Disclosures

  1. SeedInvest’s due diligence process is no guarantee of success or future results. All investors should carefully review each investment opportunity and cancel their subscription within the allotted time-frame if they do not feel comfortable making any specific investment based on their own DD. Learn more about due diligence on the SeedInvest Blog (https://www.seedinvest.com/blog/angel-investing/how-to-assess-an-investment) and our vetting process in our FAQs (https://intercom.help/seedinvest/en/).

  2. SeedInvest’s selection criteria does not suggest higher quality investment opportunities nor does it imply that investors will generate positive returns in investment opportunities on SeedInvest. Learn more about due diligence on the SeedInvest Blog (https://www.seedinvest.com/blog/angel-investing/how-to-assess-an-investment) and our vetting process in our FAQs (https://intercom.help/seedinvest/en/).

  3. Diversification is only across multiple early-stage investment opportunities within the asset class. There is no guarantee that this program will lead to a well-balanced portfolio of companies across industry types or stages across the asset class. In addition, enrolling in this program will not lead to diversification across your entire investment portfolio. In order to achieve diversification, we do not recommend you allocate more than 10% of your entire investment portfolio to alternative assets.

  4. Testimonials may not be representative of the experience of others and are no guarantee of future performance or success. No individuals were compensated in exchange for their testimonials.

6 Ways Groups can Benefit from Crowdfunding

 
This is a guest post by Kiran Lingam, a corporate and securities lawyer and regular writer and speaker on crowdfunding and the JOBS Act.

Existing business organizations (like TiE, AAPI, Entrepreneurs Organization, MIT Enterprise Forum, NASABA, NAPABA, CEO Council, AAHOA and ATDC), meetup groups (like New York Tech Meetup) and other communities could benefit greatly implementing a crowdfunding platform (like SeedInvest Groups) within their organization for several reasons:

1.  Support the Mission.  Most groups are organized around a common cause or purpose.  Crowdfunding can help pool resources and support new ventures that propel this cause forward.  For example, AAPI’s mission to facilitate and enable Indian American Physicians to excel in patient care, teaching and research and to pursue their aspirations in professional and community affairs.  This mission would be furthered by helping to fund a medical device that helped physicians provide better care.

2.  Increase Engagement & Enthusiasm.  Crowdfunding campaigns are short periods of intense action, creating a lot of excitement.  Members will be more engaged on a day-to-day basis with causes to rally around.  This will strengthen the relationships among members, thereby building up the internal binding of the organization.

3.  Increase Deal Flow.  Successful crowdfunding campaigns almost always lead to a number of new business deals and partnership offers.  When members see a campaign, they will think through whether the issuer is a potential business partner and often reach out to the issuer to make a proposal.  This peripheral deal flow often is far more valuable than the money raised in the campaign itself.

4. Member Benefits.  Access to crowdfunding opportunities can be marketed as a membership benefit to people seeking to raise funds, invest funds or seek out new business partnerships.

5.  Revenue Opportunities.  Crowdfunding can help you monetize your community, though regulatory concerns will limit the types of compensation that can be earned.  Here are some examples for monetization:

  • Increase sponsorship opportunities from companies who successfully raise funds
  • Advertising opportunities on crowdfunding campaign pages
  • Opportunities for sponsors to provide services to issuers (i.e. legal, accounting, etc.)
  • Referral fees for non-investment deal flow (as described in #3 above)
  • Transaction fees or carried interest are possible, but would carry burdensome regulatory requirements and may not be feasible.

6.  Collaboration with other Groups.  SeedInvest Groups allows groups to open their campaigns up to other groups who may have an overlapping mission.  This type of two-way collaboration will strengthen the relationships among groups, perhaps leading to greater cross membership and joint event opportunities.

What else?  How else could existing groups benefit from implementing crowdfunding within their organization?

Caveat: All of this is subject to regulatory limitations (for equity crowdfunding, but not rewards crowdfunding) and the pending SEC rules.  Implementation of Title II (general solicitation to accredited investors and Title III (Crowdfunding) of the JOBS Act by the SEC is likely required in order for groups crowdfunding to become a reality.

The information on this blog is not a substitute for professional legal advice. The opinions expressed herein are the solely the opinions of the author and not of any law firm, employer or organization affiliated with the author. Nothing in this blog shall create an attorney-client relationship, nor is it a solicitation to offer legal advice. If you ignore this warning and convey confidential information in a private message or comment, there is no duty to keep that information confidential or forego representation adverse to your interests. Seek the advice of a licensed attorney in the appropriate jurisdiction before taking any action that may affect your rights.

image

 

This post was written by SeedInvest on May 3, 2013

Raise a Round

A streamlined fundraising process for companies at every stage.

Choose how much you’d like to allocate to startup investing today.