GE's Hammer: If I see a cap table fragmented with a bunch of investors I run in the other direction #mcCONVERGE #crowdfunding
— Veronica M. Combs (@vmcombs) July 10, 2013
At the funding panel discussion Wednesday at CONVERGE, a serial entrepreneur asked about crowdfunding.
First we got the stock answer of “don’t see how it’s possible for healthcare companies.”
Then the conversation turned to cap tables.
Elliott Menschik of Dreamit Ventures said that having 50-60 people on a cap table is becoming normal.
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“It’s a pain and you don’t want it to hinder an exit, though,” he said.
Joe Hammer, of GE Capital Healthcare Financial Services, said a cap table fragmented by multiple investors is a red flag to him.
That was the information that Jean Ann Berthold, Codex’s Chief Executive Officer, was looking for. She is considering crowdfunding to raise money for her latest venture.
She said that one way to get money from the crowd was to create an angel group of accredited investors. That allows many people to support the company without creating a messy cap table.
She said she had used this tactic before to be able to raise money from individuals without scaring off larger investors.
