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February 17, 2012 / jessicajackley

ProFounder Shutting Down

We started ProFounder in August 2009 with the mission of ensuring that all entrepreneurs have access to the resources they need to succeed through the engagement of robust, supportive communities. We created a platform and set of tools that made the process of raising investment capital from friends, family and community more efficient, inexpensive, straightforward and legally compliant. We’re proud of both the impact we’ve had on individual entrepreneurs who have accessed capital and grown their businesses using ProFounder’s platform, as well as our influence on crowdfunding regulatory reform in Washington.
 
Despite our progress, the current regulatory environment prevents us from pursuing the innovations we feel would be most valuable to our customers, and we’ve made the decision to shut down the company.
 
While this means the entity will be officially closing, we are still committed to our vision. One way we’ll be pursuing this is by joining forces with GOOD, partnering to continue innovating around crowdfunding. Our founding team will be collaborating with theirs in coming months to launch new tools and community experiences to empower entrepreneurs and creators. We look forward to bringing what we’ve developed and learned at ProFounder to GOOD, and are eager to work together to shape the next chapter of crowdfunding.
 
We will also continue to contribute to efforts in Washington. While it’ll take time, we believe changes are imminent in the crowdfunding regulatory environment and we are committed to being a part of those reforms. If you are also passionate about making crowdfunding accessible for entrepreneurs, legalizecrowdfunding.org provides great tools for getting involved. 
 
Most importantly, we want to express our gratitude to you, our community, for contributing to ProFounder’s journey. If you still want to access our tools and any data you may have inputted, the site will remain live through the end of March.
 
It’s been an incredible ride, and an honor to be a part of this together. Thank you!
 
Jessica & Dana 
 
 

61 Comments

Leave a Comment
  1. Serenity M. / Feb 17 2012 1:18 pm

    All the more reason why we need to push for crowdfunding and fight!

    Thank you ProFounder.

    • Lee Jordan / Feb 17 2012 3:22 pm

      There is a site ready to launch that has created a model that is legal and will connect all the other sites into as well! .. heard it through the grape vine

  2. Sandy Rowley - Megastar Networks / Feb 17 2012 1:22 pm

    Thank you for all you have done for business. Keep us posted on your progress with GOOD.

    All the best,
    Sandy Rowley
    Megastar Networks

  3. Sean / Feb 17 2012 1:41 pm

    What/WHO is GOOD?

    • Sean / Feb 17 2012 3:43 pm

      Never mind… I found out who GOOD is.

  4. Editor / Feb 17 2012 1:45 pm

    sad news

  5. Tom Wesselma / Feb 17 2012 2:13 pm

    I’m very interested in working with anyone that wants to pick up the pieces and carry on. I have been working for over a year on defining an approach to this but was always similar enough to ProFounder that I have not made the commitment. Things like Crowdtilt are interesting but lack the community focus, local scope, and personal involvement that are key to my vision, and I believe, the vision of ProFounder. If you’re interested, let’s talk!

    Tom Wesselman
    425 985-0716
    twesselman@gmail.com

  6. Don / Feb 17 2012 2:25 pm

    This is certainly disappointing news. I hope over time you can share more details about why you choose this decision so other entrepreneurs can learn from your experience.

  7. Greg Berry / Feb 17 2012 3:31 pm

    Hello Dawn and Jessica. I’m so sorry to read this. Not only do I think your service is / was truly inspired, but it’s so badly needed. Although I’m sure it’s a blow to each of you personally, what I know about your character tells me that you’ll be back to work on the next iteration of your vision for the future before too long (but hopefully after a much-deserved break).

    If you’re able, please keep us updated on your next steps. I’m happy to collaborate, commiserate or otherwise support this vector.

  8. Pascale Scheurer / Feb 17 2012 4:51 pm

    Hi Jessica and Dana

    Wow, ProFounder and GOOD together sounds incredible. I just recently found out that Jessica was a Kiva founder too (I hope that’s correct) and that’s another of my all-time favourite platforms.

    I am also a Mum of twin girls… now 3 1/2, thay have had massive impact on my life and work – life has been quite a rollercoaster since they arrived.

    Good luck to both of you and I’ll follow with great interest the collaboration with GOOD, as I’m attempting something similar (EthicalStartups) here in London whilst trying not to replicate what pioneers such as yourselves have created. We also have a different legal framework here.

    With very best wishes,

    Pascale Scheurer

  9. Pascale Scheurer / Feb 17 2012 4:56 pm

    ps If you ever want to swap twin-Mom-entrepreneur strategies, just shout!

    Pascale

  10. Mark Landay / Feb 17 2012 5:14 pm

    Jessica,
    How will I reach you in the future?

  11. Charles / Feb 17 2012 6:39 pm

    Fight what? Can you be any more mysterious about how the government is preventing you from doing what you want to do? Please be specific. 1) What is it that you want to do, and 2) how is the government preventing you from doing that.

  12. RIDESHARE 2.0 (@rideshare20) / Feb 17 2012 10:08 pm

    Hi Jessica/Dana,

    Thank you for starting this site and everyone’s efforts to keep it running. Please keep the site up as the tools and information are extremely helpful for startups. Consider a donation link to crowd support your efforts and volunteers to help continue your vision :-).

    Best,

    Thomas Pham

  13. Joachim / Feb 18 2012 1:05 am

    Good luck for your new venture.
    Crowdfunding is a great new trend and we support it from France 🙂

    Anaxago’s team from Paris

    • lexawes / Apr 2 2012 7:08 am

      If this was US enterprise why do they just do not re-locate if there is legal issues related for the idea.

  14. Cynthia Gerdes / Feb 18 2012 5:58 am

    So sorry to see you leave BUT one suggestion for future endeavors…please keep connected with your community. I signed up last year and this “closing down” email was the FIRST I had ever heard from you. Not all of us live and die by facebook or twitter….there’s a whole community of people who might be missed.

    And speaking of….even though I had this one suggestion, my heart is sad that you’re closing the site–knowing how much you put into this– glad that you’ve got future plans, and hopeful that you get some rest and then carry on and succeed in your next step. Best to both of you.

  15. Alex Day / Feb 18 2012 6:53 am

    I by no means can speak for the visionaries behind ProFounder, but the government is preventing small companies from being funded through the archaic SEC laws (it is afterall referred to as the Securities Exchange Act of 1934, as in the YEAR 1934). Anyone attempting to offer equity in a company without filing very expensive and time consuming disclosure documents, are in violation of SEC laws and can be penalized. Many of us have the vision of being able to bring in funds and provide equity in our company for those willing to share in the risk with us. The laws are currently designed such that only “accredited investors” which are rich people, can easily invest in private equity. So if you try to get 100 of your friends and family to kick in $50 apiece to get your business going, and you offer equity, you are breaking the law. I have no doubt in my mind that as ProFounder was beginning to make progress the SEC threatened, harrassed, or otherwise convinced them to stop. I have NO KNOWLEDGE of what happened here, this is only my personal speculation. Whatever the founders are doing now I wish them the best of luck on their endeavors. I am very confident that we will see change in the securities laws in the future, but it is only as bold visionaries continue to puch the envelope and force change.
    Alex

    • Lee Jordan / Feb 19 2012 8:11 am

      Easy to get around

  16. kamilrextin / Feb 18 2012 9:02 pm

    Sad news. Crowd Funding is the future! Following the kickstarter model

  17. Don / Feb 19 2012 12:12 pm

    Very saddened by this news. Thank you for all of your efforts pioneering investment crowdfunding.

  18. andrewnonumbers / Feb 19 2012 8:58 pm

    That’s sad news, especially since I just discovered Profounder. I’ve actually worked with other ideas based on crowdfunding before and we were advised to shift away from the area. Hopefully this will change sometime in the future.

  19. dlmilli / Feb 21 2012 9:44 am

    While few details behind their decision have been made public, here is our analysis of the driving forces behind the closure of ProFounder, in the midst of crowdfunding’s emergence:

    http://fundinglaunchpad.com/2012/02/investment-crowdfunding-analysis/

  20. Linda King / Feb 22 2012 10:44 am

    It’s really amazing to me that the press and others talk about the small business owners being the ones to help us get throught the economic crisis, yet our government prevents us from accessing so many things to do just that! We want to help our local economy and feel so restricted!

    For us, seeking only $12,000 may not be much, but that would allow us the opportunity to put our company in front of several investors who are already interested in our concept and could provide employment for people in the US.

    Keep pushing and we will keep signing!

  21. McKenzie / Feb 24 2012 2:52 pm

    This is very sad news as i had clients looking to join your site. Check out Secondmarket (www.secondmarket.com), its not crowdfunding but they help raise cpital for private companies and startups. Would it help to become a broker dealer?

  22. Angelina Clarke / Feb 27 2012 3:19 pm

    Nooooo! I understand the decision but I am sad. Please keep us appraised of you next steps, ladies!

  23. Rafael Zatti (@rafazatti) / Mar 1 2012 6:22 am

    Hello Jessica and Dana,

    I am an editor of the biggest blogs crowdsourcing / crowdfunding in Portuguese and I would like to chat with you about the future of crowdfunding. Can we talk? Thank you 🙂

    My e-mail: rafael@ideias.me

  24. Sara Hanks / Mar 1 2012 4:11 pm

    All decisions can be changed, right? In the meantime, there are others who believe in the crowdfunding model, and want to make it work. I founded CrowdCheck, Inc. with some other securities lawyers (I know, securities lawyers, right? don’t make assumptions though!) to provide solutions to crowdfunding issues. As soon as the regulatory environment changes, we’ll be there for crowdfunding entrepreneurs and investors.

    Sara

    CEO/Founder, CrowdCheck, Inc.

  25. Stan / Mar 5 2012 12:16 pm

    It is such a shame to hear this. With the banks so reluctant to lend crowd funding could be the answer to getting economies around the workd moving again.

    Best whishes for the future.

  26. Dana / Mar 8 2012 6:08 pm

    I’m going to take a guess here (I could be completely wrong) but I think that banks hate the idea of crowd funding. It’d mean the end of loaning from the banks. They can’t make money (interests) out of people. Chances are, they are part of the group that is against it.

  27. Freeman / Mar 18 2012 5:27 pm

    Dana,

    Does your decision to speak at the Banking Subcommittee Hearing on crowdfunding on the 21st foretell of any longer term plans?

    Cheers,
    Freeman

  28. Terrence N Bailey / Mar 30 2012 4:45 am

    Now that the crowd sourcing bill is going to be passed, are you still going to shut down the site?

  29. jaguarproductions / Mar 30 2012 11:48 am

    ARE YOU STILL SHUTTING DOWN NOW THAT THE JOBS ACT IS PASSED?

    • joe d / Apr 7 2012 7:03 am

      this was my question too… didn’t it include some regulatory relaxation around crowdfunding?

      • joe d / Apr 7 2012 7:05 am

        if the JOBS act doesn’t make a difference in this decision, i’d be interested to hear from ProFounder about what the JOBS act does and does not do or if there are still other regulatory hurdles that it didn’t address.

        Thanks!

  30. ecoconnectcic / Apr 6 2012 8:19 am

    I only just discovered you, having read with interest your testimony at the Subcommittee on Capital Markets and Government Sponsored Enterprise, last September. Too bad you couldn’t make a go of the current model. It has value.

    Here in the UK, we don’t have such a restrictive regulatory environment. Although ecoConnect,-a social enterprise and green industry business network, is mainly focussed on cleantech (low carbon, green industry etc), would you be interested in exploring a collaborative partnership for the UK and potentially EU market(s)?

    I see, at the very least, the potential for a white-lable deal. Perhaps something deeper.

    Regards

    Robert Hokin
    Chief Executive at ecoConnect
    Chairman at Greenbackers.co.uk
    +44 870 803 3581
    robert.hokin@eco-connect.org

  31. Ewk / Apr 6 2012 9:31 pm

    THIS IS BS!!!!, the only way the US will build itself out of its recession, is to become more innovative, productive and efficient, and their laws are bringing down the very thing that will do that.

    This overrestrictive, and lobby group biased framework no doubt just pushes, the best entrepreneurs in the country overseas, like asia, where such ridiculous and counterproductive regulations do not exist.
    A self destructive spiral.

  32. JuicyCanvas (@JuicyCanvas) / Apr 11 2012 7:17 pm

    sorry if i sound naive..but i just saw this video :

    where CrowdFunding, was signed into law April 5th, 2012.

    so are u guys coming back or WTF?

    Artur | founder
    JuicyCanvas.com

    • Chris Ewing / Apr 14 2012 10:12 pm

      I agree, what’s going on? Are you guys resurrecting?

  33. Daniel / Apr 22 2012 8:31 pm

    Congratulations on the passage of the law.. I saw you on TED .. please don’t give up .. how can I help?

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