Lessons Learned From Crowdfunding From Arlene’s CEO & Co-Founder, Colin Jacobsen
In today’s world, technology is growing at an all-time high. Immersive experiences—like AR, VR, and 360—are used in almost every industry to engage customers and drive sales. Arlene is taking this technology to a new level with a self-serve, immersive platform that lowers the barrier to entry for brands looking to generate data-driven experiences at scale.
In today’s post, we speak to Colin about Arlene’s recent raise through the crowdfunding platform, Republic. Before co-founding Arlene, Colin was a digital marketer with years of commercial experience at Twitter, MoPub, and AOL.
What made you want to raise capital via crowdfunding?
Our team had a negative stigma around crowdfunding and was hesitant about the quality of these types of platforms. Once introduced to Republic’s team, we learned more about the platform and applied.
We liked that Republic scrutinized companies during due diligence to best feature high-potential companies. We also liked the support that Republic provided for fundraising campaign creation and optimization, to help maximize value.
How does Republic help companies like yours raise capital?
Kicking off the process, they help you create your campaign on their site. They give best practices and offer account management which makes the process easy. They assist in surfacing key metrics, strategies, clients, and other aspects that are attractive to Republic investors.
Republic’s team also helps coordinates interviews, features, and other pieces of content that are separate from the campaign page. Their guidance helped our company meet our fundraising goals.
What does Republic get for helping companies like Arlene?
Republic takes 8% of your raise (6% cash, 2% in the form of a SAFE). It’s something to consider before getting started, but our team felt that it was the right move.
What were some of the growing pains you learned by doing this?
There were a few pain points, but since Republic is also a startup, that was to be expected. The biggest initial hurdle was a requirement to raise $25k on Republic before they assist with any marketing. We hit this amount quickly, but it could be limiting for businesses that don’t have a strong friends/family/advisor/investor network.
We expected to be featured on the homepage, which drives considerable funds. After our campaign launched, Republic required companies to trend to be featured on the homepage (>100 investors in less than 48 hours).
We also had concerns that priority was given to bigger companies with more revenue-raising later stage rounds (e.g. Gumroad). Regardless, we’re still happy with our raise and it sounds like Republic is working on improving some of these processes.
What would be your advice to another startup that might be considering crowdfunding their investment?
Crowdfunding is time-consuming and requires active management to be successful. You’ll be answering lots of questions, frequently messaging with potential investors (who might only invest as little as $150), and posting regular updates.
Build a community and clearly communicate why you’re running your campaign. Investors want to understand what they’re signing up for and it’s essential to calibrate your messaging and value proposition. Define your campaign goals. Some companies are looking to raise large rounds, others are more interested in marketing their name to the Republic audience.
Have a strong social presence. Many Republic investors will follow your company on social. Showcasing your work and wins goes a long way.
A couple investors didn’t invest right away, but they posted about us and/or brought us onto podcasts. This helped bring Arlene into the spotlight. The investors also ended up investing.
Crowdfunding is great if you have people interested in investing smaller amounts (<$5k). Instead of a crowded cap table with fewer strategic investors, Republic consolidates smaller investors (unaccredited included) with a single entry point.
Final question: explain what you mean about “the democratization of investment” and why that clicked with you in terms of Arlene’s mission to democratize immersive experiences.
Arlene takes complicated immersive technology and lowers the barrier of entry so any company can successfully utilize it. Arlene sees parallels with Republic, which is taking limited investment opportunities and making them available to all.
It’s in Arlene’s DNA to elevate the smaller players who are looking to achieve great things.
Interested in learning more about Arlene?
For more information on how you can build immersive experiences with Arlene, please contact us to set up a brief chat.