SeedInvest is a technology platform that enables equity crowdfunding by accredited investors. SeedInvest was founded by professional investors involved in the passage of the 2012 Jobs Act.
- No fees for investors to access the SeedInvest platform
- Easily view and gain access to investment opportunities
- Seamlessly make an investment with just a few clicks
- Use automated accredited investor verification tools, designed to maintain your privacy
- Easily review the company’s due diligence materials online
- Collaborate and partner with other investors on the platform
- Easily track and manage your assets through the investment dashboard
- Simplify and speed up your fundraising process
- Promote your company broadly through fully integrated social media & advertising tools
- Access a network of accredited investors from around the world
- Host virtual due diligence sessions and board meetings from your desk
- Streamline due diligence, execution of legal documents, and processing of investments for quicker & easier closings
- Efficiently manage and interact with your shareholders through our Virtual Boardroom
SeedInvest has partnered with North Capital to provide broker-dealer services for the offerings listed on the Browse Companies page. North Capital also provides accredited investor verification services for SeedInvest investors. North Capital does not provide broker-dealer services, and expressly disclaims involvement, in any other transactions conducted on the SeedInvest platform.
This document does not constitute an offer to sell or a solicitation of an offer to buy any securities. This document is an outline of matters for discussion only. The information contained in this document is subject to discussion, completion and amendment. This document does not contain all the information necessary to fully evaluate any transaction or investment, and you should not rely solely on the contents of this document. Any investment decision should be made based solely upon appropriate due diligence and careful review of any offering documents, materials or prospectus.
Your trust in us and the security of your information is core to our business and a top priority at SeedInvest.
Communication between your browser and SeedInvest is encrypted using the Secure Sockets Layer protocol (SSL). Our servers sit behind an electronic firewall and we do not store confidential information such as SSNs or bank account numbers on our servers.
North Capital determines whether an offering should be accepted as a vetted investment opportunity. There is no guarantee that your offering will be accepted.
- At least a minimum viable product or prototype
- Proof of concept (includes customer traction or partnerships)
- At least two full-time team members
- A business which has been incorporated in the United States
There is no typical company on SeedInvest, but companies which have been successful thus far generally share the following characteristics:
- Technology and consumer facing businesses
- Startups raising between $100,000 - $5,000,000 (including offline)
- Companies looking to raise Seed Rounds, Series A Rounds, and Bridge Rounds
- Companies which already have funding terms and have attracted a lead investor
Once you set up your company profile, you can begin to attract followers and collect indications of interest after completing the minimum requirements to publish.
It depends on the company, and not all companies succeed in raising capital using this approach. The time it takes to complete a successful financing can vary widely, but companies should expect that it will take a minimum of 60 - 90 days to complete.
In order to protect investors, Companies must reach a minimum funding target to have a successful fundraise. Therefore, investments are not finalized until the company raises enough money to meet its funding target and completes all other closing conditions. When investments are initiated through the SeedInvest platform, the subscription proceeds are held securely in an independent escrow account. Once the funding target has been met, the money is released to the company and investors will receive the applicable securities. If the minimum funding target is not met, subscription amounts are returned to investors by the escrow agent. Neither SeedInvest nor North Capital ever receives or takes custody of investor funds at any point during the investment process.
In the event that investor commitments meet or exceed the maximum funding target, other investors will still be able to commit capital to your round. However, you have discretion whether to allow an oversubscription at closing.
Under the Rule 506 exemption of Regulation D of the Securities Act of 1933, it is not required to create a private placement memorandum for a private securities offering. You should consult your own legal counsel, but at a minimum, key documents typically include an investor presentation, a term sheet, a form of securities to be offered, and a securities purchase or subscription agreement. These documents should be generated by the company and its legal counsel.
No, your company's profile will not be viewable until you have met the requirements to be published as a Screened company.
Yes. Companies may set investment minimums during the funding round setup process.
Information on your company overview pages is available to the public. By design, we encourage social and public consumption of your company's public content. However, as former investors and entrepreneurs ourselves, we understand the importance of securing sensitive information, so we provide companies with a secure, permission-based, access-controlled system to securely share sensitive content with potential investors.
A company will typically join SeedInvest and launch a fundraising round with a valuation target in mind. Oftentimes, the company has pre-existing offline investor traction. The terms established with offline investors, who are often professional angels or venture capitalists, typically serve as the basis of the valuation and terms offered to online investors on SeedInvest. Neither SeedInvest, nor North Capital Private Securities will provide valuation services for the Companies.
Yes, there are investor limits. The JOBS Act increased the shareholder limit before public filing requirements kick in to 2,000 accredited investors or 500 unaccredited investors. Companies can effectively limit the number of investors by setting investment minimums and/or creating pooled investment vehicles.
You should create one - even if it is a simple 1-2 minute, homemade video of the founders discussing their vision and business plan. Early-stage investing is a very personal endeavor and evaluation of the management team is a cornerstone of the due diligence undertaken by any investor.
- 7.5% placement fee; charged on the value of the fundraising upon the successful completion of your offering
- 5% warrant coverage
- Between $3,000 and $5,000 in due diligence, escrow, marketing and legal expense reimbursements
There are a number of tools built into the SeedInvest platform that will allow you to connect and communicate with potential investors. However, you will not have access to investors on SeedInvest until your application has been reviewed and accepted. Once your company profile is published, a member of the SeedInvest team will conduct a one-on-one platform walkthrough so that you are aware of all platform features as well as best practices for a successful offering.
We work with companies of all structures (C-corporations, S-corporations and LLCs) and they can be incorporated in any state. However, we only work with companies incorporated in the U.S.A. and at this point do not work with companies incorporated in other countries.
- Have individual net worth, or joint net worth with your spouse exceeding $1 million
- Have income exceeding $200,000 in each of the past 2 years and expect the same this year
- Have income (with your spouse) exceeding $300,000 in each of the past 2 years and expect the same this year
- Invest on behalf of a VC firm or other registered investment company
- Invest on behalf of a business with $5 million in assets or in which all the equity owners are accredited
No, unlike other portals which take up to 20% of the upside of an investment for themselves (a “carried interest”) in addition to expense fees, SeedInvest charges absolutely no fees to investors. If you invest $10,000, you will receive $10,000 in securities. Companies raising capital pay a contingent placement fee to North Capital, as described above.
- Investors must first create an account and register as an accredited investor.
- Once you identify a potential investment opportunity, you should review the terms of the offering (this information can be found in the respective company's dataroom in the Funding folder); you will have an opportunity to review the investment documents again during the funding process.
- Once you are comfortable with the investment terms, you can invest by clicking on the Invest button located on the company profile page or the browse company page.
- This will initiate the funding process under which you will be asked to:
- Enter your investment amount
- Verify your identity and accreditation status
- Execute the required legal agreements
- Enter the account information of your funding account (checking or savings)
Once you confirm your investment, the funds will be transferred to an escrow account for holding until the fundraising is closed.
If you find that you are more comfortable reviewing the investment process with us over the phone, please contact us using the chat bar or at firstname.lastname@example.org and we can facilitate an offline transaction.
Once the fundraising round closes, you will receive confirmation of success and counter-signed legal agreements. In the case of an unsuccessful round or a canceled investment by yourself, the proposed transaction will be cancelled and the escrow agent will return the funds from the escrow back into your bank account.
While there are no guarantees that this strategy will reduce your risk, most investors choose to mitigate risk by practicing portfolio diversification. Investing smaller amounts across a large number of opportunities is a good practice in the private markets just as it is in the public markets and is a great investor benefit facilitated by the JOBS Act.
For additional information on risk regarding early-stage investing, please visit our General Risk Factors.
- Conversion Discount: Grants initial investors the right to convert the amount of the loan, plus interest, at a reduced price (discount %) to the purchase price paid by the Series A investors.
- Interest Rate - Interest accrues and the total amount of interest is added to the loan amount and converted into shares of preferred stock upon the closing of the Series A round.
- Valuation Cap - Ceiling on the valuation determining the conversion price of the note. For example, if the cap is $5 million, and the next qualified equity round values the company at $10 million, then the note will be converted at a $5 million valuation (effectively a 50% discount).
- Term - Maturity date by which the company must either repay the note or trigger conversion by completing a Series A round.
If you have any questions about how convertible notes work, please contact us and we can explain this more in detail.
- The company gets acquired by another company.
- The company goes public (undergoes an initial public offering on the NASDAQ, NYSE, or another exchange).
In those instances, you receive your pro-rata share of the distributions that occur. It can take 3-9 years (or longer) to see a distribution, as it takes years to build companies. In many cases, there will not be any distribution as a result of business failure.
NCPS does not make investment recommendations and no communication, through this website or in any other medium should be construed as a recommendation for any security offered on or off this investment platform. This website is intended solely for accredited investors. Investments in private placements and start-up investments in particular are speculative and involve a high degree of risk and those investors who cannot afford to lose their entire investment should not invest in start-ups. Companies seeking startup investments tend to be in earlier stages of development and their business model, products and services may not yet be fully developed, operational or tested in the public marketplace. There is no guarantee that the stated valuation and other terms are accurate or in agreement with the market or industry valuations. Additionally, investors may receive restricted stock that may be subject to holding period requirements. The most sensible investment strategy for start-up investing may include a balanced portfolio of different start-ups. Start-ups should only be part of your overall investment portfolio. Investments in startups are highly illiquid and those investors who cannot hold an investment for the long term (at least 5-7 years) should not invest.
The minimum and maximum investments for a given round are determined by the company raising capital.
Yes. We allow investors on our platform to choose to not publicly disclose their investments. Non-disclosed investments will be shown only in the investor's personal workspace and highlighted in red on their profile page when logged in.
The identities of the founding team members are all verified through a third party service and we mandate that each company provide their articles of incorporation (or similar documentation) for your review. Each investor, however, is ultimately responsible for conducting due diligence independently and should only make investments which fall in their comfort zone.
We cannot give tax advice, and we encourage you to talk with your accountant or tax advisor.
Yes, please email us at email@example.com. We can help setup and initiate the account verification process to allow investments to be executed on your account.
Currently only accredited investors can access offerings on SeedInvest and make investments. However, in June of 2015, Title IV of the JOBS Act is expected to kick in and permit equity crowdfunding with non-accredited investors. At that point, entrepreneurs will be able to raise capital on SeedInvest from non-accredited investors (the 98% of America that cannot currently invest in private businesses) as well.
We encourage investors to ask diligence questions on the moderated discussion board so that the company and other investors on SeedInvest can leverage community content. In the event that investors wish to have an individual or private conversation with the founders of the company, they may directly message the company by visiting the company's profile page. Through the events page, investors may also participate in live video diligence sessions with the company as well as stay up to date with product demos, conference calls, or other events scheduled by the company.
As companies have limited human resources and time, we ask that potential investors thoroughly browse through the company's profile and discussion board prior to asking their diligence questions so that companies can focus on building their business. We ask and require that companies provide extensive information and build out complete profiles to front-load the fundraising time commitment.
Legal and Confirmatory Due Diligence provided by Crowdcheck
The organization of the company
CrowdCheck requires information that shows the issuer company has taken steps necessary to organize as a corporation, LLC, or limited partnership in its state of organization, is in good standing, and that the securities being issued will be duly authorized and validly issued.
The corporate structure and ownership
CrowdCheck works with the issuer company to disclose its organizational structure, affiliated entities, and current capitalization.
The people behind the company
CrowdCheck helps the issuer company disclose who is behind the operations and strategy of the company, along with their previous related experience, and Bad Actor Reports to provide evidence that the company is not disqualified from proceeding with its offering.
Information provided to investors
CrowdCheck checks that the issuer company is providing clear disclosure of its financial situation, business origins and operations, and legal authority to engage in its business activities.
Investor information and terms of the offering
CrowdCheck reviews for consistency each instance where the issuer company describes the offering terms, and identifies to investors how the issuer company reached its current valuation and will track and keep in touch with its security holders.
Review of Transaction Documents by Outside Legal Counsel:
The law firm of Inventus Law performs an independent review of transaction documents to check for red flags & conformance with stated terms.
Business Due Diligence:
North Capital conducts research and due diligence on each company before it is able to accept investments on the SeedInvest platform in order to determine: (1) its viability as an investment opportunity and (2) the key risks associated with that opportunity. North Capital takes a dynamic, multi-faceted approach to evaluating individual offerings, recognizing that a standard scorecard model cannot be applied to the unique situations many startup companies face. North Capital will typically conduct over 30-40 man-hours of due diligence per opportunity, which requires the satisfactory completion of 100-150+ individual questions and data requests.
Particular focus is paid to the following issues throughout the due diligence process:
- Problem or inefficiency being addressed
- Product / service overview, stage of development and anticipated milestones
- Demonstrated traction (e.g. revenue, pre-sales, purchase orders, signed contracts, media coverage, awards, etc.)
- Data to support claims made in marketing materials (e.g. user / customer metrics, signed contracts and agreements, product demonstrations, etc.)
- Growth strategy
- Employees and advisors (including ownership structure)
- Addressable market (e.g. size, growth, penetration, etc.)
- Competitive landscape and industry dynamics
- Exit opportunities
- Intellectual property
- Historical financials
- Financial projections (including error-checking, evaluation of key assumptions and reconciliation to stated growth plan)
- Reference checks (e.g. previous investors, advisors, etc.)
- Investment overview (including determination of key terms, uses of funds, and current and previous investors)
Investment Committee Review
The findings of the foregoing review are presented to an internal investment committee comprised of senior executives of North Capital, which may approve, reject, or require additional information for the offering. Upon approval by the investment committee an offering can be listed as “Vetted” and can begin accepting investments online.
- Notwithstanding the foregoing, these investments are illiquid, risky and speculative and you may lose your entire investment. Additionally, the foregoing process does NOT guarantee that any company will be successful or that you will receive a positive return on your investment.
- The foregoing summarizes our standard process. However, each diligence review is tailored to the nature of the company, so the aforementioned process is not the exact process for every issuer.
- Completing the vetting process does NOT guarantee that the company has no outstanding issues or that problems will not arise in the future.
- While the foregoing process is designed to identify material issues, there is no guarantee that there will not be errors, omissions, or oversights in the due diligence process or in the work of third party vendors utilized by North Capital and SeedInvest.
- Each investor must conduct their own independent review of documentation and perform their own independent due diligence and should ask for any further information required to make an investment decision.