MainVest

High-Level Overview

MainVest was a financial technology company that operated a crowdfunding platform enabling everyday investors to invest directly in local small businesses, primarily brick-and-mortar enterprises across the U.S. Its platform facilitated access to capital for small business owners who often lacked access to traditional venture capital or bank loans. MainVest served both entrepreneurs seeking growth capital and community investors looking for tangible, passive-income opportunities. The company structured investments mainly as revenue-sharing agreements with set maturity dates, supporting diverse businesses from bakeries to breweries. Over its operation, MainVest helped raise over $100 million from more than 10,000 investors, boasting a repayment rate exceeding 96%, reflecting strong growth momentum and community impact[1][2][4].

Origin Story

Founded in 2018 by Felix Le Dem, Ben Blieden, and Nick Mathews, MainVest emerged from a desire to democratize investment in small businesses and empower local economic development. The founders brought experience from tech giants like Uber and Google, as well as financial expertise (including a CFA credential). The idea was to connect everyday Americans with small businesses that traditionally struggled to access Wall Street or venture capital financing. Early traction included a robust vetting process and social underwriting, requiring businesses to raise initial funds from their personal networks, which helped reduce defaults and build accountability. This community-driven approach was pivotal in establishing trust and scaling the platform[2][4].

Core Differentiators

• Unique Investment Model: MainVest used a revenue-sharing note structure rather than traditional equity or debt, aligning investor returns with business performance.
• Rigorous Vetting and Social Underwriting: The platform conducted background checks, continuous risk reviews, and required businesses to raise at least $10,000 from their personal networks to ensure accountability.
• Community Focus: It empowered local investors to support and benefit from their communities’ economic growth, targeting female and minority entrepreneurs often underserved by conventional lenders.
• Strong Performance Metrics: MainVest’s portfolio had a default rate 75% lower than the 10-year SBA average and a business closure rate one-tenth the national average, even through pandemic challenges.
• Compliance and Technology: Leveraged regulatory frameworks like RegCF under the JOBS Act and partnered with compliance platforms (e.g., Hadrius) to streamline SEC and FINRA obligations[2][4][6].

Role in the Broader Tech Landscape

MainVest rode the growing trend of democratizing investment and community-driven economic development, leveraging fintech innovations and regulatory changes (RegCF) to open new asset classes to retail investors. The timing was critical as small businesses faced unprecedented challenges during the pandemic, supply chain disruptions, and inflationary pressures, increasing the need for alternative capital sources. By focusing on local markets and social underwriting, MainVest created a more efficient and resilient capital access model that outperformed traditional SBA lending. Its approach influenced the broader ecosystem by demonstrating how technology and community engagement can unlock capital for underserved small businesses, fostering local wealth building and economic resilience[1][2][4][6].

Quick Take & Future Outlook

As of June 14, 2024, MainVest ceased operations due to challenges including the collapse of a backend service provider and a difficult capital environment, despite a strong mission and promising performance metrics. Looking forward, the model pioneered by MainVest—community-driven, revenue-sharing investment platforms for small businesses—remains highly relevant. Future platforms may build on MainVest’s lessons, focusing on compliance efficiency, social underwriting, and technology-enabled local investing to further democratize capital access. The ongoing trend toward decentralizing investment and empowering local economies suggests that MainVest’s influence will persist in shaping fintech solutions for small business funding[3][5].