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[Press Mention] Startup Roundup: Jostle’s unconventional path to $3.1M round

Vancouver’s Jostle raised an unconventional series A round last week, attracting $3.1-million in backing not from venture capital funds but all from private investors...

Via the Financial Post

Vancouver’s Jostle raised an unconventional series A round last week, attracting $3.1-million in backing not from venture capital funds but all from private investors.

The cloud-based engagement platform billed as a competitor to Yammer, said last Friday that it now has 52 shareholders, including most of its employees and directors.

As startup communities around North America watch to see whether securities regulators will implement rules permitting equity crowdfunding (the U.S. Securities and Exchange Commission is still working out the regulations under the JOBS Act) this funding round is an example of some of the creative approaches to raising capital companies are taking in the meantime.

Broadly speaking private companies can raise money from family and friends or from accredited investors, that is those whose net worth or annual income hit certain minimums.

As lobbying efforts to loosen those restrictions continue, some are turning to high-net worth investors who did not previously consider investing in such ventures.

Quoted in a blog post on Jostle’s funding, Gary Yurkovich, managing partner of Espresso Capital, noted that conventional angel investors weren’t part of the round while the majority of investors came from a “risk profession such as property development, medicine, or oil and gas.”

“The success of this investment round was due to the targeting of qualified investors who understood risk,” he said.

“It foreshadows the growing importance of crowd-sourced funding — create something truly innovative and directly target individuals that will resonate with the unique value it provides.”

The latest funding brings Jostle’s total capital raised to $4.6-million.

Read more by
Kelly Batke

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