On Wednesday, Betaworks—the company behind Digg, Instapaper, Bit.ly, and more—announced that it had launched a new crowdfunding platform targeting venture capitalists, thereby allowing them to buy equity in new startups. It's called Alphaworks.
As Fortune reports, Alphaworks will function as a separate LLC with $1 million of its own funding, $200,000 of which come from Betaworks itself. The rest comes from "sponsors," including, at the outset, SV Angel and Lerer Ventures. What sets Alphaworks apart from competitors like CircleUp and Fundable is the way deals are structured: Alphaworks will fund the bulk of new projects, and leave some of the investment round open to interested investors, who, at least until the JOBS Act goes into effect, must be accredited.
Take one of Alphaworks' initial investments, See.Me, a platform for artists to showcase their work. The website/community, which allows artists to make money off their creations, raised $1.1 million in Series A funding from Alphaworks (with an overall valuation of $9.5 million), but left $150,000 up for grabs. The idea is that See.Me's passionate community of artists will (eventually) round out the rest of the investment round. Ergo: The people who care and use See.Me the most can also have a financial stake in its success.
"What excites me most is the potential for Alphaworks to be used by non-tech companies," See.Me founder William Etundi told TechCrunch. "The local coffee shop or book store or band can stay alive and grow because they’re owned by their community and fans, and that’s something really special."