Crowdfunding Site Makes it Easier For Startups to Stand Out

SeedInvest's Co-Founders James Han and Ryan Feit

SeedInvest’s Co-Founders James Han and Ryan Feit

BY MICHELLE GOODMAN   Ryan Feit and James Han wanted their crowdfunding site to be more than a listing service for startups in search of cash. So when the former investors launched New York City-based SeedInvest in February, they handpicked the companies they wanted to include. The idea was to make it easier for startups to stand out from the crowd and give accredited investors the highest caliber of companies from which to choose.

So far more than 400 startups have applied to SeedInvest, and more than 600 accredited investors have signed on. “Right now about 1.5 percent of the companies that apply are given the green light to raise capital,” Feit says. The site has already yielded nearly $1 million in equity or convertible-note investments. In addition to companies actively fundraising, SeedInvest features “prospects”–select up-and-comers showcased to gauge investor interest.

Once cleared to begin fundraising, startups must specify a target amount and deadline; to collect the funds, they must meet both. SeedInvest takes a 5 to 10 percent cut of funds raised through the site.

We talked to Feit about SeedInvest’s curated approach.

What qualities do you look for in startups?
We definitely evaluate the team to see if their experience fits the market they’re going after. We’ll also look at whether it’s a large enough market for investors. We’ll look at the competitive landscape and figure out if they have something that differentiates them from other people. We’ll look at funding traction as well. Although it’s not a requirement, a lot of the deals that have done well on our site are deals where an angel group or a VC or maybe some other investors have already committed to the company.

What must companies submit to be considered?
We require them to submit an investor deck, which should have walked through a lot of the things that I mentioned we’re looking for. Then we want to see a little historical [info] if they have that, and projections. From that we can typically tell whether they’re ready or whether they need more work.

How long does it take to get funded?
Based on what we’re seeing, it should take between a week and a few months. But it really depends on the company, how much they’re trying to raise and their investor traction.

What are your repayment terms? 
We don’t have a standardized template. It’s ultimately a negotiation between the entrepreneur and the investor, and typically the terms are not any different than they would be from raising capital offline.

What are some of the site’s unique features?
We have something called Virtual Meetings. It allows an entrepreneur to pitch investors across the country from their couch. The second feature we’ve built is called Simple Invest. That allows investors to sign legal documents and send money to fund their investment in a few easy steps. As an entrepreneur, you never have to track down a check or a signature page again. And we’re building a feature called Groups, which allows VCs, angel groups, incubators and other affinity groups to have their own portion of SeedInvest. As we bring on more investment groups, it will help entrepreneurs on our site access them.

Any advice for ‘treps interested In SeedInvest?
It’s really important to get as far as you can as an entrepreneur prior to raising capital. Spend some time and a little bit of money to make sure you have a product that is ready to launch. Speak with as many investors as you can before the SeedInvest process.

It helps your cause if you have some investors that are interested when you launch your deal on our site.

Read more: http://www.entrepreneur.com/article/227977#ixzz2h94FaFif

Tags:

HEADLINE NEWS

This RSS feed URL is deprecated, please update. New URLs can be found in the footers at https://news.google.com/news [...]

NPRAfter Outcry, Crowdfunding Site Patreon Backs Off Plan To Raise ...NPRThe popular crowdfunding service Patreon has backed off plans to change its payment structure, after widespread, vocal and passionate opposition from creators and their fans. Last week, the site announced it woul [...]

TechCrunchHow hate speech crowdfunding outfit Hatreon crept back online ...TechCrunchIf you want to make a living creating white supremacist content, you're probably not going to do it via sites like Kickstarter and Patreon, which prohibit hate speech. Fortunately there's Ha [...]

CoinDeskKickstarter ICO? Don't Count On It Says Crowdfunding Leader ...CoinDeskThe company most widely associated with crowdfunding, Brooklyn-based Kickstarter, has no plans to get into the initial coin offering (ICO) business. Coming in response to the news yesterday that compet [...]

CryptoCoinsNewsCrowdfunding Giant Indiegogo Looks to Make ICOs Mainstream ...CryptoCoinsNewsOne of the world's most popular crowdfunding platforms is getting in on the ICO game. Josiah Wilmoth on 14/12/2017. ------------------Advertisement------------------. Advertisement · Reddi [...]

ForbesCrowdfunding Do's And Dont's From iFundWomen's Karen CahnForbesDuring our conversation, she was transparent in sharing that her first software company, VProud, failed because she “did everything backwards” and spent too much time trying to perfect the product. “Pe [...]

Crowdfunding via Customers: Is This The New Startup Capital?Customer ThinkWith more and more companies in a variety of sectors developing new crowdfunding campaigns, it makes sense to ask whether crowdfunding is likely to replace startup capital in the near future. Crowdfunding is qui [...]

VentureBeatAtaribox hits the pause button on its crowdfunding campaignVentureBeatAtari was supposed to start taking preorders along with launching its crowdfunding campaign on Indiegogo today for its new Ataribox console. However, it seems to have hit an unspecified snag and in an ema [...]

Coindesk (press release) (blog)Crowdfunding Giant Indiegogo Opens to ICOs - CoinDeskCoindesk (press release) (blog)The startup revealed today that, through an existing partnership with MicroVentures, it will begin offering services to projects seek to use the blockchain funding model. [...]

TechCrunchFormer Gawker employees are crowdfunding an effort to buy Gawker.comTechCrunchWhile Univision acquired most of Gawker Media's sites last year (and renamed them as the Gizmodo Media Group), the deal didn't include Gawker itself. In fact, BuzzFeed reported last month [...]

CFB Finance

Marketwired

  • Crowdfunding
  • Crowdfund
  • Peer to Peer Lending
  • FinTech
  • Reg A+
  • Reg CF
  • Crowdfunding USA

Press Release

Live Crowdfunding .tv

What's Next Step in Regulation A+ JOBS ACTS Title IIII :L Interview : Steve Cinelli with Brian Korn Securities and Crowdfunding/Peer-to-Peer Lending Lawyer, Watch more video library | Conference | Interview | Campaign Showcase | Research | Education |