Ethical investment startup smashes crowdfunding goal as it eyes the UK market
Wednesday, May 8, 2019/
Ethical investment app Goodments is coming to the close of its equity crowdfunding campaign, and having smashed her $100,000 target, co-founder Emily Taylor is now gearing up to enter the UK.
Goodments was founded in 2017 by Taylor and her husband Tom Culver, when they took part in the H2 accelerator.
However, Taylor says things “properly kicked off” in November last year, when the pair secured a batch of funding and launched the product into the market.
The platform allows users to invest based on their environmental, social and ethical values. Investors can select issues they’re passionate about, such as human rights, animal protection or recycling, and veto other industries such as tobacco or mining.
The app then gives them a list of recommended stocks to invest in.
At the time of writing, Goodments’ crowdfunding campaign had raised $173,800, smashing its $100,000 minimum target with two days still to go.
As well as appealing to socially conscious investors, the app is designed to make the process of investing more accessible to everyday people.
The co-founders came up with the idea when Culver was working in banking, and Taylor was working in advertising.
Taylor admits she “found the whole thing quite intimidating”.
When you think of investing you think of “men in suits and a lot of jargon”, she says.
“It’s quite a cold, hard category, that’s all about making money.”
Goodments is designed to turn that on its head, providing a design tailored to user experience.
“We took away a lot of the things that made it feel difficult,” she adds.
This includes prohibitive costs — there are no minimum investments, and trades cost just $3, or there are monthly subscription packages available.
“Accessibility around the whole product has been changed,” Taylor says.
Although she initially thought people would have reservations about investing in companies they had never heard of, Taylor says, users seem to be happy investing in companies that are not household names.
The startup now has about 2,300 active members, and has processed about 5,300 trades, totalling investments of $3.5 million.
The average age of investors is 29, and 39% are students, which Taylor says shows the changing values of millenials.
This is a demographic that demands cheap and easy transactions, and complete transparency.
“They’re not going to invest without knowing what they’re investing in,” she adds.
It’s also a group of people who no longer considers property as a viable investment option, and are looking for ways to increase their wealth.
“People are asking the question of ‘where do I put my money?’” Taylor says.
Previously, when it came to stocks and shares, “there wasn’t really the data or the information at an individual level for people to make an educated decision about where to put it”.
“We could see the tide turning”
Goodments has previously completed a small funding round, but going down the crowdfunding route now reflects the community values of the startup.
The whole product is about shared mindsets, and rallying around a cause people believe in.
On the one hand, “it made a lot of sense for us to do it in a way that would get more people onto the platform”, Taylor says.
At the same time, it’s an investment product, and it made sense “to allow them to actually invest in us”.
At the same time, the campaign is getting the startup in front of a lot of people who haven’t heard of it before. Goodments is seeing a surge in new users on the platform.
“It’s a win-win there,” Taylor says.
In the future, the co-founders will consider a mix of equity crowdfunding and VC investment.
They’re planning a Series A round “probably in a year or so”, when they hope to be able to raise a larger amount, “because we will have launched in the UK and revenue figures will be up”.
But, they will always consider including equity crowdfunding in their raises going forward.
“We’ve had a great response from people wanting to own their share.”
The funding will be used to fuel Goodments’ launch in the UK — a market Taylor says is “much more progressive” when it comes to social and environmental investing.
“There’s a much, much bigger market for investment, and that’s a huge opportunity for us,” she says.
Locally, the startup will also be working on a B2B product, helping financial advisors offer more options to their existing client base.
“We could see the tide turning,” Taylor explains.
People want to be more responsible in their investments, but not everyone is ready to do it via an app.
“Some people want to do it in a more traditional method.”
“Hold your ground”
When launching a startup, Taylor advises people to really take the time to speak to people in your target market about the product.
When creating Goodments, the co-founders had a rough idea of what the platform would be, but found that talking people through it meant they could figure out what they were missing.
That feedback, “definitely helped shape the product”, Taylor says.
It’s easy for founders to get caught up in an idea, and just assume they’ve “cracked it”, she adds.
“You want to spend time with people to make sure the product is right for what they’re looking for.”
On the other hand, Taylor notes, as a founder, “you’re going to get advice from everyone on everything”.
A lot of that advice will be opposite.
“Do that research, be clear on what you think your offer to market is, and then hold your ground,” Taylor advises.
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