Seedinvest involves five steps from start to completion of a successful raise. The first step is to create an application. The application includes basic information and details about your company. There is no one type of industry Seedinvest has will accept to crowdfund. However, they are looking for early stage, high growth companies technology companies. After your application is submitted, it will be looked at by a screening committee. The screening committee is looking for potential of your business. The screening committee will consider current customers, demonstration of the product, industry potential, and competition. If you are able to get past the screening committee, then it is time for due diligence. Due diligence includes a thorough legal and business analysis of your company. Seedinvest is looking to make certain your company is a good fit to be a part of raise and that there are no risks or liabilities that Seedinvest or their investors might risk from the transaction. The final step is to close the round. This is includes legal agreements regarding the account.
This crowdfunding source is extremely competitive and requires a well written business plan. They are looking for startups that are actual businesses and not just hypothetical. A product that can be demonstrated is a requirement. In addition, the company should have at least two full time team members. Seedinvest requires some history of success. This crowdfunding source only makes these stipulations because investors are looking for these attributes in a start up.
Only about one percent of applicants to Seedinvest are accepted (Neiss). However, on average, startups will raise about $435,780 (Neiss) which is more than the average crowdfunding source. According to seedinvest.com, “The companies on SeedInvest raised 89% more than the industry average in 2017.”
Generally, it takes 45 days to receive the capital. The website states that it will take 3-6 months for a “Regulation A” raise. According to sec.gov, a Regulation A raise allows a company to sell securities to the general public.
Seedinvest is looking for start ups trying to raise between $500,000-$50,000,000 in capital. There does not seem to be any reporting requirements that Seedinvest requires. I think that would be agreed up in the profile creation step of the process. I reached out to Seedinvest to ask this question and some others, but unfortunately an associate got back to me and declined an interview.
There is a 7.5% placement fee and 5.0% equity fee when raising money with Seedinvest (seedvest.com/FAQs). This is a value because of the successful network of investors that Seedinvest claims to have.
Ganti, A., https://www.investopedia.com/terms/p/preferredstock.asp, Retrieved on 9/24/2020
https://www.seedinvest.com/faqs, Retrieved on 9/24/2020
Neiss, S, (2018), https://venturebeat.com/2018/06/09/todays-best-crowdfunding-platforms-by-the-numbers/, Retrieved on 9/24/2020
https://www.seedinvest.com/raise, Retrieved on 9/24/2020
https://www.sec.gov/oiea/investor-alerts-bulletins/ib_regulationa.html, Retrieved on 9/25/2020
Hyatt, A., (2016), Crowd Start, ISBN 978-0-98952-101-7
Master of Entrepreneurship Website for Mike Weimar 