Wefunder Prez Speaks on Recession Fears

Next week I’m dropping an investment review on a really exciting company.

If you can guess the company, I’ll send ya something. Here are some hints….

• Made in the USA

• 300%+ revenue growth since 2021

• 100+ employees

• Raising on either Wefunder or StartEngine

Hit reply and send me your best guess!

I TALKED TO THE PRESIDENT…

…of Wefunder, Jonny Price!

For those unfamiliar with Jonny, he’s a 7-year vet of the crowdfunding industry and now #2 in command over at Wefunder.

The industry wouldn’t be where it is today without him, he’s played a key role in signing heavyweights like Substack, Replit, Mercury, and Beehiiv to crowdfunding campaigns.

These ‘blue-chip’ startups introduced crowdfunding to thousands of first-time investors, and lended heaps of credibility to the space.

What you don’t know about Jonny Price, is that he works for me.

That’s right, across my investments I’ve sent $250+ in Wefunder fees into the company coffers that pay his salary.

Alright he doesn’t actually work for me, but Jonny was nice enough to answer some questions I had about the crowdfunding space, starting with this one:

Any insight you can give into investor sentiment so far in 2025?

‘It's pretty surprising, but so far we have seen no negative impact on investment volume from the macro economic wobbles. I had always hoped that Wefunder and Reg CF would be counter-cyclical.

The theory was that on the founder side, a slowdown in VC funding would lead to more startups looking to their customers and community to raise capital… And on the investor side, a more rocky stock market would lead to investors seeking alternative investment opportunities (e.g. on Wefunder).

But in 2022, we actually found the opposite — Wefunder and Reg CF were cyclical, correlated with (e.g.) the stock market.

There were probably some of the two effects listed above, but I think they were trumped (no pun intended) by a couple of other factors.

On the supply side, founders realized that it was a bad time to raise, and so many more startups focused on getting to profitability, and raising less outside capital — from whatever source. And on the demand side, investors felt a little less wealthy, and were more conservative / risk-averse with their investing decisions.

If we head into a recession in the coming months (seems likely), I would expect some slowdown in Reg CF investment volume.

Although I do think Wefunder will be a little more resilient than some of our competitors — because our business is primarily built around companies raising capital from their customers and community, vs. paid ad spend. And I would expect a startup's customers and community to be more resilient in a downturn, vs. people they serve Facebook ads to.’

How did Wefunder raise money?

‘Wefunder has raised money almost exclusively on our own platform! We've raised about $25 million in capital down the years, from 8,796 investors through a combination of Regulation D and Regulation Crowdfunding (Reg CF). Eating our own dog food, as they say!

One really cool data point — these investors in Wefunder are much more active than the average Wefunder investor.

The average investor on the platform has invested around $2,600. But for investors that invested in Wefunder ourselves, that number goes up to $10,400. I see this as pretty compelling evidence to support our claim that if startups let their customers invest, those customers will be more loyal to them, and spend more money with them.’

(note, I am an investor in Wefunder and have invested $12,500 in total on the platform so this checks out in my sample size of 1!)

Now that Wefunder is profitable, how do you think about utilizing excess cash?

‘More train trips!!! No, not really :) We just want to invest it back into growth.

Wefunder is a product company, and so for us that primarily means more engineers, designers, etc. We have a product roadmap longer than the CROWDSCALE subscriber list, so watch this space!

One of the themes of our product roadmap that I'm particularly excited about is more features around "community". For example, we recently rolled out "investor directories" — where a startup's investors can list what they can help the founders with.

We're seeing more and more examples of startups benefiting from the army of investors that they recruit through their community round, and we want to encourage that more and more, and build product functionality to support it.’

What is the Equity Crowdfunding / Community Round capital of the world?

‘As with startups more broadly, San Francisco is the capital of the Community Rounds world. Startups like Mercury, Replit, Substack, and Wefunder ourselves put SF at the top of the list.

But just as with conventional VC dollars, New York is in the hunt — Levels and Beehiiv are two great Wefunder examples in the Big Apple.

Although one thing that's encouraging to me is that the "dominance" of California, New York and Massachusetts in conventional VC funding is reduced in Reg CF.

These three states account for 77% of conventional VC dollars per the last stats I saw (and that might be even higher now with the current AI bubble). Whereas they only account for 48% of Reg CF dollars raised to-date. 

And startups have run Reg CF fundraising rounds in every single state. I think this is a good example of the aims of the 2012 JOBS Act — to facilitate startup capital formation, even for startups outside of traditional startup hubs — being realized.’