SeedInvest is a startup investing platform providing its members access to vetted investment opportunities. SeedInvest was founded by a team of experienced investment professionals involved in the passage of the 2012 JOBS Act.
- View and gain access to investment opportunities
- Make an investment online
- Use automated accredited investor verification tools
- Review the company’s due diligence materials online
- Simplify and speed up your fundraising process
- Access a network of accredited investors from around the world
- Host virtual due diligence sessions from your desk
- Streamline due diligence, execution of legal documents, and processing of investments
SI Securities, LLC ("SI Securities"), with principal offices at 222 Broadway, 19th Floor, New York, NY 10038, is an affiliated broker-dealer registered with the Securities and Exchange Commission (SEC) and a member of the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC).
SeedInvest has partnered with North Capital and SI Securities to provide broker-dealer services for the offerings listed on the Browse Companies page. North Capital and SI Securities also provide accredited investor verification services for SeedInvest investors. North Capital and SI Securities do not provide broker-dealer services, and expressly disclaims involvement, in any other transactions conducted on the SeedInvest platform.
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).
Companies featured on the Vetted section have successfully completed the “Vetting” process by North Capital or SI Securities, our partner broker-dealers, as further described below under the heading “What does “Vetted” mean?”
North Capital or SI Securities 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 - $50,000,000 (including offline)
- Companies looking to raise Seed Rounds, Series A Rounds, Bridge Rounds, and Growth Rounds
- Companies which already have funding terms and have attracted a lead investor
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 days to complete.
In order to protect investors, Companies may be required to 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 (together, the "closing conditions"). When investments are initiated through the SeedInvest platform, the subscription proceeds are held securely in an independent escrow account. Once all the closing conditions have been met, the money is released to the company and investors will receive the applicable securities. If all the closing condition are not met, subscription amounts are returned to investors by the escrow agent. Neither SeedInvest, SI Securities, 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, term sheet, and subscription agreement and or note purchase 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.
Yes, there are investor limits. The JOBS Act increased the shareholder limit before public filing requirements kick in to 2,000 total 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 total amount raised on SeedInvest in the round, paid only upon the successful completion of your offering.
5% warrant coverage; based on the total amount raised on SeedInvest in the round.
Up to $4,000 in due diligence, escrow, marketing and legal expense reimbursements.
Under 506(c), Reg A+, and Reg CF, general solicitation is allowed and is a great way to convert customers into investors in your company. There are a number of tools built into the SeedInvest platform that will allow you to connect and communicate with potential investors, and upon launching, a member of the SeedInvest investment team will opportunistically attempt to provide warm introductions to value-add investors.
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. currently.
- 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
SeedInvest does not charge management fees, expense fees, or carried interest. If you invest $10,000, you will receive $10,000 in securities. Companies raising capital pay a contingent placement fee to North Capital or SI Securities, 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); 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.
- Follow the steps to complete your investment
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 email@example.com 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.
Neither North Capital nor SI Securities 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. 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 firstname.lastname@example.org. We can help setup and initiate the account verification process to allow investments to be executed on your account.
Everyone can sign up on SeedInvest. In order to determine what you are legally able to invest in, we need to know whether you are an Accredited Investor or a Non-Accredited Investor.
- What is an Accredited Investor?
An "Accredited Investor" is defined by the Securities and Exchange Commission as someone who meets at least one of the following requirements:
Has an individual net worth, or joint net worth with your spouse exceeding $1 million (excluding the value of one's primary residence)
Has an income exceeding $200,000 in each of the past 2 years and expects the same this year
Has an income (with your spouse) exceeding $300,000 in each of the past 2 years and expects the same this year
Invests on behalf of a VC firm or other registered investment company
Invests on behalf of a business with $5 million in assets and which was not formed for the specific purpose of acquiring the securities offered
Any entity in which all of the equity owners are Accredited Investors
- What is a Non-Accredited Investor?
A "Non-Accredited Investor" is any individual or entity that does not meet the definition of an Accredited Investor.
Currently only Accredited Investors can make investments on SeedInvest. However, Non-Accredited Investors are able to indicate investment interest in companies testing the waters for a potential future offering to Non-Accredited Investors under regulation A.
To learn more about a company, you can request access to their dataroom. Once approved, you will be granted access to all the documents within the dataroom as well as connected to the founders through the platform. You can also contact SeedInvest to learn more over phone or email.
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 and/or SI Securities 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 and SI Securities take 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 and SI Securities 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 or SI Securities, 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, SI Securities, 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.