Startups

Why veteran entrepreneur Jane Park chose crowdfunding to raise capital for her latest startup

Jane Park launching her new product at the Atlanta Gift Trade Show in August, featured on her first elevator ad. (Jane Park Photo)

When Jane Park launched Julep Beauty back in 2007, she needed to raise capital the old fashioned way: pitching to venture capital firms and other institutional investors. 

But now Park is turning to crowdfunding.

The veteran Seattle entrepreneur announced Friday her latest startup, a sustainable gift-wrap company called Tokki, is raising funds through an equity crowdfunding campaign on the investment platform StartEngine.

“I’ve raised money from traditional venture capital in the past, and it took thousands of dollars of legal fees and mountains of paperwork,” she said. “On StartEngine, the barriers to participation are so much lower. We can take investments starting in the hundreds of dollars, not hundreds of thousands.”

Park has been a longtime proponent of equity crowdfunding. She says the investment vehicle opens the door for broader participation in an early-stage startup’s upside, gives founders an alternative fundraising option, and allows entrepreneurs to connect with end users of their product or service.

“It’s really challenging to meet people in the VC world who are excited about the same things that I am as a consumer entrepreneur,” she said. “I don’t know how many VCs have gone out and bought gift bags in the last year, but I bet not that many.”

Park, who immigrated to Canada with her family at 4 years old, graduated from Yale Law School and became a Starbucks executive. She went on to found Julep, a Seattle-based physical retail chain and e-commerce brand. She raised more than $50 million for the cosmetic company from high-profile investors, including Andreessen Horowitz, Madrona Venture Group and Jay-Z’s Roc Nation.

In 2014 she launched her first crowdfunding campaign, setting out to raise $75,000 to gauge the interest of a product that helped customers apply nail polish. (Prior to President Obama signing the JOBS act in 2012, startups could not raise equity from non-accredited investors.)

Eventually, Julep was acquired alongside two other cosmetic brands by private equity giant Warburg Pincus in a deal worth $120 million.

In 2019, Park launched Tokki, a startup that sell eco-friendly gift wrap that is designed to be reused. It also features a QR code tag that gives customers the ability to record specialized messages. Up to this point, she has bootstrapped the company, pivoting during the pandemic to also sell face-masks.

Park has also worn the hat of an investor. In November 2021, she became the first Korean-American woman to take a company public as CEO on the NYSE, leading a special-purpose acquisition company called Athena Consumer. In July, the SPAC merged with Next.e.GO, a German electric vehicle company.

She first learned about StartEngine when she wanted to buy equity in Kari Gran, a Seattle beauty company run by CEO Lisa Strain. “It was as easy to buy shares of the company as it was to buy her skin care products online,” she said.

Launched in 2014, StartEngine is unlike Kickstarter and Indiegogo in that users can actually purchase equity in the projects they invest in. Founded by Activision Blizzard co-founder Howard Marks, and championed by SharkTank host Kevin O’Leary, the platform currently hosts 157 other startup fundraising campaigns, with industries ranging from real estate investing apps to tequila brands.

In order for Tokki to be approved to be featured on the platform, Park said, she had to go through a rigorous financial and legal due diligence process. But as a result of her efforts, users can now buy shares of the company from their phones. Through the crowdfund, the maximum Tokki will be able to raise is $1,235,000 per year. The startup is valued at $20 million and the minimum investment requirement in $250.

Asked why she is launching a crowdfunding campaign amid the broader market downturn, Park said she could not have forecasted the various forces pushing the economy in a downward trend when she launched Tokki three years ago. She argued that her customers will be eager to invest in a company that is developing a sustainable solution to single-use plastic waste.

In difficult economic conditions, she added, alternative fundraising options can be particularly important for minority-run companies. Black founders raised $187 million in VC in Q3, representing just 0.43% of the $44 billion deployed, TechCrunch reported. 

Park said she hopes that lowering the threshold of investment will allow for more women and historically underrepresented founders to be able to raise more capital.



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