Raise Capital raises awareness for entrepreneurs (and itself)

Raise Capital is a new site looking to connect entrepreneurs and investors. This is a paradigm-changing idea if it’s executed and positioned properly. Right now, users are able to sign up for three different plans. The plans are differentiated based on the content your provide about your venture–the silver package is just text, the gold package adds photos and the platinum package adds video.

I think this the wrong approach to pricing/segmentation. The packages are priced from $30 to $50/month. Besides marketing (to entrepreneurs and investors) and possibly wages, the main expense is data center costs. It makes more sense to me to let everyone upload photos and video–bandwidth is incredibly cheap these days. This would drastically increase the value to users. Also, what does “text description of your venture” mean? I don’t want some meaningless blurb, I want my business plan out there for qualified investors to research the viability, attractiveness and fit of my venture.

If I were running the site, I’d make it one flat monthly fee. Then I’d bundle value-added services. For example, Raise Capital could hand-deliver a (vetted and legitimate) business plan to VCs that fit for $1,000. A lot of entrepreneurs have a general idea of the type of investor they’re looking for–why doesn’t Raise Capital play match-maker? They could charge top dollar too–the lifeblood of startups is cash and $1,000 or so is pocket change compared to securing a Series A round of financing (or even the experience that comes with trying to make your case to an interested investor). This is just off the top of my head, I’m sure there are hundreds of other services the budding entrepreneurs could use.

Matt at VentureBeat raises an important concern about pride. I said earlier the idea had to be positioned properly. Credibility is key, especially from the perspective of the investor. VCs, angels and other investors would be lax to automatically trust what is essentially an unproven marketplace for ideas. If Raise Capital is able to secure quality entrepreneurs and business plans, investors will recognize the marketplace’s inherent value as a source of investment opportunities. Matt refers to it as a “public meat-market” and that is on point–but it’s a meat-market with the potential to break down funding barriers and reduce friction in a very tight-knit community.