A screen shot of Chimani’s equity crowdfunding campaign on Republic.

Two Maine companies are finding success in raising capital via online equity crowdfunding platforms.

Chimani, a mobile app developer that recently announced a major deal with Subaru, and Ocean Renewable Power Co., which has developed technology that generates electricity from ocean tides and river currents, are both in the midst of equity crowdfunding campaigns — and both have already succeeded in raising their respective target amounts.

ORPC, based in Portland, has so far raised $634,546, far surpassing its modest $10,000 target. Its campaign is scheduled to conclude June 14.

Chimani, based in Yarmouth, has raised $49,217 as of this weekend, nearly 200% more than its original goal of $25,000. Its campaign still has 77 days to run.

Both companies are using equity-crowdfunding platforms for their offerings. Chimani is on Republic, while ORPC is on Netcapital.

Equity crowdfunding, which involves selling equity to investors and so is distinct from the more common crowdfunding done via online platforms like Kickstarter, has only been available as a financing option for companies since 2016, when President Obama’s JOBS Act went into effect (though there is a little-used Maine equity crowdfunding program that went into effect in 2015, which I wrote about for the Portland Press Herald). Before the JOBS Act, private companies could only sell equity to high-net-worth individuals, known as “accredited” investors, while average people were not allowed to invest in startups.

The JOBS Act, specifically Title III, known as Regulation CF, allows early-stage private companies to sell equity to all Americans. Companies can raise a maximum of roughly $1 million in a 12-month period using equity crowdfunding, and investors are limited in how much they can invest. More details can be found on the U.S. Securities and Exchange Commission website.

Companies that pursue equity crowdfunding are subject to substantial disclosure requirements as part of the Form C they’re required to file with the SEC. ORPC and Chimani both have opened their books to access this financing option, including total assets, revenue, and outstanding long- and short-term debt obligations. ORPC’s Form C can be found here, while Chimani’s is here.

Kerry Gallivan, CEO and founder of Chimani, said that besides the capital the company’s been able to raise, the greatest value to the equity crowdfunding campaign has been increased exposure.

“We have 230 new investors who are also 230 new advocates for Chimani and whom are already opening up opportunities,” Gallivan told Maine Startups Insider.

For founders considering equity crowdfunding, Gallivan offers the following food for thought:

  • The strategy works well if companies have an existing user base to tap into;
  • founders should use it as just one piece of an overall fundraising strategy;
  • the Form C requirements for disclosure “are not for the faint of heart;”
  • and be sure to use a platform that includes all new investors as a single entry in the cap table.