Buoyed by Original Wefunder Seed Round, Minds Raises $6M Series A
Series A funding is about more than just money. It has to be. For a company at this particular growth stage, the challenge is about partnering with the right kind of financer, one who aligns with the startups' existing values and philosophies. Align with the wrong funding partner here and risk the potential of a future Series B, or worse, lose control of the mission and vision that started the company in the first place.
That’s why Minds CEO Bill Ottman is so excited about the company’s next financing round. A little more than a year after raising $1.03M on Wefunder at a $15M valuation, Minds announced a $6M Series A round at a $30M post-valuation from Medici Ventures on Monday. It's not just that the wholly-owned subsidiary of Overstock.com’s goal is to change the world by advancing blockchain technology, but also that Patrick Byrne, the CEO of Overstock and an active player in the crypto market, is joining Minds' board of directors.
For an open source and decentralized social network where users earn crypto tokens for their contributions to the network, it couldn’t be a better fit.
“Luckily with Medici and Patrick, we really have aligned in terms of philosophy and have a common vision of where the internet is moving,” Ottman said in a phone interview. “And that's really the key. They really care about freedom of expression, privacy, and all the kinds of things that we're working towards.”
The Series A round is coming at the right time. Since raising the $1.03M from more than 1,500 Wefunder investors in June 2017 – one of the fastest-ever $1M raises in Regulation Crowdfunding history – Minds’ user base has grown from 50k active users to 200k. Sales have increased 98% year over year. And the platform’s largest competitor, Facebook, has been besieged with privacy scandals, highlighting the potential of a decentralized social network.
As a result, Minds' plan for the capital influx is to fully build out their product teams, starting with engineering resources, and invest in widespread marketing, including viral growth hacking to connect with more influencers and YouTubers.
In practice, this means being able to devote resources to the product Ottman, his team, and hundreds of thousands of users have been streamlining and working out the kinks of over the past 3 years of business. And for Minds, no users have been more helpful than its early Wefunder investors.
“They’re highly knowledgeable about our products and very passionate about our principles,” Ottman said of those investors. “They're the ones in the group chats helping us find the bugs or what to fix and change. It's a very dynamic synergy going on with the community and they are just another level. They're not just investors. And I think that is priceless.”
Partnering with the right kind of financer is why Minds raised on Wefunder in the first place. The users who became investors transformed into the biggest drivers of the company. More than just early adopters, these original investors are the early heart and soul, and they get it in a way that no other VC could. As the company continues to grow, continues to wrap up more financing rounds, continues to push the limits of decentralized social media, having these ambassadors committed and active is one of the greatest advantages Minds could have.
“I think the community acts as a force to keep us on mission and not let anything come between that,” Ottman said. “Because I think a lot of companies, if they go with traditional VC from the beginning, they come in and take control. And we haven't given up control. Our original community is always going be there, so it's never in the interest of the management or investors to ever be out of sync with the original investor community.”