With equity crowdfunding, businesses raise capital from an audience of people in exchange for equity ownership.

I spoke with Bill Irvine, Kara Water’s Co-founder and Financial Advisor, about how he used equity crowdfunding to help his company grow to its next stage.

Kara Water creates water from the air. It produces the world’s first air-to-water dispenser of mineral-rich alkaline water, a modern update of a traditional technique practiced for centuries. Kara Water’s technology can address water shortages and scarcity, problems exacerbated by climate change’s effects, such as drought and natural disasters.

Why did you decide to pursue equity crowdfunding? And which platform did you use?

BI: Kara Water is a hardware company that designs, manufactures, and sells air-to-water dispensers. Yup – we create drinking water from the air. Our mission is to increase drinking water access. 

Through IndieGoGo and our e-commerce website, we sold over $1,600,000 worth of products to more than 800 customers in 44 countries. We’ve been featured on NBC’s “Today Show,” The Weather Channel, FOX, and BBC News. We went viral on YouTube with over 9 million views and were awarded TIMES Best Invention and CES Innovation Award. So, we’ve cultivated a strong audience of champions.

We’ve raised funds from not only our family and friends but also from customers and technology enthusiasts. We surveyed our customers and heard that while they would love to invest in our company, either the minimum check size was too big or they weren’t accredited.

That’s when we decided to do a Reg CF raise (i.e. equity crowdfunding) to enable us to achieve the business’s goals for the next 12 to 18 months.

We decided to raise on StartEngine and have raised over $1,000,000 from over 700 investors.

What were you able to achieve as a result?

BI: We were able to accomplish a few things:

• With the money raised, we transitioned our flagship product,Kara Pure, from v1.0 to v2.0. We’re excited about the release because we believe word of mouth will result in even faster growth.
• We expanded our team to establish consistency and build on the foundation our management team has laid over the last few years.
• We advanced the development of our new product, Kara Pod, a more affordable countertop version of our dispensers, which also makes coffee. We launched a reservation funnel while moving our prototype to beta and, soon, ready for manufacturing.

What’s one thing that surprised you about your experience with crowdfunding?

BI: Once we started to gain more traction, we generated conversations about larger investments from a broader audience of investors and have had inbounds from potential customers, increasing sales. Also, the public image and high number of investors have increased our grassroots momentum, with our networks wanting to provide more support.

What advice do you have for startups just starting a crowdfunding campaign?

BI: Crowdfunding is not easy and seems to require an existing audience. You must understand this audience well, just as you would work to understand your target audience for VC funding. Also, search for other successful companies and ask them about their experience and find companies that failed at crowdfunding to understand what they could have done better.

We were successful on launch because we established alignment among our team to get to the first milestone to access StartEngine’s network. We continued the momentum by adjusting our tactics and strategy through each stage of the crowdfunding raise, maintaining a consistent growth trajectory.   

Ensure that your books and records are in good standing. If your company needs some cleaning up, you can run a testing-the-waters funnel to gauge potential demand and develop a pipeline for launch while you bring on third parties to do the administrative work.