Thought Leader in Financial Technology: DealMaker CEO Rebecca Kacaba (Part 5)

Sramana Mitra: I think this is a valuable discussion for people trying to understand equity crowdfunding. There need to be guard rails to protect consumers. I have seen what happened in the dot com crash. A lot of people got completely creamed out.

Rebecca Kacaba: Those were public stocks, generally en masse.

Sramana Mitra: Everything. There were public stocks and there were these friends and family investors. This is still happening. It’s not like it’s not happening still. People have dreams of making money off of startups.

The net of what we discussed here is that your industry has moved out of its original position. When was the JOBS Act?

Rebecca Kacaba: 2015.

Sramana Mitra: I would say from 2016 to 2017, I was still having these conversations with people running equity crowdfunding platforms who still wanted sophisticated venture investors to lead the round. Then they would do all the customer financing and community financing around it anchored by an institutional investor.

What you are saying is that, now, the industry has moved past that. Entrepreneurs are setting pricing on rounds and a lot more open rounds are happening. This is actually an interesting trend.

Rebecca Kacaba: That’s right.

Sramana Mitra: Where do you see the trends moving?

Rebecca Kacaba: What we’re seeing is impact investing. So, people care about the business that they’re investing in – how it impacts society and what it’s contributing. It’s a trend that’s led by millennials.

Sramana Mitra: Have you seen exits come out of your clients?

Rebecca Kacaba: Yes, absolutely. We have publicly-traded companies that do this. We have companies that have gone public or we have companies that are just at the Reg CF stage. They’re earlier in the journey.

Sramana Mitra: So exits have already happened?

Rebecca Kacaba: Yes.

Sramana Mitra: What else do you want to highlight?

Rebecca Kacaba: While everybody wants a VC to lead a round, it’s a very rare case for an entrepreneur to get that kind of funding. Our message to them is there are other kinds of funding available to them. There are alternative paths. Raising from their community and turning to people who feel passionately about what they’re doing into shareholders is a great way to capitalize the business. I’ve done it myself.

Sramana Mitra: Do you white-label your platform to other people?

Rebecca Kacaba: Yes. They are investing as a lead and they have a community that wants to invest alongside them. They can build a community on top of our portal.

Sramana Mitra: You work with VCs as well in this mode?

Rebecca Kacaba: Yes.

Sramana Mitra: Is this a trend?

Rebecca Kacaba: Yes, we’re seeing a lot of that.

Sramana Mitra: Are you at liberty to quote names?

Rebecca Kacaba: Wavemaker is an accelerator and venture lab. They help build the companies. They seed the capital and then they bring in retail investors. 10X is a really exciting project based in Miami where they’re helping companies along the way. There are other traditional broker-dealers who are using our system.

Sramana Mitra: Thank you for your time.

This segment is part 5 in the series : Thought Leader in Financial Technology: DealMaker CEO Rebecca Kacaba
1 2 3 4 5