$1,070,000 raised from 2,117+ investors and an oversubscribed waitlist with massive commitments. In the words of Dawn Dickson: “When they don’t give us a seat at the table, we bring our own.” And bring her own is exactly what Dickson has done.
Dickson, known for her inspirational work as a serial entrepreneur over the years has become notably popular recently for raising capital through crowdfunding means. However, she has been no stranger to the tech industry. After going to school for Information Technology (IT) and serving in the tech field collectively for nearly two decades, Dickson has uncovered some amazing insights during her journey as a tech enthusiast turned thriving entrepreneur.
More specifically, in an industry where minority tech entrepreneurs have historically had difficulty gaining access to venture capital funding, Dickson’s story serves as an example of the profound impact different funding opportunities can have on those at the margins of access.
Founding PopCom: A Vision within a Vision
In Dickson’s most recent endeavor, the founder created PopCom, a hardware organization founded due to a pain point she experienced during the conception of an earlier company called Flat Out Heels in 2011. Flat Out Heels was designed as a result of Dickson’s vision to “sell shoes in vending machines.” The innovative idea faced one major hurdle though, Dickson found it difficult to find a company that would build hardware to support selling the shoes. This led Dickson to launch PopCom, the first hardware shoe vending machine, in an Atlanta Airport.
Subsequently, she realized she was unable to collect data from the machine and given that collecting data was a pivotal part of her strategy for better learning about and meeting the needs of customers, she re-launched PopCom as a software company in 2017. Since then, PopCom has been building software for the self-service retail industry—including its most recent hardware creation PopShop—using face recognition, artificial intelligence, and more.
Funding PopCom: The Power of Crowdfunding
After founding any new endeavor, like PopCom, Dickson highlights that Black tech entrepreneurs often face difficulty raising money to launch and grow their companies. With the historical wealth of Black families being nominally low compared to their more majority counterparts and pattern matching often leaving Black founders out, the venture funding landscape has traditionally been a major obstacle. Even more so, Black founders have often found themselves at a greater disadvantage during the friends and family round which is supposed to be the first launching pad for funding opportunities.
Dickson notes that for her very first business, her family was unable to help her raise enough capital compared to her counterparts who had traditionally been able to raise a large friend and family round. “Not many of us have friends and family that can drop checks for $40k to $50k, $100k, or a million dollars,” said Dickson. To shift this paradigm, Dickson’s belief has been to raise from her friends and family, which she perceives as her greater community. In the words of former President Barack Obama and renowned author Alice Walker, Dickson believes that “we are the ones, we have been waiting for” and has shared that: “the friends and family are us. It’s crowdfunding. So I thought let me go work to raise it from the community.”
Bringing Money Back to The Community
Dickson’s endeavor has aimed to bring some of the funding back to the community. Especially as she highlights that an ongoing topic of conversation for quite some time has been hyper-consumerism within the Black community, and how quickly disposable income leaves the community. The lifespan of a dollar that stays in Black communities is approximately six hours, meanwhile, Black buying power is $1.2 trillion annually.
Dickson now serves as the first Black founder in history worldwide to raise the highest secure token offering (STO) crowdfunding round from the general public. And as a by-product has contributed to increasing the lifespan of the dollar and bringing back wealth to the Black community. In her words, the PopCom founder shares: “I used my own company as a guinea pig and it worked. It could have gone either way, it could have possibly not gone well. But it worked because I knew it would work, and I know that we’re better than they want to play us. I know we’re smart enough to invest in something.”
With her goal to show that it can be done, through crypto, her community has rallied behind her and challenged themselves to learn about something they previously had not known about.
The STO Crowdfunding Option That’s Fueling PopCom
After raising roughly $1 million from venture capitalists, Dickson endeavored to raise money through alternative means. In the venture capital space Initial Coin Offerings (ICOs) had gained a lot of traction from venture capitalists and the general public, however, were riddled with scams that put investors at risk. Prior, ICOs had presented non-regulated 9-figure investment means with 1,000 times worth the potential returns. Given the decline of ICOs, the Secure Token Offering (STO) has been on the rise. By 2020, STOs are estimated to grow up to $10 trillion as a global alternative for private equity and venture capital financing.
The benefits of going the route of an STO is linked to “greater separation of speculation from utility and stronger regulation,” said Dickson. STOs have provided investors with the opportunity to receive grants or dividends for voting power in a security token granted through the company’s assets allocated as shares. Financial regulators consider them securities, which prove to be a safe and solid investment for the token as holders are given real rights.
There are two types of STO investors, accredited or non-accredited investors. PopCom has endeavored to welcome both investor types. Accredited investors from the general public file using an exemption called Regulation D 506(C), which is a public security offering for those with an annual income of $200,000 or more for the past two years—$300,000 in combined income for spouses—or a net worth of $1 million plus. Accredited investors are asked with verifying accreditation prior to participating in the STO. And non-accredited investors from the general public can participate in the offering under the Regulation Crowdfunding (CF) option with the caveat that the STO is limited to a $1,070,000 cap. With a growing waitlist, PopCom has reached that cap.
As Dickson shared:
“By tokenizing our cap table we now have a more flexible version of regular securities — and blockchain offers a unique and highly-efficient medium for ownership and trading of digital tokens that can represent securities.”
Further, as Dickson expressed, to follow this method there are a plethora of filings required. However, when comparatively looking at this funding process versus traditional funding mechanisms, the process is much cheaper. Traditionally to raise a round of venture capital funding, founders must hire a lawyer, and so much more. “On the lower end of the spectrum, hiring a lawyer alone can cost founders from $10,000 to $100,000 in lawyer fees,” said Dickson.
STOs present a much cheaper way to raise funding. Founders must go through background checks such as a KYC, which means know your customer, and AML, meaning anti-money laundering. The U.S. Securities and Exchange Commission (SEC does those checks among other background and bad actor checks to ensure the founder and investors are protected.
Dickson’s Hope for the Future of Crowdfunding & Black Tech Entrepreneurs
In order to shatter the glass ceiling and increase opportunities for other founders to raise more funding than Dickson has, the founder notes that: “the SEC would have to change the laws.” Her ultimate goal is to work with the SEC to try to get the laws changed, in order to allow future founders to raise $5 to $10 million, or more from their networks and/or communities.
To share her journey with fellow founders who seek to learn more about the process and utilize crowdfunding as a major funding mechanism, Dickson has created a blog on Medium.
In closing the PopCom founder has said: “the process is not simple nor has it been easy to understand. There are no handouts or shortcuts, but there’s hard work and a willingness to learn.” Dickson acknowledges that so many have come before her and before entrepreneurship or the term Black tech entrepreneur reached the mainstream. Therefore, her vision is to serve as an advocate for those who came generations before and share her story to pave alternate pathways to success for future generations. She is the first Black woman worldwide to raise a successful secure token offering (STO) in history.