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Q3 2019 Update: Profitable, 2X Growth, & 44% Market Share

on Sep 10 2019
Founder & CEO @ Wefunder

Dear investors,

Over 2019, we've increased our market share to 44%, grown our investments and revenues over 2X, and have been profitable. We're in a better position to remain the dominant platform when regulatory reform spurs faster growth.

2019 Highlights

  • Profitable.  Since March, we've been profitable and cash flow positive.
  • $4M Revenue Run Rate. We earned $359,445 revenue in August.  Our monthly expenses typically hover around $240,000.  
  • 2X Year-Over-Year Growth.  Our investment volume and revenue have both grown 2X year over year.  If there is no regulatory reform this year, we expect to continue 2X-3X growth into 2020.  If the Senate passes JOBS Act 3.0, we expect to grow faster.  
  • Over $100 million invested from almost 300,000 investors.  We hit $100M in investments in August, and will hit $107M by the end of this week.  We expect to hit 300,000 investor accounts within the month.  
  • $50M pre-money valuation.  We'll soon close a small round that values Wefunder at $50M.  This is about 12X our revenue run rate.  It is also less than half the valuations our main competitors (with lower stats) have raised at or been acquired at. We believe in raising smaller amounts at steadily increasing valuations each year.
  • 44% Market Share in 2019.  There are over 30 funding portals.  We've processed over 44% of dollars invested in Regulation CF offerings, about equal to our top three competitors combined. Our lead is increasing; our market share was 33% in 2018.
  • 12 person team. We've done all this with a team about a third the size of each of our main competitors and a fraction of the funds raised. We do far more with far less. 

Q4 Plan

  • Recruit a product team. Our ops, bizdev, & community teams are rock solid.  However, our product team is short-staffed, which has negative cascading affect on our investor experience.  Over the remainder of the year, we plan to recruit three more engineers and a designer.  
  • Recruit more venture partners.  We've been focused on our mission of spreading the Silicon Valley ethos across the rest of the country.  Our Venture Partners program has shown promising early results, and we plan to double down on it.  
  • Strive to improve on 2X growth and 51%+ market share.  We've focused on a few levers that we think we can pull in Q4 to accelerate our growth.  We want to exceed 50% market share in Q4.

2020 Outlook

Our aim will be process at least $100M in investments over 2020, expanding the size of our moat compared to the rest of our competitors. Thanks to network affects, much like Uber/Lyft or Kickstarter/Indiegogo, we believe only 2 platforms will be left standing.  We intend to remain by far the best choice.  

If regulatory reform happens in 2020, we can grow faster.  We've made it a priority to comment on the SEC's proposed reforms to Regulation Crowdfunding.  We've also stayed in touch with Congress on JOBS Act 3.0 (which passed the House 406-4).  JOBS Act 3.0 enables SPV's, allowing founders to have one entity on the cap table.

Counterintuitively, if there is a recession in 2020, it may well end up being good for us:  it will put capital formation legislation on the top of the agenda in Congress. In 2012, we helped pass the original JOBS Act in an election year with economic uncertainty.