Tucson nonprofit Community Investment Corporation recently announced it has teamed up with Startup Tucson and San Francisco-based crowdfunding platform Wefunder to bring equity crowdfunding and startup support to the southern Arizona city.
In partnership with CIC, Wefunder’s website will provide opportunities for companies that might not be ready for typical venture capital or angel investments. According to CIC, funding rounds are not limited to smaller amounts but are generally lower than typical equity fundraising.
“We want to ensure that Tucson entrepreneurs have access to the capital they need,” said Danny Knee, executive director of CIC. “Partnering with one of the most mature and visible crowdfunding platforms like Wefunder is a great way to expand access.”
Gov. Doug Ducey signed a bill in 2015 to allow small businesses and entrepreneurs in Arizona to raise money from the general public through equity crowdfunding.
House Bill 2591 allows companies to raise up to $2.5 million and non-accredited investors to give up to $10,000 each.
“We’re in favor [of this law] because there is a need for more refined instruments on how people can raise capital,” Mitzi Montoya, vice president and dean of entrepreneurship and innovation at Arizona State University, said in 2015. “Crowdfunding is an excellent concept to leverage that social network for investments.”
According to Montoya, equity crowdfunding empowers small businesses and entrepreneurs with wider access to capital, providing more funding options than just banks, family and friends, and angel investors.
HB 2591 has paved the way for the new partnership between CIC, Startup Tucson and Wefunder.
The alliance came just in time for Tucson’s TENWEST Impact Festival, an annual week-long festival that gathers “forward-thinking minds” to collaborate on solutions for creating social, environmental and economic impacts.
TENWEST, which took place from Oct. 11 to 20 this year, first started in 2015 as Arizona’s version of the popular South by Southwest festival in Austin, Texas.
Knee also credited TENWEST leadership at Startup Tucson, including executive director Liz Pocock and programs and events director Dre Voekel, with helping seal the deal with Wefunder.
Startup Tucson is a nonprofit organization that supports economic development in the Tucson region by providing current and aspiring entrepreneurs with education, networking, mentoring and a free membership program to help them grow their businesses.
Wefunder was founded in 2011 but has recently become more involved in local community fundraising, according to CIC.
“CIC caught wind of this interest and began conversations with Wefunder in late spring of this year,” the company said in a statement.
What caught Knee’s attention were the values Wefunder’s executives expressed and their rationale for expansion to smaller cities like Tucson, according to the statement.
Wefunder has funded 307 startups with $108.5 million and venture capitalists have invested over $2 billion more in Wefunder’s portfolio of successfully funded businesses.
“It was not a profit play for Wefunder,” Knee said. “They are truly all about the democratization of capital and investing. They are about increasing access to the economy just like CIC is.”
Businesses that want to seek funding through the new partnership can visit CIC’s website.