To build, launch, and grow a product like Ampled, we needed to raise outside capital. As a cooperative, that required some creativity and a very different approach to how a typical startup fundraises. Here’s how we did it.
How We Raised Money
Initial Seed Funding ($100,000)
In order to dedicate time and resources to build Ampled and get it off the ground with a working product, we approached friends and family for investments. This allowed us the ability to complete a working product, and get our first users on for beta testing.
Our Investors (Friends & Family):
Here are our gracious friends and family that were incredibly generous and indispensable to getting Ampled off the ground.
Blair Gardner: $20,000
Ed Goodwin: $10,000
Derek Singleton: $15,000
Truong Vo: $15,000
Steve Reardon: $5,000
Grant Robey: $5,000
Being a co-op, we had to approach fundraising very differently from a typical startup. Our commitment to maintaining 100% artist, worker, and community ownership meant that we had to choose an alternative to selling equity, or using a security that converts to equity.
Our solution was to come up with a revenue-share based investment. For investors, this does not include equity/ ownership, but allows them to reduce the risk of an all-or-nothing investment and also get earlier returns (albeit with less upside than a traditional early stage startup investment). For Ampled, financing ourselves through a revenue share allowed us to raise money in way that didn’t put artificial pressure on growth or place us on a path to sell Ampled to large corporation. Most importantly, raising money in this way allowed us to maintain artist, worker, and community ownership of the platform.
Revenue-share investments like this are referred to as “Revenue Based Financing”. We decided to set aside 5% of Ampled’s net revenue towards paying back investors to a capped return. We wanted to make sure that a return was commiserate with the risk associated with investing in Ampled at such an early stage, so for this group we decided that a 4x return on their investment made the most sense.
We’ll soon post the terms here.
What We Spent The Money On:
The initial seed raise of $100,000 gave us a runway of 8 months from September 2018 to the beginning of June 2019.
Payroll (Austin): $30,000
General Expenses & Overhead: $10,000
Additional Seed Funding ($350,000)
We are currently raising an additional $350,000 in funding.
Invest In Ampled
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