"Citizinvestor was an online crowdfunding platform specifically focused on raising money for public projects and community infrastructure"

Micah Sifry writes at Civicist:

Sometime this past June, the civic tech crowdfunding platform Citizinvestor quietly shut down. The start-up had tried to fill a tricky niche in the crowdfunding ecosystem, connecting bottom-up ideas and funding for local neighborhood projects with the municipal government authorities needed to make those projects viable. Think of it like a Kickstarter for civics, with a focus on projects with local government support. On its launch back in mid-2012 Fast Company gave Citizinvestor a nice write-up, as did our old site techPresident. The platform also got some media attention when a bankrupt town, Central Falls, Rhode Island, started using it to try to raise money to buy materials to help clean up its main public park. While that crowdfunding campaign was underway, the users independently organized a clean-up for the park and 100 people showed up out of a population of less than 10,000.

Over the course of its run, Citizinvestor hosted a total of 76 projects, of which just over half, thirty-seven, got funded. A total of $339,315 was pledged to projects on the site, of which $282,737 or about 83%, was collected and disbursed. About 1,400 people gave to a Citizinvestor project, making an average contribution of a little more than $300 each, according to a spreadsheet the company's co-founder Jordan Raynor shared with me. Typical projects were modest efforts like a tree planting or park improvements like a dog run or a playground. Raynor and Tony DeSisto, Citizinvestor's other co-founder, were the two full-time staff, and they also employed a few salespeople who worked on commission and some developers who worked part-time. They paid themselves by taking a 5% fee from successfully funded projects and another 3% for the Amazon payment service. An angel round of $150,000 gave Citizinvestor its first boost in early 2013, according to Crunchbase, and another $100,000 in a seed round came in two years later.

Citizinvestor had energetic leadership—Raynor worked in the Bush White House's office of political affairs and did a stint as a VP at the Republican tech firm Engage LLC, while DeSisto was the vice chair of the city of Tampa's citizen advisory budget committee. And it had a timely idea. But despite that, Citizinvestor is now in the civic tech graveyard. It is buried there alongside dozens of other start-ups that managed to get past being hobbyists' side projects and raised money, earned press attention and garnered users, but still ran aground. What went wrong? DeSisto says he and Raynor decided to shut Citizinvestor down because "it didn't scale the way we wanted and couldn't sustain itself." Even before this decision, both co-founders, he notes, had already moved onto the other projects and weren't able to give more guidance to the CEO they hired.

Citizinvestor also took too long to figure out who its real customers might be. DeSisto says, “We overestimated the pace at which it would scale, and needed more seed funding to build to capacity. We also introduced our white labeled product too late.” That was Citizinvestor Connect, which he says four municipalities bought and which offered a more interactive approach for proposing projects and a better back-end for municipal staff helping to manage them. “While we were getting traction with municipalities, we were a long way off from 5% of project being enough to bring in any substantial revenue. We needed either, funding to get us to the next phase, or an additional revenue source, like the white label product, or more likely both to be successful.” He added that not launching the Citizinvestor Connect platform sooner was “a big mistake” because in retrospect “this was our most likely path to success.”

It's wonderfully helpful to get this kind of candor from founders. While Citizinvestor was up and running, Raynor shared much rosier metrics. Back in 2013, he told Sam Roudman of techPresident that the company was working with nearly 100 municipalities to help push projects, and in their first year of operation about 70% had been funded. In fact, according to the internal project spreadsheet Raynor gave me, in its first year (from September 2012- September 2013) Citizinvestor formally hosted 19 municipal projects from 16 cities, and 13 of those 19 (68%) were successfully funded, to the tune of just under $80,000 in all. Considering that Raynor and DeSisto were only paying themselves 8% of that total, at that time they were very bravely anticipating growth that they never achieved. (In their next full year, Citizinvestor projects took in $77,000, and in its third and last robust year of operation, $106,000.)