New startup Wahooly turns social influence into equity. Wahooly users leverage their social networks to promote early stage startups and in exchange, they get a stake in the company.
Effective e-businesses address an unmet need, but smart ones find two needs, fit them together and get a business model. Wahooly has positioned two such needs: savvy Internet users who would invest in new businesses but don’t have the capital; just-hatched startups who need publicity or brand ambassadors - they’re most likely cash-strapped too. These two groups together can help each other out, and that’s what Wahooly is about. While large brands can spend thousands on ad campaigns to boost brand advocacy, Wahooly members leverage social networking to give small sites the boost they need in users, tweets, and other marketing currency. In turn, they receive equity and a stake in the company.
Wahooly members support the startups that interest them and become shareholders
New services contact Wahooly, who interviews them to determine potential and negotiate the equity percentage that Wahooly will distribute to its members. Over the course of the year, Wahooly sends its members 200 startups, and each decides whether or not to sign up to become a user for one site or another, or all of them. In their example, 5.000 members who signed on as users share 5% of company equity. Then, as a shareholder, each user can vie for a larger portion of that 5% by activating her own social network and becoming a brand advocate. This portion is derived algorithmically and each shareholder tracks their status on their own dashboard.
Members also get Wahooly to “eat their own cooking”
With a starting membership goal of 250,000 members, Wahooly is also offering a share of itself - and staying consistent with their mission statement. In order for their service to be trenchant, they need to attract a member base with social clout, and co-founder and CEO Dana Severson explained that they have done just that in a Google Plus post: “as of today, our users (combined) are in the 90th percentile of online influence. They're currently made up of celebrities, tech reporters, bloggers, CEO's and extremely active social users.” Recently partnered with Klout, Wahooly seems to be benefitting from their early membership deal for those with high Klout scores.