At Key, the team plans to be a massive new category and build a huge platform, sort of the Shopify of residential real estate. They need VCs, VCs that understand how to do that, that are in the market, that give them that credibility, and can do 100M, 200M, 500M financings as they scale from B, C, D, toward an IPO eventually. It was this growth story, the ambition, the scale, the ethos, and the team that could pull it off which drove major investment in this opportunity from the existing FrontFundr community.
FrontFundr made this possible because, “You’ve got a really good platform that is professionally put together, that manages investor relations, manages corporate governance, manages communications, and manages your shareholder base, where before the thought of taking on 150 shareholders in a spreadsheet was such a daunting task. VCs shouldn’t worry about it, they should actually like it, to go through crowdfunding now you need to go through extreme diligence and extreme governance, and that set us up for success, with the VCs.”
What really worked for Key is that users resonated with their mission to make homeownership affordable. This was reflected in its demographics composition with 44% of investors being aged 20-34. Although media coverage for the campaign was low they did an excellent job of connecting with individuals on their waitlist for home purchases as well as the FrontFundr community.
The FrontFundr equity crowdfunding accounted for 10% of Key’s eventual Seed round with investment from major VC and angel firms. All of Key’s 173 ECF investors were onboarded using a Voting Trust Agreement (VTA) which allowed the company to reduce these shareholders to a single line on the Cap Table and move voting rights to a single individual.