NowRx has returned to SeedInvest for the 3rd time to raise a record $72M Series C through equity crowdfunding.
Crazy right?
This will bring NowRx’s equity crowdfunding total to over $100M (if successful), which will be the largest cumulative total since the JOBS Act came into law.
However, despite its untraditional nature, equity crowdfunding has given NowRx a few key advantages over the traditional venture capital (VC) route.
Here are the top 3 advantages NowRx has seen with equity based crowdfunding and why we continue to return to “The Crowd”!
Equity Crowdfunding Has Allowed Us to Prioritize the Customer Experience
When a company receives investment from a traditional VC, the founders are under a ton of pressure to show performance (growth) as quickly as possible. A larger check usually means greater pressure.
Oftentimes, this causes founders to make decisions solely based on growth. In other words, the founders prioritize growth at any cost, even if that means sacrificing quality or the customer experience.
We believe that is a mistake for healthcare startups.
First off, it is self-defeating. A poor customer experience in healthcare, more than anywhere else, makes it exponentially more difficult to acquire and retain customers.
People may be willing to give a food delivery service a second chance if they botch an order, but mess up their medication? Forget about it. The long-term damage to the brand reputation from a poor customer experience will heavily outweigh the benefit of any growth in the short term.
However, beyond that, prioritizing growth at any cost in healthcare is just irresponsible. Healthcare startups have a responsibility to prioritize the patient experience and safety above everything else.
These services and products are quite literally life and death for some patients. In our opinion, the “build fast and break things” mentality DOES NOT have any place in this vertical.
Equity crowdfunding has given NowRx the advantage of avoiding “grow at all cost” pressures that have become too common in the VC world.
This has allowed us to focus on scaling the business in what we believe is a more sustainable manner.
Equity Crowdfunding Establishes Fair Terms & Valuations For Both Sides
Another major advantage to equity crowdfunding for NowRx – how valuations and deal terms are set.
For a traditional VC investment, valuation and deal terms are negotiated between the company and the VC.
Typically, one side has significantly more leverage than the other and that can result in overinflated valuations and/or term sheets that seem to heavily favor one side.
However, in equity based crowdfunding things are a little different.
Terms are mostly standard to protect companies and investors. Valuations are determined by a 3rd party, usually based on a multiple of revenue and market comparisons.
In our view, the overall process is just much more objective and less susceptible to hype or other external factors.
We believe this is a big advantage because it makes things much more equitable for both investor and company which benefits both parties over the long run.
Equity Crowdfunding Has Created 10K+ Advocates Across the Globe
Finally, the last and perhaps biggest advantage NowRx has seen to raising funds through equity crowdfunding is “The Crowd” itself!
Every crowdfunding campaign we have advertised attracts more and more attention to the NowRx brand.
Our campaigns have seen more than 10K+ people from different areas, backgrounds, and demographics invest in the company – each of which is a loyal, engaged, and highly incentivized promoter of the NowRx brand.
These promoters help introduce NowRx to family, friends, and even other individuals in their personal network. This is a massive advantage because it gives us a level of brand recognition and trust as we expand.
In our opinion, this has been the biggest advantage to choosing the equity crowdfunding path!
Crowdfunding Equity is a Gamechanger
Equity crowdfunding has been a complete game-changer for NowRx.
It has provided us with several key advantages including:
- An ability to prioritize the patient experience as we scale
- A fair valuation and set of terms
- A network of 10K+ NowRx promoters
These advantages have been a big part of our success thus far and a major factor in why we continue to return to The Crowd!
If you have more questions or would like to learn more about NowRx’s crowdfunding round, visit our SeedInvest page. We answer questions on the forum daily and will be happy to answer yours!