind of listening, you know, as someone who has started his own company very first ever one, and only hip hop school and it is the only one in existence you know, just hearing this thought process of how capital was raised and all of the you know legalities that go behind it. I'm just kind of sitting here just, you know, soaking it all in and, you know, trying to see how I fit in something like this, you know, because, um, this knowledge is very, very crucial, uh, to take things to the next level for myself, you know. So I'm just kind of just taking it all in. It's great.

Tom Frank:

Well, is there anything that we didn't ask you that you want to share?

Jonny Price:

Um, I would say kind of a little selfish maybe, but just a plug, like, if you are a startup founder and you kind of dig the idea of, you know, letting your customers participate in investing in your startup, check out, check out we funder and then, if you like the idea of investing in startups that are doing cool things in the world and badass founders, um, you know what kind of causes that maybe you care about. If you want to invest in your local community, there's like a map feature on we funder where you can check out startups fundraising near me, you know it's you can invest for 100 bucks and become an angel investor. Like we're trying to kind of lower the barrier to entry so that more people more people participate as angel investors.

Jonny Price:

It's really kind of quick and easy to get set up and give it a spin.

Mickey Factz:

Yeah, I'm signing up. Let me know right now.

Tom Frank:

You're signing up.

Mickey Factz:

I'm signing up for WeFund.

Tom Frank:

I'm already signed up, mick Ham, I'm always. I'm always one step ahead. You can be a referral for me. Well, hey, man, that was pretty impressive. I learned a ton from that, and this is something interesting. We need to keep checking in with you every so often and see how this entire industry is changing and, hopefully, how we funder and other companies like yours are actively going to change capitalism, because I think that's a pretty big endeavor, but one that's desperately needed well, thank you, this has been a super fun conversation and, yeah, I love what you guys are doing.

Jonny Price:

I I think it makes a ton of sense that you had me on and you kind of covered this way of raising capital, like capital and culture often seem maybe, like you know, almost like very separate. Yeah for me one way to kind of bridge that gap.

Jeffrey Sledge:

No, it's dope. This, this, this was. This was really interesting. Like I said, I'm glad that Mickey said that you were able to come on here and break some things down because you know, like I said, I'll go back to this, this things I was saying earlier. Like you know, or Troy was Uber and that's just amazing, but I remember we got the details on how they found out about it earlier. I guess it was probably just through you know connections. Nas is a big star, you know, and I know he was, maybe still is. I know at one point he was hanging out with Zuckerberg pretty tough, so he probably got you know some inside information. But, like I said, but the average people isn't that. So this is beautiful what you're doing, because I'm not going to be hanging out with Zuckerberg it's not going to happen, but I can still be an investor. It's cool.

Tom Frank:

It's very cool. All right people, that was Johnny Price, london's own.

Jonny Price:

Cheers, guys, you're awesome.

Tom Frank:

All right, folks, that's our show. Tune in to Unglossy encoding brand and culture on Apple Podcasts, Spotify or YouTube, and follow us on Instagram at UnglossyPod to join the conversation. Until next time, I'm Tom Frank.

Jeffrey Sledge:

I'm Jeffrey Sledge.

Tom Frank:

Smicky.

Jeffrey Sledge:

That was good.

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Mickey Factz

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