New regulations allow companies to crowdfund up to $5M: - **The US SEC regulations took effect on March 15,** and several companies have already taken advantage of the higher threshold. This change in the crowdfunding landscape means more access to c
New regulations allow companies to crowdfund up to $5M:
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The US SEC regulations took effect on March 15, and several companies have already taken advantage of the higher threshold. This change in the crowdfunding landscape means more access to capital for founders, increased diversity in the market, and new avenues for small businesses.
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A large chunk of e-commerce founders are not tapping into global SEO, according to a new report. If you're focused on English-speaking countries only, you're missing out: Translating your SEO can translate to growth.
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This founder's course pre-launch earned over half a million dollars in a week. Although building his own course platform doubled development time, it paid off big-time by positioning his product as something unique and special in the market.
Want to share your ideas with nearly 70K indie hackers? Submit a section for us to include in a future newsletter. —Channing
💰 Crowdfunding's Evolving Landscape Increases Accessibility for Founders
from the Indie Economy newsletter by Bobby Burch
US companies can now raise up to $5M per year from unaccredited investors, a nearly fivefold bump from the previous $1.07M limit.
Crowdfunding is changing
Why it’s important: New Securities and Exchange Commission (SEC) regulations took effect on March 15, and allow early-stage firms to use crowdfunding as a means to raise meaningful growth capital. More later-stage firms will also likely try crowdfunding, as the former threshold kept many on the sidelines. After all, when raising millions for IPO unicorns, $1.07M doesn't even get these folks out of bed.
Investors react: TinySeed general partner Rob Walling told Indie Hackers that the option to raise more than $1M means more companies will be open to crowdfunding than ever before.
Rob, whose firm just raised $25M to invest in 100+ companies, said that while funding doesn’t guarantee success, it helps companies survive until they can become sustainable:
Anything that allows more people to diversify their investments by making small bets on startups and provides more funding for early-stage companies is a good thing in my book.
The pitfalls: Rob acknowledges that at some point there will likely be an “epic failure," such as a crowdfunding con artist or a company failing to deliver, and the media will be keen to amplify that example.
He’s also concerned that founders' time may be strained by demands from the hundreds of new investors they gained through crowdfunding:
As a founder, having 1K investors, even if they are a single line-item on your cap table, is going to be a challenge for many... some price-sensitive investors may want a lot of reassurance their investment will make money, or demand more updates and information than a founder would usually be asked to provide.
[That's] people who could be sending you Twitter DMs asking why your revenue is not growing quickly enough.
Funding diversity
John Fein, managing partner of Firebrand Ventures, told Indie Hackers that he thinks the new funding threshold will be a broad boost for startup investors, startups, and funds:
Overall they seem to have a net benefit in terms of making it easier for startups and funds to raise capital and enabling more non-accredited folks to invest in startups and funds.
John also hopes that the new rules will inspire increased investing in diverse founders. About 77% of VC dollars went to companies with a white male founder. Also, about 70% of startups that raise venture capital have a white male cofounder who went to Stanford and/or Harvard.
Democratizing early-stage investing: Brian Belley, founder of research site Crowdwise, told Axios that the higher threshold will undoubtedly draw more startups to crowdfunding and create more startup investors:
When more companies do this, they're bringing their audience and customers, which brings in a whole bunch of new investors in the market.
Capitalizing quickly
Rapid returns: Several companies, including Backstage Capital, the NYC Opportunity Fund, biotech firm Cytonics, and several others have already surpassed the previous crowdfunding threshold. A few have already hit the new limitation, including Gumroad, which hit its $5M fundraising goal in less than 24 hours.
Additional impacts: Republic, a crowdfunding platform for early-stage ventures, sees the $5M limitation as a game-changer for startups that couldn’t scale the same with a $1.07M round:
The increase to $5M is large enough to allow a startup to raise a full Series A funding round, to provide all the equity required for a sizable real estate development project, or to buy a museum-quality piece of art. In our estimation, these changes will increase the total addressable universe of companies from billions to trillions in total value, creating an enormous opportunity for the platforms poised to facilitate this investment.
Even the stodgy SEC shared its enthusiasm for the regulatory shift, calling the move a win for small businesses looking to raise capital quickly and more accessibly.
The road ahead: About a thousand US companies raised a total of $215M from equity crowdfunding in 2020. While it’s a tiny fraction of the $156B venture capitalists poured into US companies in 2020, the amended regulations will likely help set a record for equity crowdfunding in 2021.
Are you planning to crowdfund your company this year? Will crowdfunding rules shake up the modern fundraising process?
Discuss this story, or subscribe to Indie Economy for more.
📰 In the News
from the Volv newsletter by Priyanka Vazirani
👶 Facebook will launch Instagram for kids for users under 13 years of age.
👂 Twitter wants your input on whether world leaders should be subject to the same rules as others on its platform.
💼 Robinhood is hiring a ton of new staff to boost its crypto department.
📹 YouTube Shorts launches in the US to take on TikTok.
🎵 This AI-written track reimagines Eminem as a 2021 feminist. The rapper was not involved in the making of the track.
Check out Volv for more 9-second news digests.
🌎 Global SEO Could Bring Your Biggest Boost
from the User Acquisition Channels newsletter by Darko G.
A top research firm released its Global SEO Report this week and shared that AWR Cloud, and a host of other key players, are set to release new products across the globe for SEO optimization. This is a key space for founders to watch in 2021.
International SEO is great for SaaS founders
The no-background: An expert marketer recently wrote an article on how SEO outside of English-speaking countries is an untapped opportunity for e-commerce brands. According to my analysis, the same is true for SaaS founders.
An example: Amplifr is a social media scheduling tool hitting $16K MRR. It targeted two markets, Russia and the US. Here are a few of the findings:
Two different language markets perform very differently, so we've had three markets to test: Russian, Europe (less saturated English), and the US. Europe is much cheaper in terms of marketing than the US, which in our niche is pretty crowded.
Russian/European version:
- Trial-to-paying conversion is about 3% over all the acquisition channels. Adwords search ads and network ads work great; we get a sign up for $1.
- Our blog has about 28K sessions monthly. Each article converts to a signup at about 2%.
- The newsletter has about 20K people with a 3% click rate. Conversions are okay-ish.
Quora ads cost us $3-4 for a signup.
US version:
- Trial-to-paying is about 5% with much less work done to improve it. A ton of things we can still do to bump this.
- Adwords: $5 per signup.
- Blog (135 people) and newsletter (1.5K people) are both pretty nonexistent.
- Quora ads: $8 per signup.
- Guest posting: much more potential than in Russia.
Notice how some channels (like Quora and AdWords) are up to five times cheaper for Russia/Europe than the US.
The opportunity: SaaS, unlike books, doesn't take much effort to translate. It's even easier to do it than an e-commerce site: With e-commerce, you need to translate product descriptions for hundreds of products. In SaaS, you have mainly the user interface and the landing page.
In targeting Germany, UAE, and France, and Belgium, the marketer was able to significantly increase his SEO traffic from those countries. Read the article for more details on getting started by doing international keyword research, whether to use subdomains vs. subfolders, etc.
Check out this week's other two acquisition channel opportunities in the full post here.
Discuss this story, or subscribe to User Acquisition Channels for more.
🌐 Best Around the Web: Links Posted to Indie Hackers This Week
💵 How to get your first $100 MRR. Posted by Poh Jie.
🌠 Top creator economy moves of the week. Posted by Eliot Couvat.
💪 How Morning Brew went from a PDF attachment to $75M in five years. Posted by Leo Nagano.
📝 Why Facebook is getting into the newsletter game. Posted by Ryan Randall.
🤫 Corporate journalists are demanding that Substack censor its writers. Posted by Channing Allen.
📈 3 keys to scaling operations in a fast-growing business. Posted by John Saddington.
Want a shout-out in next week's Best Around the Web? Submit a link post on Indie Hackers whenever you come across an article you think other indie hackers will enjoy.
💻 Founder Josh Comeau Made >$500K in A Week Through Pre-sales
By Josh Comeau
Last week, I pre-launched my very first course, CSS for JavaScript Developers. I just closed down preorders, and I'm thrilled to report that the course has made over half a million dollars:
The backstory
CSS for JavaScript Developers is a course aimed to help intermediate JavaScript framework developers (React, Vue, Angular) solidify their CSS skills.
It's a work-in-progress: This was an early access launch, meaning that folks who purchased are able to access the content, but only about 50% of the course is completed. I hope to launch the course in full by September of this year.
I started working on this course in August 2020 after a stress injury caused me to leave my job. For the past 7-8 months, I've been working full-time on my course and my blog.
The course is a bit hard to describe. It's not a video course, though it's on track to have >100 videos. It uses five different media types:
- Interactive articles
- Videos
- Exercises (short challenges in-browser)
- Workshops (larger real-world projects)
- Mini games
I built my own course platform to support the program. This decision easily doubled the development time, but it allowed me to create something truly special and unique compared to other courses on the market.
The launch
I decided to keep registration open for one week. This wasn't a marketing tactic (though I did learn about scarcity and how it could be useful); it was because I want to focus the bulk of my attention on finishing the course, and onboarding new students every day would make that more challenging.
The course launched at $129 + tax (USD). This is a special early access price: I plan to sell the full course for $349, though I'll also be supporting purchasing power parity (region-based pricing) and tiers (starting, likely, from $129).
I launched on Twitter (31K followers) and to my email lists (~28K subscribers). For what it's worth, both of these numbers have grown quite a lot over the past year. In January 2020, I had ~10K followers and ~1K email subscribers. I also spent a few months in 2020 unable to work because of an injury. Happy to talk more about this process!
I had hoped to sell about 380 copies for ~$50K. That number would have been validating, and an encouraging sign that I wasn't being dumb by quitting my job (Staff Software Engineer at Gatsby Inc., earning $165K a year). I'm still trying to process the fact that I hit 10x my goal!
The launch was chaotic and stressful. I built my own platform, and it had bugs. The first 48 hours were spent bouncing between fixing bugs and trying (unsuccessfully) to keep up with support requests. I feel awful knowing that many people paid for the course, but weren't able to access it for 24H+. I'm still dealing with a couple curious issues, but overall I know my platform is way more robust than it was.
I've learned so much over this past week, and would be happy to share whatever I can to be helpful!
Ask any questions you'd like about the launch, the numbers, etc., in the comments!
Discuss this story.
🐦 The Tweetmaster's Pick
by Tweetmaster Flex
I post the tweets indie hackers share the most. Here's today's pick:
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Special thanks to Jay Avery for editing this issue, to Nathalie Zwimpfer for the illustrations, and to Bobby Burch, Priyanka Vazirani, Darko G., and Josh Comeau for contributing posts. —Channing
