All venture capital firms are not created equal, and that most certainly holds true for the San Francisco company, FundersClub. Their unique marketplace of sorts allows credited investors to invest in a range of companies, with a focus on the startup community. What was once accomplished in unwieldy offline settings is made easier, and more transparent, with their online platform.
We had a chance to talk with Alex Mittal of FundersClub to learn more about the company, how they got their start, and their plans for the future. Check it out below!
Care to introduce yourself and your role with FundersClub?
Sure! I’m Alex Mittal, Co-Founder & CEO of FundersClub.
In just a couple sentences, what is FundersClub?
FundersClub launched as the first online VC in the United States back in 2012. Today we’re global and supporting startups headquartered in 19 countries. We operate as a traditional institutional VC firm plugged into Silicon Valley, but use network effects and software to scale the VC model. As an example, our LP network is over 17,000-strong and includes C-level executives and other decision makers from 63 countries.
Using software, we leverage our network members’ insights and connections to uncover great founders. The Wall Street Journal recently drew analogy to FundersClub as implementing the Google PageRank of VC, an apt analogy. Similarly, we use our network to help our founders gain an unrivaled rolodex for hiring, follow-on capital, customers, and more.
What inspired the creation of the company?
My co-founder and I are both startup entrepreneurs who started and sold our own companies and then invested in startups ourselves. From either side of the table, you realize that startup fundraising and startup investing is far from a delightful experience. That being said, “fixing VC” is far from easy, and rather than wanting to disrupt VC for disruption’s sake, we wanted to borrow what made sense to keep and only change what we felt should be improved.
After getting the advice and backing of some of the key innovators in early stage startups, folks like Josh Kopelman of First Round Capital, one of the first seed stage VC firms, and Paul Graham of Y Combinator, the world’s leading startup accelerator, we decided to make a go for it. This is not your couple-dudes-in-a-smoke-filled-back-room-picking-winners version of VC. FundersClub is what we think the entire VC industry is moving towards in the new century–network, platform, results.
Can anyone get into FundersClub and start investing?
No, we’re a vetted community. Because FundersClub operates as a traditional VC firm, per SEC regulations, for starters you must be an accredited investor to be able to invest with FundersClub. Beyond this government mandated wealth requirement, we also vet for compliance-related and other factors to ensure the community reflects our values.
How does the JOBS Act affect your business and business model?
We’ve never used and likely will never use the JOBS Act. FundersClub is a VC firm and platform, not a JOBS Act portal practicing equity crowdfunding. I’ve previously shared some of my thoughts on JOBS Act Title III legislation in Mattermark and Inc Magazine.
Anything exciting coming to FundersClub in the near future?
VC is such a black box and we wanted to help change that. We recently launched a number of educational programs to help more people get acquainted with the insider knowledge and lingo of the industry. You can find how-to guides and more on our blog and some more technical knowledge in our education center. Expect much more from us in this area in the coming months.
Thanks for taking the time to answer some of our questions, anything you’d like to close with?
Thanks for having me!
FundersClub is bringing some fresh air into and industry that has been slow on adopting many of the changes they helped make possible in the first place (think Twitter, Google, Facebook, etc). By using an innovative, easy-to-use platform, the company is transforming how investing is accomplished. Thanks to FC’s investing committee, investors that use the service can feel comfortable knowing that their money is being invested in promising startups. Their recent launch of educational materials only further the comfort investors should feel, by equipping them with valuable, insider knowledge meant to educate and inform.
We’d like to thank Alex for taking the time to answer some of our questions, find out more about Alex and the company here.
This post is part of our contributor series. It is written and published independently of TNW.