Crowdfunding has started to gain traction as a means through which startups can obtain funding directly from the public, but most people don’t immediately think of incubators or accelerators as appealing to investors for backing. Croatian ZIP, which is the country’s first major incubator and which counts Dave McClure and Carlos Eduard Espinal as advisors, wants to change things up and offer anyone the opportunity to back their startups.
In order to raise funds for their pre-acceleration program, the incubator has started a campaign onSeedrs, a UK-based crowdfunding portal where the supporters receive equities in the projects instead of gifts or ‘thank you’ cards for their contributions.
ZIP was founded in 2012 and has thus far provided only mentoring and co-working space to 6 companies, including Greenpie, a cloud-based service for nutrition that received 50K Euro in follow-on funding from the Bulgarian VC/accelerator LAUNCHub, but they are expanding their support. Now, they are soliciting funds in order to provide early-stage investment in their companies to give them a boost before they enter acceleration programs.
The approach is interesting because, as ZIP co-founder Ivo Spigel tells me, a London-based LLP will be created in which the investors will own 70% (with each individual owning a percentage of the company proportional to the amount that he/she initially invested) and the incubator will own 30%. Thus, ordinary people will have an opportunity to back a company that will support a batch of Croatian startups, hopefully helping to spur entrepreneurship in that country. The company will then take between 10-15% equity from each alumni of the ZIP program.
The amount offered to companies participating in the pre-acceleration program will not be a lot, generally 10-15K Euro per company, but ZIP argues that there is a strong need for funding for the teams at this stage. The plan is to invest in 3-5 companies during each generation of ZIP’s program in the first 3 months of the program, spend the next 3 months launching the service, and then to send them off to major accelerators in the US or EU.