If you need more proof that FundersClub wants to radically change startup funding by letting non-VCs invest, it just closed a $6 million seed round… There are still questions about its legality, but investors include A-listers YC, First Round, Chris Dixon, and Aaron Levie. Their support shows Silicon Valley is ready to disrupt itself by inviting the crowd to the cap table.
For those unfamiliar, FundersClub is a website that picks promising startups and lets people invest in them over the web in return for real equity. Anyone who’s an “accredited investor” (earns over $200,000 a year or has a net worth over $1 million) can browse startups with open rounds ranging from a few hundred thousand to a few million dollars. They learn about the businesses, pick ones they believe in, and plop down as little a $1,000. The average investment so far is $2500. All the legal paperwork and money transfer happens right there online.
