In 2004 I immigrated to the USA with little to no money. I jumped right into the business of buying and selling phones and cars to put myself through college. Sometimes when funds were low, I would sit in class without registering for the semester, convincing the lecturers to allow me to participate. It was not in vain. A vice provost found out what I was doing and awarded me a grant of $25,000 to finish college and retroactively credited my grades for those classes. People like me with this type of steadfastness are sometimes classified as black swans. I believe “black swans” have acquired a kind of resilience that is uncommon to most people. A trait that becomes evident and carries on to their companies, mine being MailHaven.
Getting accepted to 500 Startups was great for MailHaven. We had “prematurely” tried to fundraise after coming out of a hardware focused accelerator, but ended up raising a smaller amount. It’s not uncommon for that to happen. At that time, we had some traction for a possibly larger raise. However, it’s less likely for founders from the Midwest who have non-traditional backgrounds (who are not x-googlers or ivy—league educated). Additionally, as a black founder, I am a minority in the tech sector. However, 500 took a chance with us.
Stories like mine, and that of Mailhaven, are not uncommon at 500. Our participation in their accelerator has allowed us to make more progress than we have never made in our 22 months of existence. However, after graduation was when the real work began for our cohort! I mention this not to gripe but to offer a solution. Although the funding climate is froth with cash, it is a bit more challenging than before. The seed market is saturated amongst other factors. As a result, my cohort decided to legally take advantage of a new opportunity in fundraising: security tokens. While it still requires a buy-in from typical investor types in the US (net worth of more than $1 million or an income of at least $200,000 over the last two years). It creates the possibility for accredited investors outside Silicon Valley — who are aware of the risks — to invest in promising startups. Furthermore, investors outside the US have an opportunity to participate. It was a no brainer for us since we are all leading innovative companies with proven initial traction and revenues that any investor should be happy to have a stake in! Together we decided to raise seed money our way, a better — more inclusive — way.
My intention for writing this is not to talk about the investor benefits, but rather the benefits to startups. The formation of this token, by our hired law firm and fund manager, gives us a larger pool to access funding. The ability to have a strong leadership team steer the fundraising activity allows founders to focus on their startups at an early stage. This doesn’t negate the founders’ duties of fundraising in the future since every CEO must be able to hone their skill and be good at raising for their company to succeed. However, at this early stage, it does protect founders from circumstances that could lead to the demise of their startups and previous investors’ capital.
So here we are! Meet the 22X Fund entity, a security token backed by up to a 10% equity pool of 30 highly vetted startups from 500 startups Batch 22. 22X Token is the first of these security tokens, backed by equity in 30 elite startups who’ve already raised over $22M+ in capital for fast-growth businesses. The assumption that the best companies will always be able to raise in any climate is false and at best misleading to founders. At such an early stage, notable investors have said picking winners is really more intuition, luck and past relationships rather than substantial traction and product market fit. Finding what works for your startup is what’s important, investors are not the enemy, but by paving a resilient path for your startup now — it becomes more investment worthy in the future.
Kela is the CEO of MailHaven. He is a champion for the United Nations Climate Neutral Now Initiative and has published works for the US Housing and Urban Department as well as Recode magazine. He enjoys playing volleyball and reading papers on hyper local logistics