Republic is a crowdfunding company born out of the AngelList family, having completed a spin-out in 2016. While AngelList focuses on the accredited investor demographic, Republic was created to offer early-stage investment opportunities to all investors, regardless of their accreditation status. The site has further distinguished itself with its close ties to Y Combinator (the preeminent startup accelerator) companies, numerous diversity and social justice initiatives, and its acquisitions of other alternative investment platforms to expand its suite of offerings.
Republic is one of a handful of top players in the equity crowdfunding space, which is emerging as an increasingly viable alternative – or, occasionally, a supplement – to raising funds from venture capital firms and angel investors. These sites (others being StartEngine, MicroVentures, and SeedInvest) offer low investment minimums, in contrast to the prohibitive check sizes frequently associated with angel and pre-seed investments. The site’s acquisitions of Fig and Compound represent an extension of this core competency, as both circumvent traditional funding models to make investing in a given asset easy. Fig, for example, lets video game developers receive funding directly from average investors, people who are more likely to be end users than the institutional backers preceding them. Republic also differentiates itself by emphasizing its diversity and social justice initiatives, noting investment opportunities that have minority, immigrant, or female founders, along with opportunities that concern social issues such as incarceration, public health, and environmental sustainability.
Republic’s minimum investment amount starts at just $10, however, this figure will vary on a deal-by-deal basis as each company selling equity is given the ability to adjust this figure. Republic also offers investors the opportunity to invest out of an IRA, however, the maximum amount one can invest is conditional, linked to wealth-dependent factors such as net worth and income. The process for crowdfunding on Republic is as follows: investors can invest in a company through its page before it has reached its maximum fundraising goal. Each campaign’s page provides a comprehensive outline of the business for context, along with the terms of the offering (see our Education page for more information on investment terminology). If the company has already met its fundraising goal and an investor still wants to invest, they must join a waitlist.
Republic’s investments are generally structured as a SAFE, or a simple agreement for future equity. SAFEs differ from equity and debt in that the investor does not receive shares or voting rights but rather an agreement for future equity. Access to liquidity with these investments is deferred to an uncertain future date, conditional on subsequent rounds, or some other liquidity event. For a full overview of how these investments work, we highly recommend the briefing on SAFEs by Josh Ephriam, a former investor for First Round’s Dorm Room Fund.
Republic is growing rapidly and has the aspirations to match, intent on becoming an enduring leader in the equity crowdfunding space. That said, it helps to take a step back here, noting two key detractors. First, some investors may not be comfortable with the structure of SAFE investments. Second, the site forces users to do their own diligence on sites, only offering the materials provided by a company. For a site advocating ease of access for the masses, and, more specifically, newcomers to the alternative asset class, this seems to create an uncomfortable instance of corporate cognitive dissonance. Having noted these concerns, the site shows significant promise in its ability to continue the strong execution it has shown to date by offering interesting investment opportunities in early-stage companies. Republic has a strong community, many burgeoning startups available for investment, and a clear mission and business model, all of which bode well for its future.