Executive Briefing
The sketchy side of crowdfunding
Companies like Levels are asking consumers to invest — with a lot less information than VCs would demand.
By Dan Frommer on Monday, April 8, 2024 at 8:00 am
Levels, a startup that’s trying to consumerize blood-sugar tracking — and reverse the US metabolic health crisis — through software and sensors, is raising new funds at a $300 million valuation.
Usually, for a company at that stage, that means selling shares to venture capital firms. And Levels, which has raised almost $90 million over the past five years, according to Pitchbook, is no stranger to them: Top funds like Andreessen Horowitz and Founder Collective are already investors.
But in this case, Levels is asking consumers to invest in an extension of its Series A round, via the equity crowdfunding platform Wefunder. After launching its campaign last month, the company is approaching $2 million in commitments from more than 1,000 investors.
It’s a great example of the potential of equity crowdfunding: Offering individual consumers the ability to invest in a high-growth, high-risk, potentially high-reward company when they typically wouldn’t have access.
It’s also a great example of how, in practice, crowdfunding investors are at a real disadvantage: Levels is providing them with far less information about its business than professional investors would demand.
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