How Equity Crowdfunding Increases Options For Underrepresented Tech Entrepreneurs
Darell Austin Jr.’s life as an entrepreneur began in 2013 after he went through his third and final layoff within a short period.
A business analyst at a Wall Street firm, Austin was tired of having to depend on someone else’s company to sustain the necessities of life.
So he co-founded Bluurp, a social networking app targeting folks with multiple social profiles. Bluurp lets users share to various social platforms with the push of a button. Users can post messages on Facebook, Twitter, Tumblr, and LinkedIn, and share videos from YouTube, songs from Spotify, and photos across Instagram, Pinterest, and Flickr.
“This last layoff provided me with insight into the vicious cycle of unemployment,” Austin, 36, told Moguldom. “I really wanted the ability to design the type of life that I desired without the restrictions that working for someone else creates. This was my trigger to be a co-founder of Bluurp.”
Austin said he hopes that Bluurp is going to change the way information is shared on the web. He said he thinks Bluurp will be disruptive in the sharing space, and will also provide easy ways of discovering great content.
Bluurp’s main competitors are social media management services like Hootsuite and Buffer. Bluurp has an advantage over them because they focus on consumers, who, unlike businesses, use more than one social network. “Another advantage,” he said, “is that our competitors are more of a utility while Bluurp is a social network of its own that allows users to discover new content.”
Austin and Bluurp Co-Founder Kevin Rivers are a few years into the journey of turning their entrepreneurial dreams into reality. It hasn’t been easy.
The biggest challenge was getting access to a quality network in the San Francisco Bay Area startup community.
“I did not go to Stanford Graduate School of Business or Harvard Business School, and I didn’t know anyone that had a million-dollar exit, so I could not tap into a very large network,” Austin said.
But he was diligent in networking and relationship-building. Confident in his communication skills, he attended hundreds of events and just started introducing himself to people. Over time, his efforts began to pay off.
“Between networking and pitching at startup pitch nights, people started to notice me,” Austin said. “I was getting connected to people who were connected to folks like Tristan Walker (founder and CEO of Walker & Company, the startup behind the Bevel blade) and Jack Dorsey (a co-founder and CEO of Twitter).
This was no easy feat. “It took a ton of confidence and perseverance to develop and maintain a quality network,” Austin said.
Four years ago, Austin was a senior business analyst for a Wall Street firm, but he had no roadmap for his next career steps. On a routine call with a long-time mentor, he was encouraged to move to the Bay Area to see what it was all about.
“My mentor said, ‘Austin, you have that hustle, heart, and entrepreneurial spirit, and you need to figure out your angle to create an entrepreneurial opportunity for yourself.’”
Enlightened and invigorated by his trip to the Bay Area, Austin said he found the entrepreneurial ecosystem he’d been craving.
Soon after moving to the Bay Area, Austin met Bluurp co-founder Kevin Rivers at a Silicon Valley conference.
Getting access to capital has been a challenge. Bluurp has relied on equity crowdfunding and offline investors to develop its iOS app — an operating system used for mobile devices manufactured by Apple Inc.
Equity crowdfunding is a new model to raise capital that gives investors equity ownership in a company.
Bluurp used DreamFunded, a venture which pairs people looking to invest in a company with founders seeking funds. It is a members-only crowdfunding platform whose team screens and vets all startups. Members, in turn, can select from the startups they wish to invest in — often, for as little as $10.
“It’s great to have a life-changing idea, but that’s not enough to get funding,” Austin told Moguldom.
Austin said he’s a big fan of equity crowdfunding because it makes funding more attainable for underrepresented folks within the tech ecosystem.
“There are not many options that give underrepresented people in tech a fair shot at funding,” Austin said. “Equity crowdfunding levels the playing field.”
Non-accredited investors or people with a net worth or annual income of less than $100,000 can invest in startups using equity crowdfunding. They can invest $2,000 or 5 percent of their annual income or net worth — whichever is less.
Bluurp raised $100,000 in January 2015––primarily through equity crowdfunding–– to launch its desktop version in early 2016. It has about 2,000 users. They have since pivoted to focus on mobile users.
“Our beta users provided feedback that our app would be better if we offered a mobile component,” Austin said. “Since the pivot, we’ve raised $10,000 from equity crowdfunding and private investors.”
The partners are using the funds to develop the Bluurp mobile app for iOS.
In addition to equity crowdfunding, Austin put a lot of focus on personal development to sustain himself on his entrepreneurial journey.
“Being a person underrepresented in tech does put me at a deficit,” Austin told Moguldom. “It’s important to constantly reinvent yourself to stay relevant and always stand out. Connecting with people three times smarter than me helps stretch my imagination so I can stay alive to fight for my dreams.”
The major takeaway from his tech startup venture, Austin said, “is to always believe in yourself and not to underestimate your capabilities, even if they’re unknown. You don’t need to have a finished product to start your startup. It’s just important to get started.”