An article we liked from Thought Leader Jonny Price of Wefunder:

The *Community* Round

Too many community rounds are not leveraging, or benefiting from, well... umm... community. We should change that.

In 2022, Wefunder coined the term community round. As far as I’m aware, the term had never existed previously. We launched a website, made a (hilarious — you should watch it) video, got in a playful Twitter tiff with our competitor, and instituted a mandatory Swear Jar policy with steep fines for anyone who uttered the phrase “equity crowdfunding” ever again.

Crowdfunding sounds like Kickstarter. And Equity Crowdfunding sounds like something startups do if they can’t raise capital from professional investors. But a Community Round sounds like something you do if you are as passionate about building community as most founders claim to be, and you think it’s noble to let that community share in the upside.

Vive la Community Round!

But while we coined the term, and made the website, to-date we’ve fallen short of living up to the potential of what a community round could and should be.

So this post articulates (1) Who should run a Community Round, (2) Why they should do it, and (3) How they should go about it.

Ideal Community Profile (Who)

Let’s start at the start. Who is a community round a good fit for? Well I started my career in management consulting, so what better way to illustrate than a 2x2 matrix.

On one axis, we have “has a large and passionate community”. When Mercury or Substack launched their community rounds on Wefunder, they massively over-subscribed their $5M allocations in a few hours. If you’re Replit, you can raise $5M in a day from thousands of your users, because they already know and love you.

But on the other axis, we have “cares passionately about community”. If you want to raise $1M in a day on Wefunder, then sure, you need a huge existing fanbase. But if you’re OK with a slower, smaller raise, then you don’t need it. And you can use a community round to help you build it.

As an example here, Outerly comes to mind. When they launched on Wefunder, they didn’t have a million users. But their founder, Kay, was committed to putting community at the center of everything she did. They raised $61,958 on Wefunder, from 165 investors, and used this money to...

Read the rest of this article at communityroundup.substack.com...

Thanks for this article excerpt to Jonny Price, VP Fundraising at Wefunder.

Photo by Kaboompics.com

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