Brian Meece was a musician and filmmaker when he helped found RocketHub in 2009. The startup was one of the first crowdfunding platforms to hit the market. Meece was looking for a way to help artists raise money online for their creative endeavors, but the site did not fully take off until science researchers and entrepreneurs used it to seek funding from the public.
RocketHub was acquired in 2015—in a deal valued at US $15 million—by EFactor Group, an online resource center for entrepreneurs. The crowdfunding platform now will be used solely to help raise money for startups. RocketHub initiated tens of thousands of projects on its platform in its first five years, with almost half collecting funds, Meece says. Amounts ranged from $100 to $500,000. The company took up to an 8 percent commission of the total amount raised.
Meece was a speaker at last year’s IEEE N3XT, which helps entrepreneurs launch and grow their ventures. At the October event, in Toronto, he spoke about founding, scaling, and exiting RocketHub. He was also featured in the A&E Networks documentary, The Startup Factor, which follows small businesses as they take their ventures to the next level.
In this interview, Meece discusses how he grew his company.
What gave you the idea to start a crowdfunding platform?
I started to see the crowdfunding model emerge in the early 2000s when indie filmmakers and other creative types began raising money through their personal networks. Singer-songwriter Jill Sobule, for example, sought to raise $10,000 from fans to produce her next album after her record company dropped her. She received almost $100,000. Creating a platform where people could post such projects was a happy experiment for me and my cofounders.
Since you don’t have a technology background, how did you find the right partners to help you make your idea a reality?
Much like forming a band, I looked for cofounders to help me launch it who could play different instruments well, so to speak. I needed a “lead guitarist” to build the tech platform; a “drummer” to keep the venture on track, making sure we stuck to budgets and met projections; and so on. We each had complementary skills, and came together around a common goal to add value to our community and help it get exposure.
When building a team, you need chemistry, and you have to feel inspired being around one another. I’m proud of the work we did.
Your platform started off for people in the arts, but scientists and entrepreneurs also used RocketHub. Were you hesitant to move away from your original vision?
We welcomed it. We were pioneering a whole new sector. Having any user be successful on the platform was a win. While building the company, I was earning a master’s degree at Columbia in negotiation and conflict resolution. Research students at the school heard about RocketHub and asked to use it, because they hadn’t received grant money to complete their research project.
One project in particular that got a lot of attention was called “Breaking Good.” Researchers from Columbia and Princeton received roughly $25,000 on RocketHub to design their own crystal meth lab to find out why the drug is so addictive. This was when Breaking Bad [a show about a high school chemistry teacher who turns to making and selling methamphetamine] was at its peak. Other RocketHub science projects were featured in an article in Wired in December 2013 selected by Bill Clinton and Bill Gates who were guest editors.
As the startup boom emerged, entrepreneurs also began using the platform. They became the fastest-growing segment on the site. It all happened organically.
RocketHub remained one of the largest crowdfunding platforms despite competition. Why not continue to grow it? Why sell?
During my time at RocketHub, we were always cultivating new growth opportunities, and felt the merger-and-acquisition route was an attractive option, especially when compared to self-funded growth or pursuing significant venture capital. And as entrepreneurs, we were ready to move our endeavor to the next level of scale, and continue on our own career growth as well.
RocketHub connected with EFactor Group because it was a strategic fit. The company worked with entrepreneurs who were already benefiting from RocketHub and was looking to further develop its own funding division.
What advice do you have for other founders on how they can attract buyers?
It might sound contrary, but sometimes the best thing a founder of a company can do is not worry too much about being acquired. Oftentimes, larger companies seek out startups that are breaking ground in new areas, have traction in that area, have a talented team, and have sound financial fundamentals. My advice is to build something great and try to be the best in the world at it.
While there is a lot of buzz around innovation in the startup world, focus first on pain points. Solve a problem that’s a real headache for people; try to simplify or eliminate it. For me and my cofounders, we knew getting access to capital was challenging, and traditional methods for raising money were becoming more difficult. By solving this problem, we became leaders in crowdfunding—which presented opportunities for us that we didn’t anticipate. Always ask yourself: How can I add value where no one else has?