Black Female Crowdfunding Executive On Opportunities for Black Founders
Florence Hardy is CEO of truCrowd Illinois, a state-level equity crowdfunding platform allowing Illinois residents to invest in startups. She is also COO of Fundanna-an equity crowdfunding platform for the cannabis industry, and truCrowd’s national equity crowdfunding platform.
(Florence Hardy in a picture from her website, smallbizflo.com)
Hardy is one of the only black, brown, or female executives in the equity crowdfunding arena.
After interviewing black entrepreneurs running equity crowdfunding campaigns, including WhoseYourLandlord and Jetpack, Black Enterprise contributor Brandon Andrews sat down with Florence to get the perspective of an executive in the space. She shares her thoughts on equity crowdfunding and the opportunities for black founders and investors.
Brandon Andrews: You run truCrowd Illinois, a state-level equity crowdfunding platform in Illinois. You are also COO of the national truCrowd platform and COO of Fundanna, an equity crowdfunding platform for the cannabis industry. Let’s talk about truCrowd Illinois first. What opportunity do you see in the state-level approach?
Florence Hardy: I think there is a great opportunity to both support local business and build livable communities by focusing on the state level. It provides an opportunity for small businesses, the ones that have the hardest time finding funding, to get investments from those likely to patronize them: local residents. It puts business owners in a place to create a different narrative about their business and who they serve, while allowing them to focus their marketing and fundraising effort in a concentrated area, saving time and money.
Additionally, state-based laws are more progressive than those at the federal level, allowing business owners to raise more funds while allowing residents an opportunity to invest more per campaign.
For entrepreneurs raising money and investors who want to fund businesses, how is the state-level approach different?
The approach is not that much different. The business still needs to identify likely investors and market to them efficiently and effectively. The key difference is the messaging. The key message at the state level is that investors would be able to own their community, not just live in it. And with ownership comes pride; pride can bring about change in the way people treat their communities and others within it. That is a message that you just can’t make with a federal platform.
Also, it is important to note that most businesses do not have a national target market. The lack of such an audience makes it inefficient for a business owner to target a national audience when trying to fundraise. That said, we do also operate a federal platform for companies that have a national target and we work with business owners to help them decide which platform would work best for them.
What benefits can entrepreneurs/investors expect by using a state-level equity crowdfunding platform instead of a national platform?
The biggest benefit is that most state based programs are more flexible in terms of the amount of funding a business owner can raise and the amount an investor can invest per campaign. Beyond that, working with a state-based platform typically means you are working with a company that is familiar with the local market. The platform should have local relationships that can help provide the right insight and direction to a company that a national platform just does not have the resources to provide. We are really able to help a business owner determine what will and won’t work in our state and that may greatly differ from what will work in other states.
truCrowd also has a national equity fundraising platform. This is a small but increasingly competitive marketplace. As an executive how do you distinguish your platform from competitors?
We are different in the service we provide. We help individuals understand equity crowdfunding. Many platforms just give entrepreneurs a checklist when setting up a campaign. We walk entrepreneurs through the process. We don’t give legal or accounting advice, but we help as much as possible.
On the investor side, we lay out all of the available investment options. We do SAFE (Simple Agreement for Future Equity); equity; debt deals; revenue sharing, etc.
Fundanna is an equity crowdfunding platform for hemp-, cannabis-, and THC-related businesses. What opportunity to do you see in the cannabis industry? Why is a separate platform necessary?
The cannabis industry is a new opportunity and there are tons of people interested in the market. We hope to provide an opportunity for all those interested in a piece of it to do so. Right now, there are over 20 million medical cannabis users in the U.S. and as the list of covered ailments grows that number will only increase; not to mention that many states are looking at their recreational use laws too. With that comes a number of businesses that want to serve this market. Like any other business, they need funds to grow but they cannot go to traditional financing institutions. Banks, credit unions, and event microlenders do not play in the space which leaves angel, venture capital, and crowdfunding to fill the void.
A separate platform is necessary because of the regulations in place for these types of businesses. Additionally, it allows us as a company to build an audience of like-minded investors who understand the varied risk of investing in this industry; those risks differ greatly from those seen in other industries. Lastly, it serves as a safe place for those interested in cannabis to talk about the unique challenges they face and opportunities available with others knowledgeable within the industry.
Are there unique opportunities for black entrepreneurs/investors in the cannabis industry?
I wouldn’t limit it to the cannabis industry. I think there are unique opportunities for black entrepreneurs and investors using crowdfunding in general. However, within the cannabis industry, there may be an opportunity for those who would be left out for reasons of lack of capital or criminal history to still be a part of this growing industry.
You are one of the few black, brown, or female executives involved in operating equity crowdfunding platforms. What unique perspective does your background bring to this work?
Getting past the basic levels of traditional financing has always been a difficult step for minority business owners to get past. While less than 2% of all firms will ever receive VC or angel money, this statistic is even lower for minority-owned firms. However, I think part of that low statistic is that minority entrepreneurs generally do not have experts to look to gain that experience with angel or crowdfunding. I hope that when I speak to audiences about crowdfunding, I make the opportunity seem attainable and turn angel investing and crowdfunding into an opportunity that they can see themselves taking advantage of too.
How do you plan to engage black, brown, and female entrepreneurs and investors with equity crowdfunding opportunities?
We work with business support agencies and municipalities all over the state that provide entrepreneurial education to the business owners they serve. However, I am working to make an extra effort in communities of color as I believe that is where we can have the biggest impact.
We are putting together campaigns and marketing initiatives that will introduce the concept of crowdfunding to minority and female operators and potential investors and provide them with direct opportunities to participate. In one program, we are identifying commercial districts, working with business owners to create investment opportunities and informing and educating nearby residents about these, and all other, crowdfunding opportunities that exist.
Our goal of this concerted focus is to put the power of economic development in the hands of those who live in these communities directly.
As an executive in this space, what trends to you see in the next year? How do you plan to grow truCrowd Illinois and Fundanna?
I think equity crowdfunding will become more mainstream in the next year. As more businesses look to this as a way of funding and introduce this opportunity to their customers, the space will grow and evolve.
Additionally, I think that more traditional financial institutions will begin to look at this space as a way to increase market share and offer products to the generally underserved market of micro business owners and households, which make less than $200,000 a year.