Sharedrops™

Thanks to regulatory changes in 2016, regular people––not just VCs and uber wealthy angel investors––can invest in private US companies. Prior to 2016, that meant less than 10% of US people could widely purchase shares in companies before they listed on stock exchanges like the NYSE or the NASDAQ, and founders couldn’t take investment or raise money from their company’s customers, users, or fans.

Using these new regulations, Republic registered with the SEC in 2016 and, in 2024, launched Sharedrops: an innovative product for regular people to receive shares by private companies in exchange for taking some kind of action or otherwise providing value to the company. These actions can be as simple as sharing an email address or downloading an app, which means companies can use Sharedrops™ by Republic to give thousands (or tens of thousands) of people a meaningful, long-term, financial incentive to help the company succeed––in the form of equity upside.

We saw that founders and business owners loved the concept so much that we even trademarked the name of the product: Sharedrops.

Companies have wanted to give away shares since the growth of the internet in the 1990s inspired companies to lean into community ownership, but there’s a reason it hasn’t happened at scale. In short, without Sharedrops by Republic, it’s almost impossible to get a private company’s shares into the hands of thousands of people, across dozens of countries, without navigating strict SEC securities rules or creating an enormous administrative hassle of tax paperwork or having thousands of people on a company’s cap table.

Here’s a brief history of household names trying to do equity giveaways but not accomplishing what Sharedrops can:

• TravelZoo tries a stock giveaway to website visitors in 1998 –– and faces SEC scrutiny afterwards
• Jet.com (now owned by Walmart) gives away 100,000 shares in a sweepstakes in 2015, but only to one loyal customer –– not hundreds or thousands 
• Robinhood popularizes stock giveaways starting in 2015 –– but not for private companies before they IPO
• Uber tries but fails to give its drivers shares pre-IPO in 2017 after meeting with the SEC 
• Airbnb attempts but fails to give host pre-IPO equity in 2018 after petitioning SEC
  

Equity can be distributed to employees, certain kinds of advisors and contractors, and investors, but there are strict regulations about how this kind of distribution can happen and important considerations around tax planning and guardrails for securities laws. Sharedrops extend the opportunity to more easily distribute equity to a broader community of supporters –– namely thousands of users, customers, or fans across more than 100 countries. Sharedrops is a way to better align companies with, arguably, their most important stakeholders: their users, customers, or fans.

It’s basically a regular person, both in the US and not. Technically, non-accredited investors are individuals who do not meet the SEC’s financial requirements for accreditation, restricting their access to most private investment opportunities. The overwhelming majority of the US (and the world) are “non-accredited” in the eyes of the SEC, and it’s almost impossible to give them equity without Sharedrops.

There are no minimum or maximum requirements to host a Sharedrop! Companies can easily offer up to $5M of equity to their US community, an unlimited amount to their non-US community, and an unlimited amount to their accredited US community.

Residents of over 100 countries, including the US and Europe, can participate in Sharedrops.

It’s simple: users create an account on Republic and take actions predetermined by the company running the Sharedrop to participate. The company can require actions like signing up with their product, downloading an app, or driving user referrals via their network. The Republic platform acts as the simple, online, and legal mechanism for the distribution of future equity or shares.

Republic’s innovative platform allows for companies to have investors represented as a single line item on the company’s cap table. We also partnered with Carta so that running a Sharedrop (or raising with Republic) doesn’t mean you have to pay annually for thousands of new stakeholders on your cap table –– it’s just one.

• Companies or brands that have a large community of users, customers, or fans that would like to engage with that community in a dynamic and innovative way. 
• Companies that are looking to acquire new users or customers with a dynamic and innovative campaign. 
• Companies that think it’s important to their mission have their community of users, customers or fans invested in their success alongside VCs or other investors. 
• Click here to run a Sharedrop.