How to Raise Capital from the Crowd with Devin Thorpe

0:28Who's ready to rock today, Fire Nation? of that and also how patient capital is available. What does that mean? And oh, so much more. And a big thank you for sponsoring today's episode goes to Devin and our sponsors. Is now the time to grow a successful business? Attend the world's highest rated business growth workshop taught personally by Clay Clark and now featuring football star Tim Tebow and President Trump's son, Eric Trump at thrivetimeshow.com slash eofire. Again, request life-changing tickets today at thrivetimeshow.com slash EO fire. Devin, say what's up to Fire Nation and share something that you believe about becoming successful that most people disagree with.

1:11I think a lot of people, most in fact, disagree with the premise that profit and social impact, doing good in the world can go together. And I've seen over and over again, how success can be driven by genuine impact and doing good in the world. They can go hand in hand. They're not inherently in conflict. Fire Nation, what a start to what will be a fantastic episode about how to raise capital from the crowd. And Devin, you believe that raising capital from the crowd is actually an option for every entrepreneur. So Fire Nation, that's you listening right now. Tell us more. Not everybody can qualify for a bank loan.

2:00And let's be honest, most entrepreneurs are not really eligible for venture capital. They don't fit the model. But everyone has a network and everyone has a network that will support them. And so everyone can raise some money from the crowd. I will add the caveat that not everyone can raise enough money from the crowd. So it's not a perfect fit for everyone, but everyone can raise something. And so everyone who's an entrepreneur who needs capital should at least explore the option to determine if it makes sense in the end. Now, if we're being honest, raising capital from the crowd is challenging.

2:43So give us some advice to make this process a little more achievable. There is no question. It is hard work. You've done a lot of crowdfunding campaigns on Kickstarter and you've been very successful. Of course, you have a huge following. And so people who listen to your show or can can see that having a following, having customers, having, you know, a foundation like that is an important aspect. But anyone can do it. Everyone has some network. And so they should consider it. But some of the things that are making it easier these days, and it's really exciting, are these AI tools that now they're getting so incredibly robust.

3:31And more and more people are building more sophisticated tools for the regulated investment crowdfunding marketplace. So AI is a key part of the solution for making this easier. Maybe give us one quick example of a way that you've seen AI, at least in one place, in one niche, really work. I use it all the time. Primarily as an investor, I use it for doing due diligence. on crowdfund offerings because the AI bot can read a form C and all of the documents, all the disclosure almost instantly and give me feedback and rate an investment opportunity on a scale from one to 10 and allow me to get a quick sense and help me decide whether I want to spend more time doing due diligence on that offering.

4:28And it doesn't interject the bias that I might bring to the table. So it's great, but it can also help you write and complete the details for your form C because it knows what the form C is and what goes on it and can help you build it. So it's a great tool. So Devin, you believe that those who fail, fail by neglect. What does that mean? There are so many people who start a crowdfunding campaign with the misunderstanding that all they have to do is put up a page. And you've done it before, John, on Kickstarter. And you know, putting up the page is the easy part. You might spend 10 hours designing that page, but in the end, that was the easy part.

5:18Getting your crowd to go there and support you and to get your products or to invest in your business. That's the hard part. And so, yeah, when people start with the premise, the misunderstanding that they'll get the page up and someone else will promote it and help them and raise the money. Yeah, they will fail. They will fail. And it happens all the time. But those who work always raise some money. And those who work hard generally reach their goals. Yeah, I'm thinking back to 2016 when I launched my first of many Kickstarter campaigns I did in subsequent years. I spent months prepping my audience, doing interviews, sending out newsletters and social media, like warming my audience up to what I was doing, bringing them along on that journey so that the day that I launched, it wasn't like, okay, I just launched something, check it out.

6:14It was like, oh, it's finally here. And we We had a big launch party. I remember it was in downtown San Diego. And we hit over$80 ,000 in the first day of a$25 ,000 goal because we had done all that prep work. And then we ended up over the course of those 33 days doing$453 ,000 for a$39 journal, becoming the sixth most funded publishing campaign of all time. And we actually did an incredibly long and detailed post called How to Crush Kickstarter. you can just Fire Nation go to eofire.com and then in the search bar just type that in how to crush Kickstarter it's like a 10 ,000 word blog post so definitely check that out and you'll see just the amount of work it goes that goes into doing something right but Devin as you know by the way which we found out is there's something called the flywheel effect I mean once we started having a lot of success it was then that other people started taking notice and I was getting promoted by entrepreneurs just being like look what JLD is doing and then that brought eyeballs and then And Kickstarter was featuring us because we were one of the top campaigns.

7:18And this flywheel effect because of the success. So you have to approach it in the right manner. And we will be talking about this and more when we get back from thanking our sponsors. There's a lot to consider when starting your own business. And protecting your identity and privacy are top concerns. With Northwest Registered Agents, you get more privacy, more guidance, and more freedom to run your business from anywhere in just 10 clicks and 10 minutes. Northwest Registered Agent has been helping businesses launch and grow for nearly 30 years. If you want to build your business while keeping your personal information secure, Northwest is the partner you need.

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9:52Tell us those stories and strategies as to how they achieved such success? One of the keys, it's not universally true, but it is commonly true. There are two companies that have raised the most money through regulated investment crowdfunding. One is a company called Boxable that makes folded homes, right? So they can deliver a stack of homes on one truck. I think they can get six homes. They're small, yeah, but six on one truck, right? So they are factory built homes. And so you can drop one of these in your backyard to create an accessory dwelling unit, or you could use it as a tiny home. But there is a clear angle here of social impact, social benefit.

10:45What is that? That is affordable housing, right? So many people in our country literally don't have a place to live that they can afford. So there's a real social impact there. Another company, the other company that's raised the most money is a company called Aptera. And it's a San Diego-based company. So you probably are familiar with Aptera, given your roots in San Diego. But San Diego is, Aptera is a solar-powered EV. And it's an electric vehicle. It's a three-wheel vehicle, but it's enclosed like a car. And it is amazing because it's super energy efficient because it's extraordinarily aerodynamic.

11:33So it gets way better mileage per kilowatt hour than any other vehicle on the road. And as a result, that means the solar panels are generating a meaningful amount of energy for that hyper efficient car. So you can charge the car 40 miles a day in the sun. So my point is social impact is a really helpful thing in being able to raise money from the crowd. Right. Because you're going to actually expand the audience by being able to connect on that point of doing good. You have a phrase, patient capital is available. What does that mean? Especially for entrepreneurs who are building something that has a social impact.

12:27there is an opportunity to attract capital from people who are not expecting a tenfold return in three to five years. There are people who would say, hmm, I might invest in a revenue based financing loan that would give me three X in 10 years or four X in 10 years. So it's a much more modest amount, but at the same time, a more deliberate, more predictable revenue structure, return structure for the investor. So, yes, there are people out there. I saw one for-profit co-op raise$600 ,000 of debt last year at 3 % interest. 3 % interest. You know, that's no one invested because it was a great return on investment.

13:20They invested because they wanted to support the social mission in a way where they could get their money back patiently. So, yes, there are investors and most of us are that investor when it's the right opportunity. Right. When we see something that really resonates, that connects with us in a meaningful way, we say, you know what? But I would give them some money and I will give them money in the form of a discount on the interest rate or the return I expect on this deal. I will be patient. So, yes, there are patient capital investors. Oftentimes they call themselves impact investors who are interested in supporting you.

14:04And I want to be clear, John, sometimes that applies even to people who don't have an explicit social mission, but who may be in an underserved group, women, minorities. Sometimes, you know, the data is pretty clear. They're not getting the same access to capital that guys who look like you and me are. And so there are some investors who are willing to say, I'll give you a little special attention. So yeah, there are some great opportunities. Patient capital, it exists. Patient capital, Fire Nation. It's out there. Be patient. Go find it. Now, you believe that building an investment portfolio of impact crowdfunding investments works.

14:50Tell us more. I've made dozens of these investments, and it is so fun to be an investor in small businesses. I can invest in the highest tech opportunities. I am an investor in Aptera. I'm excited about that company. I hope and believe that will be a multibillion-dollar company one day making and selling lots of these EVs. I get just jazzed thinking about it. At the same time, I also love to invest in very small businesses. I invested in a little bakery run by a woman who is legally blind and hires only people who are disabled. And she sells only vegan goods. And so her revenue at her little vegan bakery shop is probably on the order of three hundred thousand dollars a year.

15:42It's a tiny business. And if she's successful in growing, it'll maybe grow to five hundred thousand dollars a year. But I love her mission. I love what she's doing. I'm thrilled to support her. And she's paying me back with a very nice interest rate. So yeah, you can build a portfolio that easily matches the returns of the stock market, but have so much more impact, do so much more good in the world. It's really a lot of fun. Devin, we've talked about a lot of great things today. I mean, the reality is we're talking about how to raise capital from the crowd. What is the one thing that you want our listeners, Fire Nation, to walk away with from our conversation today?

16:20I think that the key thing I want people to know is this is relevant to you, right? There is no one listening for whom this isn't relevant because everyone can invest. The code in the United States is that every adult can invest$2 ,500 no matter how little money you have and no matter how little you earn. So everyone can. And the minimum investments on some of these is just$10. And of course, as we started the discussion, I will remind people, everyone can raise some money from the crowd. Many can raise enough to matter. Fire Nation, you're the average of the five people you spend the most time with.

17:03And you've been hanging out with TT and JLD today. So keep up the heat. And for links to everything we talked about, visit eofire.com, type Devin in the search bar and the show notes page will pop right up. Devin, give Fire Nation a call to action. If they want to connect with you, learn more from you, what's your call to action for us today? S4G.biz slash CMS free to get my latest book, Crowdfunding Made Simple. And it's a guide to using AI tools to make your crowdfund offering successful. Devin, thank you for sharing your truth, your knowledge, your value with Fire Nation. For that, we salute you, brother, and we'll catch you on the flip side.

17:44Thanks, John. You're a great man. Hey, Fire Nation, a huge thank you to our sponsors and Devin for sponsoring today's episode. And Fire Nation, successful entrepreneurs are great at three things, productivity, discipline, focus. That's why I created the Mastery Journal so that you can master these three things in 100 days. And we're talking step by step. Visit themasteryjournal.com. I'll catch you there or on the flip side. Is now the time to grow a successful business? Attend the world's highest rated business growth workshop taught personally by Clay Clark and now featuring football star Tim Tebow and President Trump's son, Eric Trump at thrivetimeshow.com slash EO fire.

18:23Again, request life changing tickets today at thrivetimeshow.com slash EO fire.