Does Testing the Waters (TTW) Improve Offering Success?

CHART OF THE WEEK 📈

By Brian Belley | Read

Does Testing the Waters (TTW) Actually Boost Offering Success?

Testing the Waters (TTW) can be a double-edged sword; while a company that is using TTW can collect investor "reservations" before incurring any up-front expenses, we often see a drop-off in investor commitments once a raise goes live. Sometimes, the final capital invested ends up being less than what was originally reserved — by as much as 70% less in the most extreme cases!

In this chart of the week, we analyzed the data to see if we could glean any trends in terms of whether TTW offerings ultimately end up being accurate predictors of the final capital invested.

We took a close look at 14 TTW offerings that converted to live raises across Wefunder and StartEngine over the past two years. Our analysis reveals an intriguing difference: Wefunder campaigns often end up near the same amount they reserved during TTW, while StartEngine campaigns more often climb to 200%–600% of their initial reservations.

Here’s a quick glimpse at the final (or current, if still live) amount of capital raised as a percent of the TTW amount reserved across Wefunder and StartEngine:

The data have various lessons that both founders and investors can learn.

Want the full story and takeaways? To view the complete analysis, as well the interactive chart and complete data, read the full article for free on Kingscrowd HERE.

INVESTMENT ROUNDTABLE

By Sam Fiske / Watch

This week on Investment Roundtable, we break down two observations in the crowdfunding space:

Campaign Failure Rates – StartEngine had 17 out of 25 campaigns to fail in recent weeks, which seems to be tied to its minimum funding requirement. Is this a smart investor protection strategy or an extra fundraising hurdle for founders?

Top Crowdfunding Platforms for Startup Investing by Deal Quality – We analyzed deal ratings across the biggest platforms to find out which platforms attract the best investment opportunities.

Join Brian, Léa & Scott for this week’s episode and get the latest data-driven insights.

INVEST IN KINGSCROWD

Kingscrowd is on a mission to empower everyday investors with data-driven insights into the private markets—and now, you have the chance to invest in us!

Our raise is live on StartEngine, and we’d love for you to check out the details of our offering.

🔎 Why Kingscrowd?

✅ The first comprehensive ratings & analytics platform for startup investing
✅ A proven track record of helping investors navigate the private markets
✅ Positioned for growth as the equity crowdfunding industry expands

Becoming a shareholder means joining us in shaping the future of startup investing.

PITCH REVIEW 💸

By Teddy Lyons \ Deal Report

Brief: HouseKeys  is a California-based company dedicated to administering affordable housing programs on behalf of local governments and real estate developers. Through a proprietary platform and service model, HouseKeys manages critical processes – from qualifying applicants to ensuring compliance with inclusionary zoning laws and fair-housing rules – for 23 municipalities and over 40 homebuilders​. The company has facilitated more than $5 billion in real estate projects and generated $19 million in cumulative revenues to date​, illustrating strong traction in its niche. HouseKeys operates in a growing market of ~$2.3 billion annually driven by inclusionary housing policies across 31 states​. Its high-margin, scalable platform offers a chance to capture an increasing share of municipalities seeking third-party administration of affordable units. The current raise could enable HouseKeys to extend its services into new regions (e.g., target markets in California, New Jersey, Florida, Illinois, and enhancing its software).

Key People: Julius Nyanda (Founder & CEO): Julius is the driving force behind HouseKeys, bringing over 3 decades of experience in technology and housing policy​. Prior to founding HouseKeys, he served as Chief Business Officer at Neighborhood Housing Services Silicon Valley (NHSSV), a major affordable housing nonprofit lender​. In that role, he managed a 22-person team spanning mortgage lending, real estate brokerage, housing counseling, and crucially pioneered third-party program administration services for local governments and developers​. 

Kunal Bohra (Lead Engineer): Kunal heads the development of HouseKeys’ software platform​. He has a robust background in enterprise software and “civic tech,” aligning well with HouseKeys’ needs. Kunal previously worked as a software engineer at CancerLinQ (a health data startup) and as a development engineer at Jopari Solutions​.

Here's what we like: HouseKeys has demonstrated solid financial performance, with revenues growing to $3.23 million in 2023​ at 93% gross margins. The revenue model is a mix of recurring contracts with municipalities and fee-based income from developers. According to the company, roughly $2 million per year comes from recurring agency contracts, while about $1 million comes from homebuilder fees tied to transactions (e.g. when an affordable unit is sold or rented out)​. This blend provides both steady income and growth potential as more development projects come online. Since its inception, HouseKeys has accumulated $19 million in total revenue​. A notable milestone in 2023 was HouseKeys achieving positive net income. The company reported net profit of ~$357.7K in FY 2023, a sharp improvement from a net loss of ~$937.5K in 2022​. HouseKeys’ revenues are largely contract-based and recurring in nature, which adds stability. 

Here's what we don't: HouseKeys’ core business relies on the existence and enforcement of affordable housing regulations (e.g. inclusionary zoning requirements). Changes in the regulatory landscape could significantly affect demand for its services. For example, if a major city were to repeal or weaken its inclusionary zoning laws, the need for a program administrator might diminish. Conversely, some states have laws that preempt or restrict inclusionary housing at the local level – expansion into those regions would be infeasible until legal frameworks change. There’s also the risk of shifting political winds: affordable housing programs might suffer funding cuts or deprioritization under different leadership. Another risk is a failure to expand beyond its initial market. Perhaps outside of California, municipalities prove reluctant to outsource their affordable housing programs, preferring to keep things in-house or use incumbent local nonprofits. Each state has its own housing ecosystem, and HouseKeys may find it challenging to break in – for example, New Jersey has many decades-old affordable housing agencies due to its Mt. Laurel doctrine; Florida’s inclusionary efforts might be weaker or face political pushback, etc.

STAFF PICKS 🌶️

Biostate AI

Biostate AI is pioneering AI-driven health prediction, using proprietary RNA sequencing and machine learning to detect diseases before they emerge and personalize treatments based on genetic data. The company has analyzed over 8,000 biological samples and collaborates with top institutions like Harvard Med School, Cornell, and MD Anderson. With a portfolio of twelve pending patents, Biostate AI is now raising funds on Wefunder to expand R&D, lab operations, and marketing.

• Valuation Cap: Uncapped

• Minimum Investment: $100

Rubitection

Rubitection is advancing AI-powered wound and dermatology care with its skin health management platform, designed to assess and manage chronic wounds like diabetic foot ulcers and bedsores. The company has received multiple industry awards and collaborates with clinical partners such as Baylor School of Medicine.

• Valuation Cap: $10 million

• Minimum Investment: $100

Diem

Diem is an AI-powered social search engine designed for women and gender-expansive individuals, fostering community-driven conversations. The platform has scaled its user base by 1,100% in just 13 months and has partnerships with organizations like Bumble, Meta, and the National Domestic Violence Hotline.

• Valuation Cap: $14.8 million

• Minimum Investment: $100

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