For the folks who want to invest in startups, Quire wants to be the way they get a piece of the action.
Erin Glenn, CEO, demoed Quire at last night’s New York Tech Meetup (see slideshow), and also discussed how her startup’s plans relate to the continuing evolution of regulations on equity crowdfunding. “The mission we have is to democratize investing,” she said.
Previously known as Alphaworks, Quire is a platform that accredited investors can use to find startups to back that have already landed some funding from venture capitalists.
Quire, a Betaworks company, was founded in 2014 and is based in New York’s Meatpacking District. Glenn said her company rebranded in April, which included an emphasis on storytelling about the startups on the website to connect them with the investor community.
The site offers up video and other visual elements as ways to help potential backers, and others who are curious, learn more about such companies, Glenn said. “We want to make sure they understand who the founders are, who the sponsors are, and what the mission is of the business,” she said.
For example, Exposure, one of the startups listed on the site, has a video clip from backer Gary Vaynerchuk, an entrepreneur known for growing his family’s business Wine Library and an early investor in Uber, Facebook, Twitter, Tumblr, and Birchbox. Potential investors who visit Quire gain more than insight from venture capitalists such as Vaynerchuk on why they put money into the listed startups. “Anyone who’s investing in Exposure gets to invest on the exact same deal terms that Gary Vaynerchuk has negotiated for his fund,” Glenn said.
That includes the same dilution rights, investor protections, and pricing, she said.
There are strong hints that Quire wants to work with many more investors than currently allowed under federal regulations. “There are a lot of people who would love to invest in a company, but they don’t make $200,000 a year or have $1 million in net assets, which the U.S. government says is a barrier to being able to invest in private companies,” Glenn said.
The passing of the JOBS Act cleared the way for accredited investors, per rules set by the Securities and Exchange Commission, to back startups. People who do not meet those standards, Glenn said, can still follow the progress of the startups listed on Quire, and offer feedback to them—but she wants to see investing access increased further for the public.
The potential for more people to invest in startups is dangling in the air with Title III of the JOBS Act yet to be finalized by the SEC. That piece of regulation could let people who do not currently qualify as accredited investors (with a net worth of at least $1 million or $200,000 annual salary) back startups through equity crowdfunding—with certain guidelines.
The argument Glenn offered for change is that even with the existing JOBS Act regs, only a small percentage of the population is permitted to participate in this type of wealth creation. “Not helping people understand how to invest and take financial responsibility, I don’t think is good for the direction of this country,” she said.
The obvious counterpoint to this notion though is people who are not savvy to the risks of investing may not realize how fiscally treacherous the waters can be when backing startups.
Glenn said Quire supports the idea of setting appropriate rules to keep people from tossing away money they cannot afford to lose, but made it clear she wants to see more people participate in the investing scene. Naturally, that would mean more potential investors could find startups to back using her site. “Limitations around how much you can invest is a good guardrail,” she said. “But we think right now it’s important to let anyone invest.”