Episode 8: Democratizing Startup Investment Through Equity Crowdfunding

Welcome back to another episode of Tech Forward, listeners! This week I spoke with Caroline Hofmann, COO and Co-Founder of equity crowdfunding platform Republic. In her role as Chief Operating Officer, Caroline manages the company’s multi-faceted operation and its fast-growing team. Prior to Republic, she spent seven years as a management consultant at McKinsey & Company in London and New York. Caroline is also an active angel investor and mentor to several startups.

In 2016, title 3 of the Jobs Act opened up venture investing to non-accredited investors, which thereby opened the doors to equity crowdfunding. If you’re unfamiliar with the term, think of equity crowdfunding as a combination of angel investing, and crowdfunding as you know it through platforms like GoFundMe and Kickstarter. The investment itself is similar to those donations, but the investor holds a stake in the company moving forward. While Republic does not require investors to disclose their net worth, Caroline estimates that 80% of investors on their platform are non-accredited — which means that they would not otherwise have access to startup investing!

Many founders struggle to get access to venture capital because they either lack the necessary connections to tap into Silicon Valley money, or they simply don’t live on the coast. Equity crowdfunding opens doors for founders with great business ideas and extended networks of friends and families. The model allows them to raise funding within their communities, and from a much broader user base.

While they accept founders of any origin or geographic location, and companies in any industry, Republic specifically targets founders from underrepresented groups. Republic has a strong commitment to accessibility, and the democratization of startup investing. “We believe it’s important to support underserved founders, because good ideas can come from anywhere. [...] Supporting these founders is great for us, but it also has a fundamentally positive impact on the economy. If more diverse ideas get funded, more diverse companies grow, and create jobs, and create something that customers all over the country really want.”

During our conversation, Caroline also spoke about the transition from consulting to the world of tech, the rewarding balancing act of life as a working mother, and navigating the regulations involved in equity crowdfunding. I hope all of you out there listening find this interview as informative (and, in the case of one fact, as surprising) as I did. Thank you for listening, and a big thank you to Caroline for joining me this week!