'Keep the American Dream Alive': Equity Crowdfunding Is Surging From an Appeal to Patriotism and Altruism

Ben Bergman

Ben Bergman is the newsroom's senior finance reporter. Previously he was a senior business reporter and host at KPCC, a senior producer at Gimlet Media, a producer at NPR's Morning Edition, and produced two investigative documentaries for KCET. He has been a frequent on-air contributor to business coverage on NPR and Marketplace and has written for The New York Times and Columbia Journalism Review. Ben was a 2017-2018 Knight-Bagehot Fellow in Economic and Business Journalism at Columbia Business School. In his free time, he enjoys skiing, playing poker, and cheering on The Seattle Seahawks.

'Keep the American Dream Alive': Equity Crowdfunding Is Surging From an Appeal to Patriotism and Altruism

When Christine Outram, founder and CEO of Everydae, a digital tutoring app, met with investors last year to try to raise a seed round she kept being told to come back in six months.

"I guess you can say we were turned down," she said.

Outram decided to try a different route, turning to equity crowdfunding, which allows mom and pop investors to dabble in something that until recently was solely the domain of professional investors. Her campaign proved successful – she raised $1.2 million from 1,586 people who wrote checks between $250 and $50,000.


"I've been really pleasantly surprised by the whole process," said Outram.

For reasons no one can quite explain, equity crowdfunding is having its moment during the coronavirus pandemic. Wefunder, the largest funding portal, recently had its best three months in the company's four-year history, with investor volume up 35% February through April. In early May, the site recorded $2 million of investment in a single day, a new record.

Wefunder had its best three months in the company's four-year history, with investor volume up 35%.assets.rebelmouse.io

"I have been so confused," said Nick Tommarello, co-founder and CEO of Wefunder. "I don't know the answer. The big question for us was always how we would respond to a recession. You would assume that people would not want to invest."

Tommarello theorizes that more startups are turning to platforms like his as other sources of capital dry up, attracting casual investors who don't mind parting with what usually amounts to no more than the cost of an expensive meal to take a lark on a company. The median investment is $200 and 80% are less than $500.

"Our users aren't rich but they're middle class," said Tommarello. "People are not allocating it as an investment, but as discretionary income. They say they can go out for dinner or back someone and support them."

Brian Citizen, who lives outside Washington D.C., has invested in about a dozen startups through Wefunder usually at $250 a piece, including Everydae.

"It's become a passion of mine and something I really believe in and it's also fun because I get to help out entrepreneurs and be a part of the building process," said Citizen, who adds that COVID-19 has made him more excited to invest. "I think there's an opportunity to get better deals. The terms are going to be better for investors."

There is an oft repeated statistic that 90% of startups fail. Even professional VCs who have been at it for decades expect most of their portfolio to be a bust, so experts are wary about casual investors trying their luck in such a risky asset class.

"Some analysts even project that equity crowdfunding could surpass VC investments in the not-too-distant future," Waverly Deutsch, clinical professor of entrepreneurship at The University of Chicago Booth School of Business, wrote in a post warning investors. "This may be exciting news for entrepreneurs, and perhaps for people eager to help start-up founders that they know—but will likely lead to a start-up bubble and massive losses for the majority of individual investors."

Citizen says he is well aware of the risks and limits his total crowdfunding investments to about $2,000 a year. "I'm only willing to invest what I'm willing to lose," he said. "But the returns have the opportunity to be great."

Wefunder is upfront with users about the risks and avoids any impression that users will strike it rich, according to Tommarello.

"Our marketing is very blunt that you might lose all your money and most startups will fail," he said. "We say that over and over again. We don't even talk about our investment returns."

Instead of returns, the site tries to appeal to a blend of users' patriotism and altruism with a hopeful message on the homepage: "Keep the American Dream alive. Back founders solving the problems you care about and help their startups grow."

Equity crowdfunding was made possible by the SEC allowing anyone to invest in private companies in 2016, a privilege previously only accorded to "accredited investors" who made more than $200,000 per year or had investable assets of $1 million or more. A further loosening of the rules went into effect this year, which Tommarello says is likely contributing to the platform's popularity.

"A lot of the downsides have been taken away," he said. "The biggest crowdfunders previously needed to have thousands of direct shareholders on their cap table."

The SEC announced in May it would temporarily make it easier for companies affected by COVID to qualify. "In the current environment, many established small businesses are facing challenges accessing urgently needed capital in a timely and cost-effective manner," SEC Chairman Jay Clayton said in a statement.

Wefunder has backed 382 startups with $135 million, an amount smaller than many individual venture capital funds. Crowdfunding is still a niche, but it is gaining more widespread acceptance.

"I do think VCs are opening up to it more," said Kevin Morris, Chief Financial Officer at Wavemaker Labs, an early stage firm with offices in Santa Monica and Singapore. "Crowdfunding has been a bit of a bright spot in this economy so I think it would only help them."

Christine Outram, founder and CEO of Everydae, a digital tutoring platform.

Wavemaker invests in the pre-seed and seed rounds of companies and then raises follow-up capital via equity crowdfunding, a strategy that has worked well with Miso Robotics, a robotic kitchen assistant and Graze, which makes a roomba-type device that mows lawns.

"Both of these businesses were always well suited for crowdfunding but what we've seen in COVID is businesses in the automation space are doing even better," said Morris. "With crowdfunding in general you can get slightly higher valuations than you would from a VC and in a business that is consumer facing you're not only getting capital but you're building brand ambassadors."

Marketing her virtual tutoring app has been one of the most appealing parts of equity crowdfunding for Everydae's Outram, but she says attracting investors took considerable effort. Most campaigns, including hers, see a spike at the beginning but trail off after the initial excitement.

"My job was to always have new news to draw eyeballs to the page," she said.

Outram posted a steady stream of content to her Wefunder page and appealed directly to podcasts and groups centered around education and investing. She also bought ads on Instagram and Facebook, which proved to be worthwhile when a Facebook ad led to a $150,000 commitment.

"What a lot of founders don't realize Is that equity crowdfunding is as much work as other kinds of fundraising," she said.

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The New Face of Live Shopping: Whatnot’s $5B Journey

🔦 Spotlight

Hello Los Angeles,

This week has been a challenging one for many in our city as we continue to face the aftermath of the recent wildfires. Recovery efforts are in full swing, and as always, the strength and resilience of our community shine through.

If you or someone you know has been impacted, there are resources available to help navigate this difficult time:

  • Pacific Palisades Fire Damage Maps: View here

These tools can provide support, whether you’re looking for financial assistance, housing resources, or updates on affected areas.

While our community focuses on recovery, we’re also reminded of what makes LA unique: its unrelenting drive to build, create, and innovate. A great example this week comes from Whatnot, the live shopping platform co-founded in 2019 by Grant LaFontaine and Logan Head, which has just achieved a major milestone.

Whatnot announced it raised $265 million in Series E funding, valuing the company at an impressive $5 billion.

For those unfamiliar, Whatnot combines shopping and entertainment through live-streamed auctions. Think of it as a vibrant, interactive marketplace where sellers showcase everything from trading cards and collectibles to fashion items, all in real time. Buyers can bid during the stream, creating a sense of excitement and connection that feels more personal than traditional online shopping.

The company’s new funding—co-led by Greycroft, DST Global, and Avra Capital—will drive expansion into markets like Australia and bring improvements to seller tools, from inventory management to advanced analytics. But what stands out most is Whatnot’s focus on its people. CEO Grant LaFontaine announced plans to buy back $72 million in shares for long-term employees, a move that underscores the company’s dedication to sharing its success.

As we move forward, let’s celebrate stories like these that show how innovation thrives in LA—even amid challenges. Whether it’s supporting wildfire recovery, building the next great startup, or simply connecting with others, we each play a role in shaping the spirit of our city.


🤝 Venture Deals

LA Companies

  • Phase Four, a leader in advanced in-space propulsion systems, announced the first close of its Series C funding round, securing nearly 60% of the target raise, led by Artemis Group Capital, to ramp up production of its Valkyrie Hall Effect Thrusters to at least 250 units annually and develop cutting-edge propulsion technologies for defense and national security needs. - learn more
  • Proper, a next-generation supplement brand launched by fitness entrepreneur Amanda Kloots, secured investment from Ben Bennett's Beauty Accelerator, The Center, to redefine the supplement industry with innovative, nutrient-focused wellness solutions tailored for modern lifestyles. - learn more
LA Venture Funds
  • Sound Ventures participated in a $17M funding round for Reshop, a platform simplifying the returns process for consumers and merchants, with plans to use the funds to enhance their technology and expand their services. - learn more
  • LFX Venture Partners participated in a $30M strategic funding round for Shippeo, a Paris-based company specializing in real-time multimodal supply chain transportation visibility; the funds will support Shippeo's global expansion, particularly across North America and the Asia-Pacific region. - learn more
  • Amboy Street Ventures participated in a $15M Series A+ funding round for Granata Bio, a biotechnology company focused on developing advanced gene therapies; the proceeds will be used to accelerate the development of their pipeline and expand their research capabilities. - learn more
  • BAM Ventures participated in a $700,000 seed funding round for MX Locker, an online marketplace for buying and selling motocross gear and parts; the company plans to use the proceeds to enhance its platform and expand its user base. - learn more
  • Crosscut Ventures participated in a $7.15M seed funding round for SoloPulse, an Atlanta-based company developing advanced radar technology; the funds will be used to enhance their product development and expand market reach. - learn more
  • Starburst Ventures participated in Loft Orbital’s $170M Series C funding round, bringing the San Francisco-based satellite infrastructure provider’s total capital raised to $280 million, with the funds aimed at accelerating their "condosat" missions to simplify and expand access to space. - learn more
  • Overture VC participated in a $100M Series B funding round for Harbinger, a Southern California-based electric vehicle company specializing in medium-duty EVs; the funds will be used to accelerate the production of their electric vehicle platforms. - learn more
  • Muse Capital and Time BioVentures participated in an $18M Series A funding round for Conceivable Life Sciences, a New York-based biotech company developing the world's first AI-powered automated IVF lab; the funds will support their ongoing commercial pilot program in Mexico City and preparations for a U.S. launch targeted for early 2026. - learn more
  • B Capital Group participated in a $25M Series B funding round for Labviva, a Boston-based AI-driven procurement platform for life sciences; the funds will be used to accelerate product development, enhance marketing and customer support, and expand internationally. - learn more
  • Focalpoint Partners participated in a seed funding round for Kerna Labs, a San Francisco-based AI biotechnology company focused on advancing mRNA payload design for new therapies, with the funds supporting operational expansion and development efforts. - learn more

LA Exits

  • Intracom Systems, a pioneer in software-based communication solutions, has been acquired by IPC, a global leader in trading communications technology, to enhance IPC's SaaS communications offerings for the financial services industry. - learn more
  • Adexa, a provider of advanced supply chain planning solutions, has been acquired by Eyelit Technologies to enhance its Manufacturing Operations Management (MOM) and Manufacturing Execution Systems (MES) offerings and expand its market presence. - learn more
  • Caramel, a platform specializing in simplifying online vehicle transactions, has been acquired by eBay to enhance its offerings for secure and streamlined automotive buying and selling experiences. - learn more
  • ImaginAb, a biotechnology company specializing in antibody-based imaging and therapeutic solutions, has been acquired by Telix Pharmaceuticals to expand its next-generation therapeutic assets and biologics technology platform. - learn more
  • Sleepypod, a global leader in crash-test-certified safety harnesses and carriers for pets, has been acquired by Paw Prosper to enhance its commitment to pet well-being and expand its portfolio of innovative pet safety solutions. - learn more

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Standing Together Through the Flames

🔦 Spotlight

To our Los Angeles family,

This week’s wildfires have brought immense pain and hardship to our beloved city. Many of our friends, neighbors, and colleagues have faced evacuations, power outages, and the devastating loss of homes and livelihoods. Our hearts go out to everyone affected by this tragedy.

At dot.LA, we want to express our deepest sympathy to those suffering in this moment. We see your resilience and stand with you during this challenging time. This community has always been defined by its strength and compassion, and now is the time to come together in support.

If You or Someone You Know Has Been Impacted, Resources Are Available:

Evacuation Shelters:

  • Calvary Community Church: 5495 Via Rocas, Westlake Village, CA 91362
  • Ritchie Valens Recreation Center: 10736 Laurel Canyon Blvd., Pacoima, CA 91331
  • Pan Pacific Recreational Center: 7600 Beverly Blvd., Los Angeles, CA 90036
  • Westwood Recreation Center: 1350 Sepulveda Blvd., Los Angeles, CA 90025
  • Pasadena Civic Auditorium: 300 East Green Street, Pasadena, CA 91101
  • Pomona Fairplex: 1101 W McKinley Ave, Pomona, CA 91768
  • Stoner Recreation Center: 1835 Stoner Ave, Los Angeles, CA 90025

Animal Shelters:

Small Animals:

  • Agoura Animal Care Center: 29525 Agoura Rd, Agoura Hills, CA 91301
  • Baldwin Park Animal Care Center: 4275 Elton St, Baldwin Park, CA 91706
  • Carson Animal Care Center: 216 W Victoria St, Gardena, CA 90248
  • Downey Animal Care Center: 11258 Garfield Ave, Downey, CA 90242
  • Lancaster Animal Care Center: 5210 W Ave I, Lancaster, CA 93536
  • Palmdale Animal Care Center: 38550 Sierra Hwy, Palmdale, CA 93550

Large Animals:

  • Pomona Fairplex: 1101 W McKinley Ave, Pomona
  • Industry Hills Expo: 16200 Temple Ave, City of Industry, CA 91744
  • Antelope Valley Fair: 2551 W Avenue H, Lancaster, CA 93536
  • Los Angeles Equestrian Center: 480 W Riverside Dr, Burbank, CA 91506
  • Pierce College Equestrian Center: 7100 El Rancho Dr, Woodland Hills, CA 91371

Disaster Relief Information:

  • LA County Assessor: Information for property owners and FAQs about disaster relief.

Mental Health Support:

  • Los Angeles County Department of Mental Health: Crisis counseling and support for those affected. Access services through their website or call their hotline at (800) 854-7771.

Temporary Housing Support:

  • Airbnb: In partnership with 211 LA, offering free temporary housing for displaced residents. Spaces are limited; complete the form to be notified of availability.

Transportation Support:

  • Uber: Use promo code WILDFIRE25 for 2 free rides up to $40 each to/from active shelters.
  • Lyft: Code CAFIRERELIEF25 offers 2 rides up to $25 each for up to 500 riders, valid until 1/15.
  • Metro: Fare collection is suspended systemwide.

Staying Informed:

  • Watch Duty App: Provides real-time wildfire tracking, evacuation warnings, and updates.
  • Los Angeles Fire Department Alerts: Visit their website for the latest information on fire status and safety guidelines.

Safety Precautions:

  • Ready, Set, Go!: Personal Wildfire Action Plan by the Los Angeles County Fire Department.

To those in our community who are volunteering, donating, or offering aid in any form—thank you. Your efforts embody the spirit of LA: strong, compassionate, and unstoppable.

At dot.LA, we’re committed to amplifying stories of resilience and support. If you’ve seen inspiring acts of kindness or have resources to share, please let us know. Together, we can shine a light on the incredible ways this community is stepping up during these trying times.

In the days ahead, let’s hold tight to the bonds that unite us and remember that we are stronger together. The fires may scar the land, but they cannot dim the collective spirit of Los Angeles.

We’re here for you, and we’re with you.

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    A Strong Finish to 2024 for LA Tech: Crosscut Ventures Leads the Way

    🔦 Spotlight

    Happy Friday LA!

    As we close the book on 2024, Los Angeles has had a remarkable year in tech and venture capital. From groundbreaking funding rounds to industry-defining innovations, the city’s tech ecosystem has showcased its ability to adapt and thrive. Among the year’s final highlights was the announcement that Crosscut Ventures, one of LA’s premier early-stage venture capital firms, has added Jon Ylvisaker as its newest Partner.

    Crosscut Ventures’ Bold New Direction

    Announced in late December, Jon Ylvisaker’s appointment reflects Crosscut Ventures’ commitment to advancing its focus on the energy transition. Ylvisaker brings decades of experience in driving investments in energy technologies and digital infrastructure. As the founding partner and managing director of Yield Capital Partners, he led investments in startups and established companies shaping the future of sustainability. At Wolfacre Global Management, a Tiger Management hedge fund, he further honed his expertise in supporting impactful climate-focused solutions.

    Brian Garrett, Managing Director and Co-Founder of Crosscut Ventures, said, “Jon's extensive experience in climate and digital infrastructure investments, coupled with his impressive track record of bringing groundbreaking technologies to market, makes him the ideal partner to help lead our focus.”

    Since its founding in 2008, Crosscut has played a key role in shaping LA’s tech landscape. Ylvisaker’s addition reinforces the firm’s commitment to addressing global challenges like energy transition and sustainability, further solidifying its leadership in venture capital innovation.

    What’s Next for LA Tech in 2025

    The momentum from 2024 has set the stage for an even bigger year ahead. Entrepreneurs, investors, and innovators in LA are poised to take on new challenges and create meaningful change across industries.

    As we step into 2025, we want to thank everyone who helped make 2024 such a standout year. Here’s to another year of progress, innovation, and success. From all of us at dot.LA, Happy New Year!

    🤝 Venture Deals

    LA Companies

    • First Resonance, a company specializing in digital manufacturing software through its ION Factory OS, has raised a $20M funding round led by Third Prime with participation from Blue Bear Capital and others. This brings its total funding to $36M and will be used to accelerate product development, grow its customer base, and enhance support for advanced manufacturing sectors like aerospace, robotics, and clean energy. - learn more
    LA Venture Funds
    • Finality Capital Partners led a $17M Seed funding round for ChainOpera AI, a California-based company developing blockchain networks for AI-powered agents and applications, to accelerate product development, expand its team and enhance its blockchain and AI integration capabilities. - learn more

    LA Exits

    • Thirteen Lune, an inclusive beauty e-commerce platform, has been acquired by SNR Capital, marking a significant milestone in the platform's mission to amplify underrepresented beauty brands while fueling its next stage of growth. - learn more
    • Ergobaby, a leading brand in juvenile products known for its high-quality baby carriers, has been acquired by Highlander Partners. The acquisition aims to bolster Ergobaby’s growth, expand its product offerings, and strengthen its position in the parenting solutions market. - learn more

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