Why BabyQuip is Fundraising on SeedInvest

I thought it would be helpful to potential investors and other founders to share some of the challenges that come along with growing a startup, raising capital (especially as a female founder), and why I chose to go the equity crowdfunding route through SeedInvest at this stage.

BabyQuip launched its latest round on SeedInvest late last month. We are so proud of what we have done to grow BabyQuip into the market leader it is today, and are excited to announce the opportunity for anyone interested to invest (as little as $5k) into our business. 


The Stages of Startup Growth and Funding

Growing a startup business is like navigating through an obstacle course. The first phase is all hope and grit: Do we have product market fit? Will our service be more than minimally viable?

For marketplace businesses it can be even more difficult because we have to recruit suppliers and entice customers.    

Pre-Seed Stage

When we started BabyQuip in mid-2016 we were only armed with the belief, based mostly on early work in Santa Fe and my Airbnb experience, that there was a large and underserved market for baby gear rentals for traveling families. We had very little money to expand and create momentum. We focused on being able to tell a good story, mostly around how grateful and happy parents were to use our service.

Then we joined the Startx Accelerator, which provided some great advice, new connections, and our first exposure to potential investors. 

As for funding, I was able to invest some of my own money (and work without a salary) as well as tap into a network of potential angel investors and friends.  

Seed Stage

fran maier

The next stage is to try to grow enough and learn enough to get a bit of outside seed capital at better than a bare-bones valuation. For BabyQuip, this stage was full of ups and downs. Highlights include joining an accelerator (Quake Ventures), getting our first institutional investor (Startup Capital Ventures), and rapid expansion of our supplier base who we call Quality Providers (these are the independent contractors who deliver, setup and pickup the baby gear that they own).

In addition to bringing on new team members, we said good-bye to some of the people who were along at the beginning, including one of our founders. We changed our name from Babierge to BabyQuip, which, while absolutely necessary, was a bit of a shock to the system. Nonetheless, we continued to grow,  and are now in over 400 markets with nearly 600 Quality Providers. We’ve served over 30,000 orders and have earned a world class Net Promoter Score of 82! (The average according to Survey Monkey is 43.)

Raising money still took an inordinate amount of time and effort. Many Silicon Valley  investors are focused only on the companies that are likely to be the next Airbnb or Uber. To be fair, a large part of this has to do with how they are funded and the challenges of deploying very large amounts of capital. Some don’t fully understand family, or female oriented services. And of course you can’t ignore the fact that women only raise 2.7% of all venture capital funds.


Before we talk about our Late Seed round, let me tell you my story…

Professional bingo card including SeedInvest

Overall I’ve had a great career as an entrepreneur. I’ve had a tremendous career if you add the words “female” and “entrepreneur” because it is much harder to be a woman and start-up founder. It’s even more difficult to get investor attention, more difficult to get capital and more difficult to build a team. Here’s a short rundown of my professional history:

  • Electric Classifieds & Match.com: It was just about 25 years ago when I joined the founding team at Electric Classifieds and launched Match.com. My work in bringing women to online dating was pivotal to our success as recounted in the book Player’s Ball (see Atlantic excerpt here). We sold Match.com for way too little in 1998, but wow, we not only built a brand, but a whole new category! And many great lessons were learned.
  • Women.com: The site provided great content to the women’s market in the late 1990s. We were a top 25 web site in 1999 and we IPO’d when I was CMO.
  • BlueLight.com: Joined this joint venture with Kmart in 1999. I launched the fastest growing Free ISP service to bring in online revenue.
  • TrustArc (formerly Truste): I spent over 10 years at this company where we became the leading authority on internet privacy. I converted it from non-profit to a venture-backed for-profit company and raised over $10M in 2008 from Accel.
  • BabyQuip: As you can see, BabyQuip is my 5th startup! It reminds me of Match.com, not only because it’s so early stage, but because we are building a new category. And like Match.com, people are so grateful for our service.

Over the years, I’ve encountered a range of other experiences and biases that also got in the way.  For example, one potential investor called me “abrasive” when I was maybe just “assertive” in going after the capital.

You might also think experience would help with fundraising, but I’ve now encountered ageism as reflected in “Why are you doing this now?” I’ve surveyed a number of male entrepreneurs who also have plenty of grey hair, and apparently they are not asked this. Hmm…

Late Seed Stage

Fast forward to the present…now we are in a new stage, call it “late seed” or “pre A”.

Side Note: The goal posts keep shifting and these labels are almost meaningless. A late stage “seed raise” used to be called an ‘A’ round. Now most startups raise close to $5M before they raise an ‘A’ round which now is typically well over $5M.

It has now been 3 ½ years since BabyQuip was founded and we’ve raised nearly $2.75M. This time has allowed us to build the business more efficiently and likely more sustainably. We have a much better sense of what we need to do to scale and can see profitability in our future.

I started looking at crowd-funding capital raising a few years ago when I made my own angel investment. It made sense to me to make it viable for smaller investors to get in on start-up investing. Some in the VC community scoff at this kind of fundraising, but the more I learned about it the more intrigued I became. Some large and well known companies are using crowd equity platforms to top off their ‘A’ rounds or even raise very large ‘B’ rounds. Until recently, I didn’t personally know many entrepreneurs doing this. Especially female entrepreneurs like myself, but hey, I’ve always been an early adopter and SeedInvest was a natural fit.


What are the benefits for using SeedInvest’s equity crowdfunding platform specifically for BabyQuip?

There are several compelling reasons from our standpoint and at our stage to use a crowdfunding approach to fundraising:

  • Women entrepreneurs and their products/services do better on crowd-funding platforms.
  • Many of our customers (and even our Quality Providers) have indicated an interest in investing. They love our service and believe in what we’re doing. The low minimum investment ($5,000) makes this possible.
  • Seedinvest is marketing the opportunity in a big way which is getting BabyQuip in front of new investors, potential customers and partners who we otherwise might not get in front of.
  • Seedinvest is also consolidating small investors so that BabyQuip doesn’t have to manage each individual investor.
  • Crowd equity does not “crowd out” traditional VC investments for the future. Plenty of companies are raising from both channels.
  • We keep more control!

Finally, I’m a bit burned out by the dog and pony show with traditional angel groups. I’ve pitched to at least a dozen and none of them have made an investment (and my experience isn’t unusual).   


What are the costs to the Startup?

costs of seedinvest

Of course there are costs, including the commission to the SeedInvest platform and the marketing of the offering to customers, friends and suppliers, however, the trade-off seems well worth it.


What are the benefits to the investors?

From an investor’s standpoint, they don’t have to invest large amounts on money. We’re accepting investments from accredited investors as low as $5000. Investors can more easily diversify because of the lower investment amount. SeedInvest does extensive due diligence on the company, deal and terms. And investors can vote with their dollars to support the companies they believe in.


What is the future of BabyQuip with SeedInvest?

the future of BabyQuip with SeedInvest

So as BabyQuip now enters its next stage, which is about scaling, we need a bit more capital. This SeedInvest round will get us through 2020, help us expand into new markets, test some new product and service ideas, build out our team and get to ‘A’ round metrics and eventually, profitability. 
I hope you’ll join us and consider making an investment in BabyQuip.

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