The Coven Launches Crowdfunding Effort
It’s gotten considerably harder to persuade venture capital firms and other traditional investors to open up their checkbooks this year, so one Minneapolis startup is turning to the community for help on a new funding round.
The Coven, an inclusivity-focused coworking company, this week announced plans to raise $2.5 million in a new seed funding round partially driven by crowdfunding. The startup has already landed $1.53 million through a set of traditional investors led by St. Paul-based F.R. Bigelow Foundation, but it aims to raise the rest through crowdfunding platform Wefunder.
Anyone that invests in The Coven through Wefunder will get a piece of equity in the company. The minimum investment is $100, said Bethany Iverson, co-founder and partner at The Coven. That’s far less than what an “accredited investor” would normally be required to provide, she noted.
“This allows everyday folks who believe in what we’re building to be a part of it,” she said. “It democratizes who can invest, and how much they can invest.”
The Coven is also offering additional perks for those investing larger sums of money, according to the company’s Wefunder page.
Crowdfunding isn’t entirely unheard of in the startup world. Back in 2021, local women’s soccer team Minnesota Aurora FC used the Wefunder platform to raise over $1 million. Wefunder, which bills itself as a public benefit corporation on a mission to “fix capitalism,” differs from platforms like GoFundMe, which don’t typically give equity to participating funders. Iverson said she knows one of WeFunder’s founders and has been tracking the company since its early days.
And The Coven’s founders are no strangers to crowdfunding. A few years back, the company used a different platform called IFundWomen to raise about $350,000 to open its first location.
Iverson expressed gratitude to the traditional investors who provided more than $1.5 million in The Coven’s most recent raise. That included local early stage VC firm Groove Capital, along with the Mortensen Family Foundation, Pablo Capital, Lightspeed Ventures, and New Age Capital. But she said that economic conditions have made it difficult to make it to get to her goal of $2.5 million.
“Closing the remainder of [this funding round] has been full of twists and turns,” she said. “Traditional investors are fairly shy right now when it comes to writing checks.”
But Iverson said she’s confident that Wefunder is a “viable path forward for us.”
To date, The Coven has raised about $3.4 million in total.
For now, The Coven operates two coworking locations: One on Nicollet Avenue in Minneapolis’ Eat Street neighborhood, and another in St. Paul at the corner of Western and Selby avenues. In late 2022, the company dipped into franchising. Its first franchised location, owned by Dogwood Coffee owners Dan and Angie Anderson, officially opens today, though it’s been open for member tours for weeks now.
The Coven’s coworking spaces are open to anyone, but the company tailors its programming and marketing toward women, non-binary people, and folks across the LGBTQ spectrum. “Women are leaving the traditional workforce to start more than 1,800 new businesses each day,” the company said on the Wefunder page. “They’re creating a new economy and are in need of a place to learn the ropes as they build and scale.”
Alex Steinman, one of The Coven’s other co-founders and partners, said she’s continuing to see memberships grow, though she declined to share specific numbers.
But she said there’s continued strong interest in team memberships, or bulk memberships for entire businesses. “I think it’s proving what we all guessed would happen with the real estate market,” she said. “A lot of people are releasing their traditional leases and looking for more flexible options that are affordable for their teams.”