A new investment crowdfunding platform joined the fray over the summer. Founded by AngelList alumni, Republic.co brings with it a high level of street cred—and ambitions to match. Its focus: everyday investors and companies that are innovative, diverse and mission-driven.
Since it was launched six years ago, AngelList has become the gathering place for early stage investors and startups looking for funding (as well as jobs), facilitating more than $250 million in deals to date. On the site, wealthy investors can invest alongside well known professional angel and venture capital investors. When Regulation Crowdfunding (also known as Title III of the JOBS Act) finally went live last year, Kendrick Nguyen, then general counsel at AngelList, saw an opportunity.
“AngelList democratized venture capital,” says Nguyen, pictured above. “But it’s still an insider’s game. With Title III, we have an opportunity to truly democratize investing.”
When it became clear that AngelList was not interested in broadening its scope to everyday investors, Nguyen and Paul Menchov, former head of fundraising infrastructure at AngelList, decided to launch their own platform focused on Title III, which allows anyone to invest in private companies They have the blessing and support of their former employer—AngelList is an investor in Republic and CEO Naval Ravikant is an advisor.
Republic hopes to do for everyday investors what AngelList did for angel and venture investors. “The interest is there,” says Nguyen, citing the popularity of mass media shows like Shark Tank. “It’s time to democratize it.”
And while AngelList leans heavily toward Silicon Valley startups, Republic is looking to be more inclusive when it comes to the types of businesses it works with. “We’re promoting more participation in entrepreneurship,” says Nguyen. “Good ideas are equally distributed, but financing is not.”
New York-based Republic is focusing on three broad categories of businesses, says Nguyen: innovative companies, such as Farm from a Box, an off-the-grid toolkit for sustainable agriculture, and Maternova, which makes Zika-protective apparel; companies with diverse founding teams, whether women and minorities or “two kids from Alabama”; and mission-driven ventures.
“People need to be passionate about what they do, beside just the bottom line,” says Nguyen.
So far, four companies have listed campaigns on the site: in addition to Maternova and Farm from a Box, there is RaceYa, a New York-based company that teaches girls STEM skills through customizable remote-controlled cars, and Youngry, a Newport Beach, Calif. media and e-commerce platform for Millennials. Nguyen says he has 100 companies in the pipeline but is currently focused on helping the initial four successfully complete their rounds.
“I’m not building a crowdfunding platform, I’m building a community.”
Republic charges businesses a 5% cash commission, plus 2% of the securities issued in the fundraising round. (There is no charge for investors). It prefers a form of convertible debt based on the Safe model, but leaves the decision up to the business. The platform is very hands on: companies listing on it get a lot of help setting up their campaigns, and have access to an impressive roster of advisors, such as Shiza Shahid, the founder of NOW Ventures and the Malala Fund, and AngelList’s Ravikant.
For Nguyen, Republic is more than a money-making venture; it’s also an attempt to pay it forward. As a Vietnamese immigrant whose family moved to the U.S. when he was ten, “I was always on the outside in a way,” he says. “Each and every door that was opened for me was because someone took an interest and believed in me,” Nguyen adds, like the father of a friend who encouraged him to study law.
To that end, Nguyen is looking to build a supportive community for entrepreneurs that will be there long after their initial fundraising campaign is over. “I’m not building a crowdfunding platform,” he says. “I’m building a community.”