Shoppers Become Shareholders with iConsumer: A New Business Model Rewards Buyers with Cashback & Stock in its Company
2.8.17 Online Shopping

Shoppers Become Shareholders with iConsumer: A New Business Model Rewards Buyers with Cashback & Stock in its Company

By: Adam West

The Crunch: A revolutionary new cashback shopping platform, iConsumer rewards customer loyalty by turning its users into stockholders. Every time someone makes an online purchase with one of the company’s more than 1,700 partner retailers, they not only receive cashback, but they also earn shares in iConsumer. The innovative business model allows ordinary consumers to invest in a promising new startup they help build simply by shopping and sharing. At the same time, iConsumer boosts revenues for retailers by connecting them with a new base of customers who are incentivized to be high-volume shoppers.

While the 2016 election highlighted how bitterly divided Americans are over politics, it also showed that people on both sides of the ideological spectrum have one thing in common: a sense of disenfranchisement. Most of this discontent is based around economic issues.

Income inequality is at its highest levels since the Great Depression, jobs are being transferred overseas, and wages for the vast majority of Americans are stagnant despite a rise in worker productivity.

Things are particularly stressful for millennials, many of whom came of age following the Great Recession. A nationwide poll of millennials found that 78 percent are worried about finding good-paying jobs, 59 percent worry about paying back their student loans, and 79 percent are worried they will not have enough money to live on when they retire.

Portrait of Rob Grosshandler, Founder and CEO of iConsumer

Rob Grosshandler, Founder and CEO of iConsumer, incentivizes online shopping by rewarding consumers with stock in his company.

As the father of a college-aged daughter who shared these fears, Rob Grosshandler wanted to ease her worries, so he used his experience as a successful entrepreneur to start iConsumer, an innovative company that puts power back in the hands of everyday consumers by allowing them to invest in a startup without risking any money.

“We’re building the company on the premise that ordinary people — the 99% — should have access to the startup economy,” Rob said.

Started in 2015 and SEC-qualified on Feb. 8, 2017, iConsumer is a one-of-a-kind cashback shopping platform that offers users amazing savings through coupons and cashback, while also giving them stake in the company. Every time someone makes an online purchase at one of the site’s more than 1,700 partner retailers, they not only earn cashback, they earn shares in iConsumer.

A Startup that Makes Partners out of Retailers and Consumers

Rob said iConsumer got started in “the right place at the right time” and points to several events that helped drive the company’s creation and growth. Foremost was the JOBS Act passed by Congress in 2012.

This legislation loosened restrictions on small businesses seeking to raise capital, allowing unaccredited (not wealthy) investors to become shareholders in startups. Previously, only accredited investors (individuals making more than $200,000 a year or possessing a net worth in excess of $1 million) could own startup stock. Then, in 2015, the SEC issued regulations governing the JOBS Act that enabled entrepreneurs to raise startup funding over the internet using crowdfunding.

These developments paved the way for iConsumer’s business model.

“Congress made crowdfunding a startup possible,” Rob said. “The SEC’s rules made it practical. We turned it inside out by making every customer a shareholder.”

Crowdfunding through platforms like Kickstarter and Indiegogo has rapidly grown in popularity. These businesses engage in “rewards-based” crowdfunding, which allows people to invest in a company in exchange for a product or service, rather than a financial return. iConsumer, on the other hand, uses “equity-based” crowdfunding, which enables people to acquire equity shares in a company in exchange for shopping on the site and sharing it with others.

Even though they operate differently, Rob said the popularity of these companies helped set the stage for iConsumer by familiarizing people with the crowdfunding concept.

“One factor that has gone into iConsumer’s creation is the huge popularity of crowdfunding,” Rob said. “Sites like Kickstarter and Indiegogo have made many people aware of the fact that what they do can make a difference in the launch of new products. Now, we’re using crowdfunding to make it so ordinary people can become shareholders in a startup.”

Individuals Earn Stock and Cashback While Shopping

The brilliant thing about iConsumer is that it lets customers become shareholders simply by shopping. Like other cashback portals, iConsumer partners with thousands of brands and retailers — Nike, Target, Apple, Expedia, Best Buy — and its users earn cashback whenever a purchase is made through iConsumer’s website, mobile apps, or browser add-ons. On top of the cashback, however, iConsumer is the first company to give members equity shares for each of their transactions.

The number of shares received is equal to the amount of money earned in cashback, so if someone gets $5 in cashback, they also receive $5 in iConsumer stock. In addition to shares earned by shopping, users also earn 100 shares just for registering as an iConsumer member as well as 100 shares when a referred friend makes a purchase.

Rob believes that iConsumer’s business model will revolutionize startup financing.

“We’ve created a platform that people who may have never thought they could become shareholders in a startup can participate in — and they can do it without cash,” Rob said.

iConsumer Sends Retailers High-Volume Purchasers

iConsumer not only offers consumers a unique way to invest in a startup, but it’s also boosting revenues for retailers by connecting them with a new base of high-volume shoppers.

Through traditional affiliate marketing technology, iConsumer drives customers to its partners’ online storefronts. To become an iConsumer partner, retailers simply submit an application, and once approved, they’re listed both alphabetically and by product category on the company’s website and apps.

iConsumer works with several popular affiliate marketing networks, such as Commission Junction, ShareASale, and AvantLink, to track customer traffic and transactions. Because they earn shares with each purchase, retailers can rest assured that iConsumer members are highly motivated to shop. What’s more, since they earn additional shares for referring friends, members are also incentivized to recruit others and become brand champions.

Screenshot of browsing stores on iConsumer

Users of iConsumer earn cashback and stock on purchases from more than 1,700 retailers.

“We cater to a class of customer that is very committed to being a participant in the process,” Rob said. “Our members actually get to change the trajectory of our company because they own a part of it — the more they shop, the bigger their stake; the more friends they refer, the bigger their stake.”

A Family Dinner Inspires a Movement that Educates and Empowers

Rob came up with the idea for iConsumer after having dinner with his 23-year-old daughter and one of her friends. During the meal, the millennials expressed concerns about their future that many people their age share: Would they be able to find good-paying jobs? Would they be able to pay off their student loans? As a father, Rob naturally wanted to help.

“What I learned was they felt disenfranchised,” Rob said. “They didn’t believe they had a stake in the game going forward, and I wondered how I could fix that.”

He decided to use the resources and relationships he developed founding the successful e-philanthropy platform, iGive, to come up with a new business venture that would enable them to become more financially empowered.

“I thought that maybe I could give folks like them a piece of the future — a stake in a new company,” Rob said. “I wanted to provide them with the opportunity to see a business they helped build grow into something important and valuable. And that’s how iConsumer was born.”

Because most people have little experience with startup investment, the iConsumer team launched the Shareholder Academy to provide members with the knowledge and tools they need to become smart investors. The academy’s website features a diverse assortment of informative articles that offer easy-to-understand explanations of key investment concepts and terminology, such as SEC qualification, crowdfunding portals, IPOs, dividends, and trading startup stock.

Screenshot of the Shareholder Academy homepage

The Shareholder Academy was designed to educate iConsumer users, who might be first-time investors.

Rob said the academy is designed to educate and support iConsumer shareholders, so they can more effectively wield their new power as startup investors.

“The Shareholder Academy helps iConsumer shareholders understand why the company is growing and why it’s successful, giving them the ability to better take advantage of their position as economic players,” Rob said.

iConsumer Gives Users a Chance to Grow Alongside the Company

In addition to the JOBS Act and the growth of crowdfunding, iConsumer has also been given a boost by business-themed reality shows like “Shark Tank” and “West Texas Investors Club.” According to Rob, these shows get people excited about entrepreneurism, which can inspire them to use iConsumer to get in on the action themselves.

“‘Shark Tank’ is great because people get to watch and learn about launching a startup with a sense of voyeurism,” Rob said. “iConsumer takes that one step further by allowing people to not just learn about startup investing, but actually participate in it.”

Screenshot from iConsumer promotion

iConsumer’s goal is to bring startup investing to the 99% through everyday purchases.

Giving more people the opportunity to participate in the startup economy is the heart of iConsumer’s mission. The company seeks to “democratize” the investing experience, so the 99% can reap the same rewards as the wealthy, Wall Street class.

Rob believes loyal customers are the most important factor in driving a company’s growth, so it only makes sense that they too should share in the company’s success by becoming shareholders. Indeed, iConsumer’s motto is “Ownership is the ultimate loyalty program.”

“Consumers — if they know it or not — help companies grow big, go public, and become very valuable,” Rob said. “We at iConsumer believe those customers should be rewarded for their contributions.”