In Bid to Go National, Court Innovations Launches Capital Campaign

1/31/2017

Court Innovations, a startup spun out of the University of Michigan’s law school, has steadily grown since it publicly launched in 2015. The company, whose software helps people resolve traffic tickets and other minor civil infractions online or via smartphone app, is using an innovative new model to raise capital as it prepares to expand.

According to CEO MJ Cartwright, “well over 10,000 cases” in more than 20 courts across Michigan and Ohio have so far been resolved through Court Innovations’ Matterhorn platform. Routine cases that used to eat up more than two hours of staff time apiece when handled the old-fashioned way are now completed through Matterhorn in an average of 27 minutes, Cartwright says. She adds that 92 percent of tickets are paid within 30 days, as opposed to 51 percent for courts not using Court Innovations technology.

Cartwright says Ann Arbor, MI-based Court Innovations is now ready to push its software nationwide, but in order to do that, the startup needs an infusion of cash. The company is the first U-M startup to seek equity investors through a 4(a)(6) fundraising campaign on Netcapital, a Boston-based marketplace that connects entrepreneurs and investors.

Court Innovations is hoping to raise nearly $500,000 from accredited investors, or those meeting income thresholds required by the SEC, and non-accredited investors alike—and the message Cartwright wants to send to the public is that you don’t need to be rich to back her startup.

“It’s a great opportunity for people to get involved in investing,” she adds. (The campaign was made possible by a provision of the JOBS Act that went into effect last year, allowing startups to raise up to $1 million every 12 months from non-accredited investors through an SEC-approved portal such as Netcapital.)

In the past year, Court Innovations, which has six full-time employees, has expanded the kinds of cases it can process. In addition to paying tickets, users can now resolve “lesser misdemeanors,” Cartwright says, including failure-to-comply warrants and small claims court issues.

Cartwright feels Matterhorn is filling a critical need that helps courts as much as it helps citizens. “We increase access to justice, and by decreasing inefficiencies in the ecosystem, we are able to close cases and collect fines much faster,” she explains.

Forty percent of Matterhorn users surveyed said they wouldn’t have resolved their issue without Court Innovations, Cartwright says, and people have all kinds of valid reasons for not being able to make it to a court appearance: they can’t get time off work, or they don’t have transportation, or there’s a language barrier. And who wants to discuss their inability to pay fines in front of a packed courtroom?

“Imagine how embarrassing it is to stand before a judge and talk about your finances,” she points out. “We help keep them from that negative spiral of fees and give them the ability to pay before going into arrears. We’re really looking forward to seeing this expand nationally.”

The Court Innovations campaign on Netcapital runs through March 13.