Ask any entrepreneur to name the hardest part of launching a business, and the answer, inevitably, will be, "money." Some of the greatest startup ideas fizzle for lack of funding.
Nvsted, (pronounced: invested), a hyper-local crowdfunding site, aims to make it easier for St. Louis entrepreneurs to find investors, and vice versa. The St. Louis Economic Development Partnership launched the online platform Wednesday at the Helix Center, a startup accelerator located in the 39 North Plant Science District in Creve Coeur.
“Financing is not one size fits all,” the partnership’s CEO Sheila Sweeney told the crowd gathered for the launch announcement. “We heard the need for more financing options from our small businesses, our entrepreneurs and startups. Nvsted is our innovative response to what we heard from those businesses.”
Sweeney says she got the idea for the nonprofit crowdsourcing marketplace after reading the details of the 2012 Jumpstart Our Business Startups Act. The JOBS Act required the Securities and Exchange Commission to establish rules that would allow eligible startups to raise capital using “Regulation Crowdfunding.” The new rules also opened the door to a wider range of investors. Previously, only accredited investors with a net worth of more than $1 million and annual income of more than $200,000 could participate.
The Nvsted crowdsourcing portal is limited to St. Louis- based businesses looking for capital, but investors can come from anywhere in the country as long as they are U.S. citizens. They can invest as little as $100 in a company that is seeking funding on the site.
“It’s not a donation,” Sweeney cautions when explaining the differences between Nvsted and other crowdsourcing sites like Kickstarter or GoFundMe. “You really are investing. Or you can loan to a company on this portal as well. There is some risk as with any investment, but it allows for these startup companies to be out there and go beyond friends and family to others in the community and outside St. Louis for funding.”
Jeff Stevens, co-founder of WellBeing Brewery, admits that his first and only investor was his father when he launched his non-alcoholic craft beer a year ago. In need of funding for the next phase of his startup, Stevens was the first company to sign up with Nvsted.
“Everyone tells you you’re going to hit this funding gap,” Stevens said. “And when we heard about this St. Louis-centric platform where people in town could invest in your business and have a stake in it, for us, it was a no brainer. To have your customers invested and have a real stake in the success of your business is exciting.”
Nvsted CEO Jamey Edgerton is proud of the fact that every line of code for the crowdfunding site was written in St. Louis by digital designers at Happy Medium. It took more than a year to build and required rigorous oversight and approval by the Financial Industry Regulatory Authority.
“Nvsted is innovative, unique and supports our business community,” Edgerton said. “Nvsted’s launch further strengthens the St. Louis region’s position as one of the top areas to start and grow a business.”
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