A more detailed explanation is below, but first things first.
FundersClub has created an online marketplace that allows accredited investors to become equity holders in ‘FundersClub-managed venture funds’ designed to finance private startups.
The $1.3 million invested by FundersClub thus includes five separate funds, each created to finance a single company (one of which is FundersClub’s own fund, which raised $463,801 from 85 investors).
To become an accredited investor at FundersClub, you need to be an individual “with greater than $200,000 of annual income (or $300,000 combined income with a spouse) or investor with $1 million or greater personal net worth, not including their primary residence.” There are currently more than 4,000 accredited investors at FundersClub.
Here’s a rundown of the other funds:
- Coinbase fund, which raised $165,785 from 31 investors
- Tracks.by fund, which raised $87,500 from 28 investors
- Sponsorfied fund, which raised $98,400 from 29 investors
- Virool fund, which raised $509,800 from 70 investors
That’s roughly $860,000 in total for the Y Combinator companies.
Brian Armstrong, founder and CEO of Coinbase, is a fan:
“FundersClub made fundraising a breeze. The angel investors in its network were much more willing to write checks at our stage, and could easily complete all the paperwork online. This is how fundraising should be.”
FundersClub’s management entity runs the payment and investing process and serves as the fund manager for each of the five funds it has closed thus far.
FundersClub says its strength lies in serving as the single point of contact between fund investors and startups, thus sparing companies “the headache of coordinating a large group of investors”.
FundersClub was launched in July 2012 by serial entrepreneurs and investors Alex Mittal and Boris Silver, and backed by the likes of Andreessen Horowitz, First Round Capital, Tim Draper and more.
Image credit: Thinkstock