Crowdfunding Success Can Help Kickstart Interest from VC Firms
The nights are the worst for any new parent, but Arturas Vaitaitis doesn’t dwell on the sleeplessness. For him, a soundly sleeping baby was bittersweet.
“I had anxiety issues. I couldn’t sleep. I would wake up in the middle of the night and go up to my son and see if he’s fine,” said Vaitaitis, who lives in North Bergen and works on Wall Street. “I would poke him, which would wake him up, which is a horrible thing to do.”
But out of those experiences came the idea for Monbaby, a high-tech baby monitor encased in a button that Vaitaitis invented and is now trying to turn into a viable business.
His story is featured in a three-minute video on Kickstarter, the crowdfunding site where Vaitaitis, a native of Lithuania, is looking to raise $10,000 in the next 30 or so days.
For him, Kickstarter is more than just a fundraising tool; it’s a proving ground. That’s critical as more and more angel and venture capital groups are looking for proof of concept before they’re willing to invest.
Because as one angel investor told Vaitaitis early on: “Show me a thousand preorders on Kickstarter and the money is yours.”
Crowdfunding is fast becoming a major player in the startup space. The federal Jumpstart Our Business Startups (JOBS) Act has made it easier for entrepreneurs to raise money from the masses, and many, including Vaitaitis, are taking advantage.
Vaitaitis is seeking product crowdfunding, which is popular through sites such as Kickstarter and Indiegogo and gives entrepreneurs money to create a physical product. But there are also equity crowdfunding sites, such as SeedInvest and Wefunder, that allow people to invest in startups, sometimes for as little as $100.
Katherine Kish, executive director of Einstein’s Alley, a nonprofit that supports technology growth in New Jersey, said the impact of crowdfunding is so far more psychological than financial. [more]