Republic announced its intent to enter crowdfunding sector as a FINRA regulated funding portal back in 2016 – the same year Reg CF became actionable under rules established by the JOBS Act of 2012. At that time, Republic said it would focus on raising capital for technology companies, female and minority founded businesses and companies with a social impact.
Since mid 2016, Republic has successfully funded 55+ startups and, according to the company, the last six months have seen twice the amount invested on Republic as all of 2016 and 2017.
Republic also jumped into the initial coin offering (ICO) space with several securities – some listed in partnership with CoinList – another offshoot of AngelList
Republic says they “carefully curate the startups for you from thousands of applications” meaning no bogus offerings are posted on their platform. Their diligence process is outlined in the following steps:
- Business model – How does the startup make or intend to make money? How much can it make?
- Social impact – How big is their impact and how will they fulfill their mission?
- Market – How large or disruptive can this business be? What’s their unfair advantage over the competitors?
- Technology – How is technology used to solve the problem? How unique and difficult to replicate is it?
- Team – Besides founders, does the team have the right people in the appropriate roles, experienced advisors, driven employees?
- Fact checking – Is the information presented in the pitch factual? We verify key contracts and important agreements.
- Terms – Are the funding goals reasonable for the startup’s runway? Is the valuation cap appropriate at the startup’s current stage?
- Eligibility – Does the startup meet the legal criteria for equity crowdfunding? We do a financial and legal review and run background checks on founders and officers. As well, all companies must be US based.
While being in operation for the past two years and experiencing solid growth is an accomplishment, it is still very early for this sector of finance. Inevitably, the platforms will be judged based on the returns for investors and the impact provided for their issuers.