Business Owner Launches Innovation Using Creative Funding
Ask any start-up founder what keeps them up at night and they’ll respond with the unequivocal question; ‘how do I possibly raise enough capital to fund my business without losing too much equity or control over it?’
It’s the overarching theme that plagues every entrepreneur. Along with this, it becomes a David and Goliath race to market against big corporations who already have the funding and resources to win.
However, really good ideas, the game-changing ones that deserve a spot among the unicorns, shouldn’t have to take the often long and arduous road of bootstrapping their way to success.
That’s the challenge Mike Wellet, President and co-owner of Whitman, an environmental consulting and engineering company and long-time TAB member faced when determining how he would take his new business to the next level.
Mike and his team created a new company, Victor Energy (Invest In Victor Energy – Reg CF), which has partnered with Lehigh University to develop and patent a light-weight roof-top technology that will allow solar energy to be placed on thousands of roof-tops vs on thousands of acres of farmland. This revolutionary technology has the added “green” benefit of freeing up farmland for natural vegetation to prosper once again.
Because the total grid-connected energy market is valued at about $2.5 trillion per year globally and there is 10 billion square feet of rooftop real estate, Victor Energy is offering investors the ability to invest early in a large potential market with a very lucrative upside.
Considering the power and possibilities that Victor Energy’s futuristic technology has to offer, Mike knew there were too many risks at play to not move fast.
Enter in Regulation CF. The JOBS act of 2016 gave entrepreneurs the ability to raise equity, up to a certain limit, without going public or meeting tough private placement standards. Entrepreneurs can now rely on the ‘crowd’ to publicly advertise their capital raises and to fund their companies.
Reg CF allows small businesses to raise up to $5mm in equity, through small dollar investments, which are marketed through social media. What makes this resource so compelling is that the minimum investment is only $250 so it appeals to both savvy investors and to opportunistic investors wanting to start small. Prior to this legislation being signed, private companies could only raise equity capital from accredited investors, the wealthiest 2% of Americans. Using Regulation CF and it’s easy 6-step process, private early-stage companies can raise money from all Americans looking to invest in smaller sums that promise high growth opportunities.
Where start-ups used to have to rely on one or two “angel” investors (becoming solely dependent on them), they can now use equity crowdfunding to turn customers and followers into investors.
Owner to Owner: The Power of TAB
It was through a TAB board meeting that we learned, once again, how truly impactful our business owner advisory boards are.
Mike’s initial idea to pursue Reg CF funding came from a board meeting discussion with fellow board member and business owner, Eric Schoenfeld. Eric is a founding partner of Mint Advertising and is also considering Reg CF for his own new business, Givafifth.
Mike’s story is powerful in that Victor Energy will reshape the future of energy sourcing; but it also tells the altering effect of TAB and the Business Owner Advisory Board process.
We’re more than a place for business owners to discuss challenges and gain new insights from other like-minded entrepreneurs. We strive to help each business succeed financially through innovation and support. Growth for each member is at the core of our business model.
Interested in following Victor Energy’s crowdfunding journey (while learning how you can use similar resources for your business)?
Subscribe below to our newsletter as we cover the exact steps businesses like yours can take to crowdfund their way to the top. Or contact Vicky Richards directly at vrichards@tab-cnj.com for more information.