By Tom Ryden, MassRobotics Executive Director

Crowdfunding is often seen as a tool for consumer-facing startups, but we’re starting to see it emerge as a powerful growth strategy for B2B companies as well. I wanted to share with you a story of how a robotics startup in our ecosystem is leveraging this funding route to engage the robotics community in their growth.

Crowdfunding allows startups to raise capital from friends, family, customers, and the general public. Because these rounds are regulated by the SEC, investors do not need to be accredited.  Unlike Kickstarter campaigns, crowdfunding campaigns allow anyone to invest in private early-stage businesses through investment vehicles such as a SAFE or a priced equity round, and offer the potential to earn a return on the investment.  Investments can range from as little as $100 up to $250,000 or more.  Companies can raise up to $5M in a 12-month period under Regulation Crowdfunding (“RegCF”).

I recently connected with Hiten Sonpal, CEO of RISE Robotics who is gearing up to launch a crowdfunding campaign.  RISE Robotics has developed a fluid-free actuator that is electrifying and automating heavy machines.  It’s a high-tech B2B hardware+software solution today, and not yet a consumer play.

RISE had previously raised $22M from notable investors like Techstars and MIT’s The Engine.  It was looking to raise a smaller round in advance of a larger Series B.  Hiten recognized that RISE had a community that had been following them with interest and saw RegCF as a way to turn this community into owners and champions of RISE.

Raising under RegCF requires an intermediary per SEC rules.  There are several platforms to choose from, and RISE selected Wefunder, a leading platform where companies like Substack, Mercury, and Replit have also raised.

RISE started with a “Testing the Waters” campaign, where backers can express interest and complete the paperwork without committing funds.  It also chose to offer the same terms as some of their institutional investors to the community.  RISE was able to secure $800K+ in soft commitments within a few weeks of the announcement.  Based on this level of interest, RISE has decided to officially launch the community round in January.  You can check out their campaign here: wefunder.com/riserobotics. 

It’s useful to consider all alternatives to support your growth, especially as traditional funding sources such as venture capital have slowed down.  Crowdfunding could be one way to not only raise money, but also bring your supporters along for the ride!

I’m happy to connect you to RISE’s CEO directly should you have any questions or want to discuss their journey in more detail.