A new second-division women's soccer team in the Twin Cities has reached the funding milestone of $1 million and will start playing in May.
The leaders did not find a few wealthy individuals to fund the team, though. Instead, they crowdsourced their way to enough money.
"We're normal, everyday Twin Cities businesspeople," president and co-founder Andrea Yoch said. "We had this idea of building it together without giving over control to someone who wrote a check for a million dollars. The moment you have someone write one big check, they become the biggest voice in the organization."
The Minnesota Women's Soccer Team, operated by Minnesota Soccer Holdings in St. Paul, becomes the first independent women-led team to take the fan-based funding approach.
The team will be part of a new pre-professional amateur women's soccer league kicking off in 2022. Minnesota will be home to one of the eight original franchises in the United Soccer League Women's League (W-League).
The league will provide opportunities for college players to develop during the spring and summer and potentially become a pipeline to the National Women's Soccer League, the top professional league in the country. Elite youth players, aspiring professional players and former professional players will also be eligible to play.
All of the community shares available were sold during the Wefunder campaign, which began in August and closed Dec. 6. A total of 3,080 people invested in the team from 48 states, eight countries, two military bases and one embassy, the team announced.
The average investment was $324.67, but the majority of investments were made at the $100 minimum level, Yoch said.
Those who bought shares can sell them following a one-year holding period. Some of the perks of being an investor in the team include having a vote in deciding the team name, free merchandise and season tickets, depending on the number of shares owned.
A fan-owned approach has been done before in sports. The National Football League's Green Bay Packers have operated as a community-owned nonprofit since 1923. The team has about 361,300 owners.
An online funding campaign to finance a sports team, however, is fairly new.
Yoch and her co-founders modeled their strategy after professional soccer teams across the globe, in particular a soccer team in Detroit. Last year, Detroit City Football Club raised close to $1.5 million through a campaign on Wefunder.
Minnesota Soccer Holdings is one of several Minnesota companies choosing a community investment model to finance their launches. Last year, there were 341 community-funding campaigns in Minnesota that raised a total of $7.7 million. Of the total campaigns, 49% reached their goal, according to Crowd Data Center.
Gaming, design, fashion and technology were the top four categories for campaigns in Minnesota last year, with gaming taking the largest slice of the pie at $3.8 million through 36 campaigns.
Overall, organizations in the U.S. raised more than $239 million through crowdfunding in 2020, up from $134 million in 2019, according to California-based Crowdfund Capital Advisors.
Using a community investment model also gives the soccer club a built-in fan base once the season begins, Yoch said.
"That's a model in sports that we think is going to be really important for people to feel engaged and to be a part of what we're building," she said.
Team owners are in the process of deciding the final team name, which will be revealed in January. Once the team name is chosen, the organization can move forward with designing advertising placements on its jerseys, an important revenue stream for the new company, Yoch said. Twin Cities Orthopedics and Explore Minnesota have signed on to be the team's first two founding sponsorship partners.
In addition to sponsors, tickets and merchandise sales and brand integration on livestreamed games will also serve as a revenue generators for the team, Yoch said.
With the Minnesota Women's Soccer Team competing at the amateur level, players will not receive a salary. The raised capital will fund coaching salaries, registration costs, jerseys, equipment, transportation and renting a field. The capital will also be used to cover housing costs for players, Yoch said.
Nicole Lukic was recently named head coach for the new team. Lukic is director of operations at Twin Cities Rush Soccer Club. She played collegiately at the University of Wisconsin-Milwaukee. Former University of Minnesota soccer players Jennie Clark and Jen Larrick will be assistants.