Xero Shoes raises $1 million in equity crowdfunding campaign

BROOMFIELD — Feel the World Inc., which does business as Xero Shoes, has raised $1 million through its equity crowdfunding campaign.

The minimalist shoe company hit its goal on Wednesday night, CEO Steven Sashen told BizWest.

“Once we saw the $1 million in striking range, we were really overcome with two feelings,” Sashen said of himself and his wife and co-founder Lena Phoenix. “We felt a responsibility to our investors and we felt gratitude.”

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Xero started its campaign in April, where its maximum raise was $3 million. Sashen said the company set an internal goal that it knew it would be happy with: $500,000.

The plan was to keep the crowd funding campaign open in perpetuity and as new customers came into the fold they could become investors as well. But with no end date, donations came in slowly.

When the company hit the point where it would be content three weeks ago at $500,000, Xero announced that there would be three weeks left to the campaign.

“Within 24 hours we were at $624,000,” Sashen said.

When there were four-and-a-half days to go, Sashen sent out an email to those who had been interested in investing, and within 48 hours of that, they were at $800,000.

On Tuesday, another reminder email went out reminding potential investors there were 48 hours left. Sashen said 24 hours after that email was sent the company raised another $70,000.

It was Wednesday when the company broke $1 million, and Sashen expects to be at $1.1 million by campaign end. (Sashen spoke to BizWest before the official end point.)

“It seems with human beings, and we see this with product launches, that people like to wait til the end,” he said. “There’s no incentive to be the very first, so people like to see how it’s going before they get involved. The better it went, the more people jumped on board.”

Xero has been growing rapidly in the last few years — the company was recently on the BizWest Mercury 100 list. Sashen said the funding raised would go to expanding the company’s product line and inventory.

“We’re about to make a big purchase for Spring 2018 so most will go to that,” he said. “We also plan to bring additional staff and customer service to build our rapidly growing company.”

Xero could have raised its funds in a more traditional way, but Sashen said he loved the idea of the democratization of capital.

“Previously, to invest in an early stage company you had to be an accredited investor, which meant you had to be rich already,” he said. “But now anyone can be a part of it and we like that. You don’t have to make $250,000 a year to help a company you believe in.”

Sashen said they also decided to go the crowdfunding route because they knew they had the fan base where it would work.

“We knew we had a lot of fans and loved the idea that they could literally be invested in the future of our company,” he said. “They could be like brand ambassadors on steroids. They’re already out spreading the word about who we are, now they do that and they’re part owners.”

Rather than use one of the more popular equity crowdfunding platforms, Xero used a system called Crowd Engine, which meant Xero had no broker dealer network to help them. Still, the company was able to get approval to raise in all 50 states — even ones with very strict rules like Texas and Florida, Sashen said. He added that doing it that way was more difficult than the company originally thought, but that doing things out of the box is the Xero’s way.

“We’re running a company at the time where the possibility to raise money like this is fortuitous,” he said. “It fits in with our iconoclastic culture. We’ve been bucking a 45-year trend in footwear. And now as a company, we’re bucking the trend in investing of having to go through Wall Street. We’re excited the whole thing came together. Also, in the time we’ve been talking we raised another $3,000.”