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Lendsnap is offering securities under both Regulation D and Regulation CF through SI Securities, LLC ("SI Securities"). SI Securities is an affiliate of SeedInvest Technology, LLC, a registered broker-dealer, and member FINRA/SIPC. SI Securities will receive cash compensation equal to 7.50% of the value of the securities sold and equity compensation equal to 5.00% of the number of securities sold. Investments made under both Regulation D and Regulation CF involve a high degree of risk and those investors who cannot afford to lose their entire investment should not invest. Furthermore, the contents of the Highlights, Term Sheet sections have been prepared by SI Securities and shall be deemed broker-dealer communications subject to FINRA Rule 2210 (the “Excluded Sections”). With the exception of the Excluded Sections noted above, this profile contains offering materials prepared solely by Lendsnap without the assistance of SI Securities, and not subject to FINRA Rule 2210 (the “Issuer Profile”). The Issuer Profile may contain forward-looking statements and information relating to, among other things, the company, its business plan and strategy, and its industry. Investors should review the risks and disclosures. The contents below are meant to be a summary of the information found in the company’s Form C. Before making an investment decision, investors should review the company’s Form C for a complete description of its business and offering information, a copy of which may be found both here and below.

Loan Origination Team Productivity Lift

25%

Monthly Loan Applications

145+

  • Y Combinator alum and graduate of enterprise-focused Alchemist Accelerator
  • Ranked as one of the top 25 startups transforming the mortgage industry by CB Insights; won Best in Show at the National Mortgage News Conference
  • Currently used by 11 lenders and 40+ loan officers
  • Customers include Get A Rate, LLC; Interactive Mortgage, BuyWise Mortgage, Primary Residential Mortage (Santa Rosa), LoanFlight Lending, Myprimehomeloan.com, Equity Mortgage Group, Access Mortgage Partners, Sign on the Line, LLC; cbLoans, Homebuyers Mortgage
  • Loan processing and origination services represents a total addressable market of $4B+
  • Amount raised:  
  • Close date:  
  • Indicated Interest:  
  • Raise Description:  Seed
  • Minimum Investment:  US $500 per investor
  • Security Type:  Crowd Note
  • Valuation Cap:  US $6,000,000
  • Offering Type:   Side by Side Offering

We believe the largest financial asset market is ready for disruption.


An expensive problem

Lenders will write $1.5T of home mortgages in 2017, and will have to evaluate every single borrower's ability to repay. This is expected to cost the industry $15B in human labor. We talked to these humans, and learned that they spend 1/3 of their time just asking other humans for documents and data that are almost universally available online. While the market is still making the transition to transactional data, Lendsnap is the only company bridging the present with the future by delivering original electronic documents and datasets. That means portfolios of our lender customers stay completely liquid in the secondary market. No one else can offer that today.

How we solve it

Lendsnap solves the financial data access problem for lenders and consumers. Our secure web app links to consumer accounts to gather pay stubs, W2-s, tax returns, and bank statements. We started in mortgage, which TechCrunch calls “the holy grail of lending”. We power mortgage lending with all the documents and data needed to qualify borrowers. Through our web app and public API, we support traditional and online origination workflows to help lenders transition to electronic mortgage origination on their terms. We meet the market where they are today.

How the future looks

We are positioned to address a $4B market that is evolving rapidly right now. Mortgage underwriting rules are set in large part by FNMA and FMAC, the government sponsored entities (GSE’s) that keep mortgage markets liquid. The pivotal sea of change happening right now is the transition from original electronic documents to transactional data sets. While the market is still figuring out how to access and use this new data, Lendsnap bridges the present with the future by delivering original electronic documents and datasets. Our competitors deliver data only but not the original electronic documents.

Customer Testimonials

Lendsnap has improved our signed application conversion almost overnight because of its speed and ease of use. Once clients send us the documents and we can deliver a full pre-approval, they are more likely to stay with us and use us to satisfy their mortgage needs.

-Jared, Access Mortgage Partners

Lendsnap has been a great tool.  As a small broker shop, it was challenging to find a resource to obtain complete borrower documentation securely. Lendsnap provides a secure, convenient, and most importantly, a straightforward, simple interface for consumers to provide sensitive information quickly.  With my branding incorporated, Lendsnap becomes an extension of my company. Thanks for everything.

-Jeff, Homebuyers Mortgage

Pitch Deck

Product & Service

Lendsnap instantly gathers the original borrower documents and data for lenders by linking to consumer financial accounts. We increase loan origination team productivity by 25%+ and save applicants several hours on each application as well.

Our intuitive and easy-to-use workflow makes it easy and safe for borrowers to submit and for loan officers to receive the necessary documents for lenders to make a credit decision. With quicker access to original source documents, lenders are able to provide faster service with less risk to their portfolios and the secondary market. 

Our lender clients pay us to increase their throughput, enabling them to increase top line revenue by closing more loans. We charge $15/applicant/month on new business. Existing business is priced at $100/loan officer/month.

Launched in July 2016. Now processing 150+ applications per month at ten companies, customer testimonials. API documentation is available, integration to Ellie Mae Encompass complete.

As the only company delivering the right documents and data to originate non-agency loans such as VA, FHA, and subprime, we are able to work with all types of lenders. This market segment consistently represents 5-10% of total loan originations each year and is projected to grow in the near term due to rising rates. Furthermore, we are uniquely suited to serve mortgage brokers (12% market share) who have to remain flexible to the credit needs of their diverse borrowers. We are the only post-launch company that delivers actual electronic statements straight from source institutions, such as Bank of America, TurboTax, Chase, and hundreds more. 


Tutorials: 

  1. Lendsnap Overview Tour -Our world class borrower experience designed by a Series C funded UX Director
  2. How to link your accounts using Lendsnap- Account linking to gather original documents -where the magic happens!
  3. What do the different colors mean? -How our UI guides the customer to next steps
  4. How to upload a document on Lendsnap -Consumers can upload documents as well as link financial and employment accounts.
  5. Document options - view/replace/delete/move -How consumers manage documents in Lendsnap

Media Mentions

Team Story

Mike heard about Orion building Lendsnap to transform mortgage in October 2015 through a Berkeley Haas newsletter. As a loan officer manager with 14 years of experience, Mike could see that Lendsnap is building the future of lending and wanted to help drive this change. After sharing our visions for how significant the service could be, and lining up on go-to-market strategy, we got to work in  November 2015. Orion knew Mike was the perfect partner because of his experience building origination teams and delivering mortgage software solutions at big four consulting firms. As a duo, they are unstoppable!

Meet the Founders

Orion Parrott

Founder and CEO

Orion earned a Master of Science in Electrical Engineering that included machine learning, pattern recognition and classification, detection of signals in noise, and other applied math and physics courses. He led electronics manufacturing of radar amplifiers worth $25M annually. He started a biofuel cooperative in Boston in 2006 to convert diesel vehicles to run on recycled vegetable oil. Orion has programmed in C++ and Fortran, and helped design, develop, and test our nation's distributed missile defense system.

https://www.linkedin.com/in/lendsnap/

Mike Romano

Founder and Vice President of Business Development

Mike has originated thousands of loans and led origination teams at Wachovia, Wells Fargo, and other companies around California through good markets and bad. Mike has an excellent sense of dealing with enterprise customers and knows how to craft a deal that appeals to them, with defined implementation timeline and strategic scoping of projects. He is a master of SaaS and enterprise pricing with novel ideas that align with lender interests.

https://www.linkedin.com/in/mikerromano/

Orion Parrott

Founder and CEO

Orion earned a Master of Science in Electrical Engineering that included machine learning, pattern recognition and classification, detection of signals in noise, and other applied math and physics courses. He led electronics manufacturing of radar amplifiers worth $25M annually. He started a biofuel cooperative in Boston in 2006 to convert diesel vehicles to run on recycled vegetable oil. Orion has programmed in C++ and Fortran, and helped design, develop, and test our nation's distributed missile defense system.

https://www.linkedin.com/in/lendsnap/

Mike Romano

Founder and Vice President of Business Development

Mike has originated thousands of loans and led origination teams at Wachovia, Wells Fargo, and other companies around California through good markets and bad. Mike has an excellent sense of dealing with enterprise customers and knows how to craft a deal that appeals to them, with defined implementation timeline and strategic scoping of projects. He is a master of SaaS and enterprise pricing with novel ideas that align with lender interests.

https://www.linkedin.com/in/mikerromano/

Key Team Members

Santiago Marin

QA and Test

Alain Kramar

Software Engineer

Abby Walla

Customer Support

Pablo Feldman

Software Engineer

Mizue Horiuchi

Product Manager

Notable Advisors & Investors

Y Combinator

Investor, not your average fixed point combinator

Orion Parrott
Alchemist
Cerium Technology

Investor, Our process focuses on exceptional companies with great people and products

Brad Flora
Jude Gomila

Investor, CEO and Founder @ Golden

Doug Duncan

Advisor, SVP and Chief Economist at Fannie Mae (FNMA)

Larry Fried

Advisor, Vice President, Investor Business Development at Ellie Mae

Eldon Klaassen

Advisor, Founder and Managing Director, Cerium Technology

Ash Rust

Advisor, Founder and CEO of SendHub, EIR at Trinity Ventures

Ray Sidney

Advisor, 2nd Google Engineer

Albert Chu

Advisor, CEO at Moff USA

Q&A with the Founder

  • Has the company made any loans to any members?
    Technically speaking – Mike and I did this, this year. Mike and I began taking a small wage earlier this year; our tax advisor advised us to turn that into a loan from the company to us – which we are paying back month on month in 2017 – and that is because we did not file quarterly withholdings for ourselves; so, it was more tax advantageous to make that a loan. The total amount is about $40k in total.
  • Can you give us an idea of you business model and your business strategy?
    We want to change the way that mortgages and lending is done for as many consumers as possible. That pushes our model to Saas for mortgage lenders – enterprise sales model so far and getting feedback from select customers that are the right early adopters. We released our draft API in July, so we have several significant clients that are reviewing and considering using us. We entered the market with small to mid sized mortgage lenders; and we’re finding significant demand from larger players – who have more of an appetite to use the api. That’s our strategy. Originally we had a concept of D2C – and someday we might come back to that – but for now we are able to achieve a lot of growth with switching to a B2B marketplace model. We’re more concentrated now on the product that we have been building and rolling that out. What makes us different is the type of data that we collect on the lenders from the borrowers – which is getting the original statements directly from the institutions. Our competition is grabbing transactional data and then generating a verification of deposit based on that data – that data is also accepted now on large government sponsored secondary markets like Fannie Mae. Where we are unique and because we are getting the original sourced documents – there is a segment of the market which equals 5-10% of the total origination market every year on agency (Subprime, FHA and VA) which have to have original statements. That’s a market that we have identified that we can uniquely target.
  • Could you provide a breakdown of the product?
    We deliver it as an API or as a standalone web or mobile application. Our app runs in a mobile browser for borrowers. Lenders can trigger the borrower activates – basically inviting a borrower from their own loan origination activities. We can also do custom integrations as a way to raise early revenue – even though its not recurring revenue.
  • Could you explain how you plan to scale following the raise?
    We still have a long way to go with Mike leveraging his extensive network that he has built over time (being in mortgage for 14 years) – building origination teams. Theres no one there who has open api’s or even a web app that can be signed up for – or even a web app that can be used by every lender. We’re raising money to add some engineering and add sales to increase our velocity for developing these new products. We want to add at least 2 engineers and some sales personnel. We want to be able to reach out to more clients. We want to be able to reach the largest lenders.
  • Could you give us an idea of what your expectations are for exit opportunities?
    There have been several rollups lately in mortgage or lending software. Acquisition is the most likely vs an IPO – We look at loan origination software or possibly a lead gen software provider. Mostly lead gen and mortgage software fit well – they both tie into achieving Fannie Mae’s mission.
  • The Q&A with the Founder is based on due diligence activities conducted by SI Securities, LLC. The verbal and/or written responses transcribed above may have been modified to address grammatical, typographical, or factual errors, or by special request of the company to protect confidential information.

    Side by Side Term Sheet

    A Side by Side offering refers to a deal that is raising capital under two offering types. If you plan on investing less than US $20,000.00, you will automatically invest under the Regulation CF offering type. If you invest more than US $20,000.00, you must be an accredited investor and invest under the Regulation D offering type.


    Terms & DescriptionRegulation D - Rule 506(c)Regulation CF
    Investor TypesAccredited OnlyAccredited and Non-accredited
    Round descriptionSeedSeed
    Round sizeUS $2,000,000US $2,000,000
    Amount raisedUS $570,000US $62,400
    Minimum investment$20,000US $500
    Target minimumUS $350,000US $350,000
    Security typeCrowd NoteCrowd Note
    Conversion discount15.0%15.0%
    Valuation capUS $6,000,000US $6,000,000
    Interest rate3.0%3.0%
    Closing AmountThe Company is making concurrent offerings under both Regulation CF and Regulation D (the "Combined Offerings"). Unless the Company raises at least the Target Amount of $100,000 under the Regulation CF offering and a total of $350,000 under the Combined Offerings (the “Closing Amount”) by June 26th, 2017, no securities will be sold in this offering, investment commitments will be cancelled, and committed funds will be returned.The Company is making concurrent offerings under both Regulation CF and Regulation D (the "Combined Offerings"). Unless the Company raises at least the Target Amount of $100,000 under the Regulation CF offering and a total of $350,000 under the Combined Offerings (the “Closing Amount”) by June 26th, 2017, no securities will be sold in this offering, investment commitments will be cancelled, and committed funds will be returned.
    CF Offering CapWhile Lendsnap is offering up to $2,000,000 worth of securities in its seed round, only up $1,000,000 of that amount may be raised through Regulation CF.While Lendsnap is offering up to $2,000,000 worth of securities in its seed round, only up $1,000,000 of that amount may be raised through Regulation CF.

    Investor Perks

    Mortgage lenders investing $50K or more receive additional usage credits worth 20% of their investment.

    It is advised that you consult a tax professional to fully understand any potential tax implications of receiving investor perks before making an investment.

    Financial Discussion

    Financial Statements

    Our financial statements can be found in Exhibit B to the Form C of which this Offering Memorandum forms a part. In the following paragraphs, we include a discussion of our financials, which have been reviewed by Artesian CPA, LLC (Independent Accountant’s Review Report dated March 19, 2017).

    Financial Condition

    The following discussion includes information based on our unaudited operating data for 2016 and 2015 and is subject to change once we complete our fiscal year, prepare our consolidated financial statements and our accountant completes a financial review of those statements. Lendsnap, Inc. began operations in January 2016 and began generating revenue in 2016. We are a development stage company and are dependent on additional financing, including this offering, in order to have the funds to develop our products and services. To date, the company has not commenced full scale operations nor generated significant operating revenue.

    Results of Operations

    The company’s Independent Accountant’s Review Report provides that the company’s financials were prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.   

    For the year ended December 31, 2016, we recorded net revenue of $5,700. For the year ended December 31, 2016 the  company’s cost of revenues totaled $39,771, for a gross loss of $34,071. We recognized no revenues in 2015.

    The company’s operating expenses consist of research and development, general and administrative, and sales and marketing. For the year ended December 31, 2016, the company’s total operating expenses were $469,318. Total operating expenses in 2015 were $59,207.

    As a result of the foregoing, our net losses for 2016 were $469,318 and for 2015 were $59,207.

    Plan of Operations and Milestones

    We have not yet commenced full-scale operations. We have established the following milestones in our plan of operations:

    Our intended use of funds for this Offering is specifically to hire sales and engineering support, research and development, and marketing. We anticipate that our monthly employee expenses will increase to approximately $120,000 over the five-month period after this Offering.

    Liquidity and Capital Resources; Future Trends

    As of December 31, 2016, the company had approximately $181,938 in its checking account.

    The continuation of the company’s business is dependent upon raising adequate additional financial support, which includes raising additional capital through our fundraising campaign, incurring additional debt through a financial institution, or the sale or merger of the company.

    We anticipate that this Offering will expand the company’s available cash resources. At the current average burn rate of approximately $25,000 per month, the company will have a runaway of approximately 40 months if we manage to raise our overallotment of $1,000,000.

    We have not committed to make any capital expenditures, and in the event we do not raise sufficient funds from this offering, we will defer the capital expenditures we have planned.

    Indebtedness

    We currently have no indebtedness. 

    Recent Offerings of Securities

    We have made the following issuances of securities within the last three years:

    • On January 30, 2015, we granted 4,000,000 shares of Common Stock to Orion Parrott in reliance on Section 4(2) of the Securities Act, for consideration of $400. The proceeds of this offering were used for general business purposes.
    • On September 3, 2015, we granted 705,883 shares of Common Stock in reliance on Rule 701 of the Securities Act, for consideration of $7,058.83. The proceeds of this offering were used for general business purposes.
    • In February and March 2016, three employees and consultants exercised options granted under the 2015 Equity Incentive Plan to purchase 22,133 shares of Common Stock in reliance on Rule 701 of the Securities Act, for consideration of $221.
    • In March and May 2016, we granted two start-up accelerators a total of 411,404 shares of Common Stock for a total purchase amount of $4,114 as a part of the accelerators signing SAFE agreements with the company.
    • On September 1, 2016, we granted 798,196 shares of Common Stock to Michael Romano in reliance on Section 4(2) of the Securities Act, for consideration of $7,981.96. The proceeds of this offering were used for general business purposes.
    • In September 2015, the company issued a SAFE agreement for $25,000 in reliance on Section 4(2) of the Securities Act, for consideration of $25,000. The proceeds of this offering were used for general business purposes.
    • In 2016, the company issued additional SAFE agreements for a total of $662,300 in reliance on Section 4(2) of the Securities Act, for consideration of $662,300. The proceeds of this offering were used for general business purposes.

    Valuation

    The company determined the valuation cap, discount, and interest rate of the Crowd Notes in this offering internally based on its own assessment of the company's current and future value, as well as relative risk for investors investing in similarly situated companies. The Crowd Notes may convert to equity securities of the company in the future if the company engages in future equity financings. At that time, the valuation of the company will be determined through negotiations with prospective investors. Those prospective investors may determine the value of the company through one or multiple methods which include:

    Liquidation Value — The amount for which the assets of the company can be sold, minus the liabilities owed ;

    Book Value — This is based on analysis of the company’s financial statements, usually looking at the company’s balance sheet; and

    Earnings Approach — This is based on what the prospective investor will pay (the present value) for what the prospective investor expects to obtain in the future.

    Market Landscape

    We calculate our total addressable market size using two ways:

    998,000 mortgage origination workers * $15/loan application/month *24 loan apps per loan officer * 12 months = $4.3B TAM.

    Lots of room for revenue expansion into other services. Sliced another way, we are building a replacement for the loan processor role. This person is paid an average of $500/loan application and there will be 9.5M applications in 2017. Capturing this value leads to a $4.75B TAM for loan processing / origination services.

    Growth forecast based on value added services that we will integrate over the next 3 years and the transition from a primarily human labor workforce to origination teams with productivity augmented by connected financial services such as Lendsnap.


    The cost to originate a loan has skyrocketed in the past five years due to increased regulation and the need for support staff to collect and organize an growing amount of borrower documentation. In fact, lenders lose a third of their production capacity and profitability on the support staff needed to take a loan from origination to closing. With margins shrinking and costs rising, mortgage brokers, lenders, and banks are looking for a solution to automate document collection while providing a safer and enhanced borrower application experience.

    As lenders complete the retooling of their processes and businesses as required by regulatory reform after the 2008 recession, including TRID and guidance by the CFPB, they are now more than ever ready to partner with fintech firms to build competitive advantage through new technology. Lendsnap is middleware for lenders, from credit unions to direct to consumer lenders, to online brokers, we are powering the move to digital mortgage technology.

    The second major market force beyond regulation is consumer familiarity with account aggregation. Mint pioneered aggregation into the Personal Financial Management (PFM) vertical in the mid-2000s. Since then, they were acquired by Intuit and now boast over 15M users. Many other PFM tools rely on account aggregation, i.e. building connections into consumer bank accounts, to deliver value to consumers. Notable success stories include Wealthfront, Betterment, Personal Capital, Paypal, and Credit Karma, all with millions of users. In short, consumers are now acclimated to linking their financial accounts when they derive sufficient value. This also gives us the potential to build massive financial data stores.

    This year, the CFPB has come out strongly in favor of startups to defend the rights of consumers to access such benefits. At Lendsnap, we participated in Plaid's efforts to support the CFPB in its current tack: https://plaid.com/documents/Plaid-Consumer-Data-Access-RFI-Industry-Cover-Letter.pdf?utm_source=RFI+thank+you&utm_campaign=ae31aa4655-EMAIL_CAMPAIGN_2017_02_23&utm_medium=email&utm_term=0_7f769bc4ac-ae31aa4655-128545509

    Our primary competitors include Roostify and Blend. They are both going after top lenders with an integrated solution that is based on transactional data and not original electronic documents. We target the long tail of 14,000 brokers and lenders with a streamlined solution that they can sign themselves up for online and start in a single day. We are optimized to serve 80% of the market, now focused on the niches of non-agency loans and brokers who cannot afford extended integrated solutions and who need original electronic documents to keep their loans completely liquid on the secondary market. No other account aggregator has lender self-signup. Launching this service in March will drive massive growth.


    Risks and Disclosures

    We are selling convertible notes that will convert into shares or result in payment in limited circumstances, and in certain circumstances only at the option of the company. These notes do not have a maturity date and only convert or result in payment in limited circumstances.  If there is a merger, buyout or other corporate transaction that occurs before a qualified equity financing, investors will receive a payment of the greater of two times their purchase price or the amount of preferred shares they would have been able to purchase using the valuation cap.  If there is a qualified equity financing (and only a financing using preferred shares will count for this purpose), the conversion price will be set for conversion into non-voting shares of a to-be-determined class of preferred stock. Only major investors will have their notes converted at this time, notes held by non-major investors will only convert at the sole discretion of the company or in the event of subsequent corporate transaction. Further, the notes convert at a discount of 15%, or based on a valuation cap meaning investors would be rewarded for taking on early risk compared to later investors. But you won’t know how much your investment is worth until that happens. The outside investors at the time of conversion, if any, might value the company at an amount well below the $6 million valuation cap, so you should not view the $6 million as being an indication of the company’s value. Further the interest on the notes is accrued interest, therefore you will not be paid interest payments on these notes.  If you choose to invest, you should be prepared that your notes will never convert and will have no value. 

    The auditor has issued included a “going concern” note in the reviewed financials. We may not have enough funds to sustain the business until it becomes profitable. Even if we raise funds through a crowdfunding round, we may not accurately anticipate how quickly we may use the funds and if it is sufficient to bring the business to profitability. The company is in the process of preparing its federal and state taxes for 2015 and 2016.

    It is unclear how the Crowd Note would be interpreted by a court if we were forced into litigation. We are using Crowd Notes in this offering. Crowd Notes are designed to offer equity in the company at a future date when specified conditions occur and Crowd Notes for certain investors only convert at the sole discretion of the company. It is unclear how a court or arbitrator would interpret the provisions of the Crowd Note. Should we be forced to litigate the terms of the Crowd Note, it is possible that a court would not interpret the note as we do, thereby impacting the terms of the investment and possibly providing greater rights to some investors and lesser rights to others.

    We have not assessed the tax implications of using the Crowd Note. The Crowd Note is a type of debt security that does not include a set maturity date. As such, there has been inconsistent treatment under state and federal tax law as to whether the Crowd Note can be considered a debt of the company, or the issuance of equity. Investors should consult their tax advisers.

    Any valuation at this stage is difficult to assess. Unlike listed companies that are valued publicly through market-driven stock prices, the valuation of private companies, especially startups, is difficult to assess and you may risk overpaying for your investment. In addition, there may be additional classes of equity with rights that are superior to the class of equity being sold.

    Computer malware, viruses, hacking, phishing attacks, and spamming could harm our business and results of operations.  As a web app that links to consumer accounts to gather pay stubs, W2-s, tax returns, bank statements, and other documents that contain personal information, we may be the subject of computer malware, viruses, hacking, phishing attacks, and spamming. Should we be unable to effectively manage these attacks and threats to user information, we may experience harm to our reputation and our ability to retain existing users and attract new users

    Limited intellectual property protection may cause us to lose our competitive advantage and adversely affect our business. We do not currently hold any patents. We have applied for one provisional US patent. There is no guarantee that we will be able to obtain patent protection,. It may also lead to copying of our technology. Policing such unauthorized use is difficult and the steps taken may not prevent misappropriation of the technology.  In addition, effective protection may be unavailable or limited in some jurisdictions outside the United States, Canada and the United Kingdom. Litigation may be necessary in the future to enforce or protect our rights or to determine the validity and scope of the rights of others.  Such litigation could cause us to incur substantial costs and divert resources away from our daily business, which in turn could materially adversely affect the business.

    We are controlled by our officers and directors. Our President and CEO, Orion Parrott, currently holds 58.27% of our Common Stock, and at the conclusion of this offering will continue to hold 58.27% of the company’s Common Stock. Our Vice President of Business Development, Michael Romano, currently holds 20% of our Common Stock, and the conclusion of this offering will continue to hold 20% of the company’s common stock. Our founder, Orion Parrott, is also the company’s sole director and has broad discretion in running the business.  There is no oversight, no additional parties to act as checks and balances, and no need for third party input. Investors in this offering will not have the ability to control a vote by the interest holders or the board of directors.

    The company will likely need more money. The company might not sell enough Notes to meet its operating needs and fulfil its plans, in which case it may cease operating, which could lead to the total loss of your investment. Even if it sells all the common stock it’s offering now, it will probably need to raise more funds in the future, and if it can’t get them, the business could fail. Even if it does make a successful offering in the future, the terms of that offering might result in your investment in the company being valued less, because later investors might get better terms and the issuance of additional shares may dilute your proportional ownership.

    We have a number of competitors more established than we are. There are other companies providing services similar to ours. Some of these companies are large established companies with resources far superior to ours. Accordingly, they may be able to attract customers and clients faster than we can.

    You may have limited rights. The company has not yet authorized Preferred Stock, and there is no way to know what voting rights those securities will have. In addition, investors who are considered a non-major investor under the terms of the notes offered, and therefore you will receive shares of a Shadow Series with certain limited rights. Shadow Series shareholders may receive a different liquidation preference, may not have voting rights, and will receive quarterly business updates by the company but may be limited in other information and inspection rights.

    The Crowd Note contains dispute resolution provisions which limit your ability to bring class action lawsuits or seek remedy on a class basis. By purchasing a Crowd Note this offering, you agree to be bound by the dispute resolution provisions found in Section 6.  Those provisions apply to claims regarding this offering, the Crowd Notes and possibly to the underlying securities of the Crowd Note. Under those provisions, disputes under the Crowd Note will be resolved in arbitration conducted in Delaware.  Further, those provisions may limit your ability to bring class action lawsuits or similarly seek remedy on a class basis. 

    You can’t easily resell the securities. There are restrictions on how you can resell your securities for the next year. More importantly, there is no market for these securities, and there might never be one. It’s unlikely that the company will ever go public or get acquired by a bigger company. That means the money you paid for these securities could be tied up for a long time. 

    General Risks and Disclosures

    Start-up investing is risky. Investing in startups is very risky, highly speculative, and should not be made by anyone who cannot afford to lose their entire investment. Unlike an investment in a mature business where there is a track record of revenue and income, the success of a startup or early-stage venture often relies on the development of a new product or service that may or may not find a market. Before investing, you should carefully consider the specific risks and disclosures related to both this offering type and the company which can be found in this company profile and the documents in the data room below.

    Your shares are not easily transferable. You should not plan on being able to readily transfer and/or resell your security. Currently there is no market or liquidity for these shares and the company does not have any plans to list these shares on an exchange or other secondary market. At some point the company may choose to do so, but until then you should plan to hold your investment for a significant period of time before a “liquidation event” occurs. A “liquidation event” is when the company either lists their shares on an exchange, is acquired, or goes bankrupt.

    The Company may not pay dividends for the foreseeable future. Unless otherwise specified in the offering documents and subject to state law, you are not entitled to receive any dividends on your interest in the Company. Accordingly, any potential investor who anticipates the need for current dividends or income from an investment should not purchase any of the securities offered on the Site.

    Valuation and capitalization. Unlike listed companies that are valued publicly through market-driven stock prices, the valuation of private companies, especially startups, is difficult to assess and you may risk overpaying for your investment. In addition, there may be additional classes of equity with rights that are superior to the class of equity being sold.

    You may only receive limited disclosure. While the company must disclose certain information, since the company is at an early-stage they may only be able to provide limited information about its business plan and operations because it does not have fully developed operations or a long history. The company may also only obligated to file information periodically regarding its business, including financial statements. A publicly listed company, in contrast, is required to file annual and quarterly reports and promptly disclose certain events — through continuing disclosure that you can use to evaluate the status of your investment.

    Investment in personnel. An early-stage investment is also an investment in the entrepreneur or management of the company. Being able to execute on the business plan is often an important factor in whether the business is viable and successful. You should be aware that a portion of your investment may fund the compensation of the company’s employees, including its management. You should carefully review any disclosure regarding the company’s use of proceeds.

    Possibility of fraud. In light of the relative ease with which early-stage companies can raise funds, it may be the case that certain opportunities turn out to be money-losing fraudulent schemes. As with other investments, there is no guarantee that investments will be immune from fraud.

    Lack of professional guidance. Many successful companies partially attribute their early success to the guidance of professional early-stage investors (e.g., angel investors and venture capital firms). These investors often negotiate for seats on the company’s board of directors and play an important role through their resources, contacts and experience in assisting early-stage companies in executing on their business plans. An early-stage company may not have the benefit of such professional investors.

    Lendsnap's Form C

    The Form C is a document the company must file with the Securities and Exchange Commission, which includes basic information about the company and its offering and is a condition to making a Reg CF offering available to investors. It is important to note that the SEC does not review the Form C, and therefore is not recommending and/or approving any of the securities being offered.

    Download Lendsnap's  Form C

    Frequently Asked Questions

    About Side by Side Offerings
    What is Side by Side?

    A Side by Side offering refers to a deal that is raising capital under two offering types. This Side by Side offering is raising under Regulation CF and Rule 506(c) of Regulation D.


    What is a Form C?

    The Form C is a document the company must file with the Securities and Exchange Commission (“SEC”) which includes basic information about the company and its offering and is a condition to making a Reg CF offering available to investors. It is important to note that the SEC does not review the Form C, and therefore is not recommending and/or approving any of the securities being offered.

    Before making any investment decision, it is highly recommended that prospective investors review the Form C filed with the SEC (included in the company's profile) before making any investment decision.


    What is Rule 506(c) under Regulation D?

    Rule 506(c) under Regulation D is a type of offering with no limits on how much a company may raise. The company may generally solicit their offering, but the company must verify each investor’s status as an accredited investor prior to closing and accepting funds. To learn more about Rule 506(c) under Regulation D and other offering types check out our blog and academy.


    What is Reg CF?

    Title III of the JOBS Act outlines Reg CF, a type of offering allowing private companies to raise up to $1 million from all Americans. Prior capital raising options limited private companies to raising money only from accredited investors, historically the wealthiest ~2% of Americans. Like a Kickstarter campaign, Reg CF allows companies to raise funds online from their early adopters and the crowd. However, instead of providing investors a reward such as a t-shirt or a card, investors receive shares, typically equity, in the startups they back. To learn more about Reg CF and other offering types check out our blog and academy.


    Making an Investment in Lendsnap
    How does investing work?

    When you complete your investment on SeedInvest, your money will be transferred to an escrow account where an independent escrow agent will watch over your investment until it is accepted by Lendsnap. Once Lendsnap accepts your investment, and certain regulatory procedures are completed, your money will be transferred from the escrow account to Lendsnap in exchange for your shares. At that point, you will be a proud owner in Lendsnap.


    What will I need to complete my investment?

    To make an investment, you will need the following information readily available:

    1. Personal information such as your current address and phone number
    2. Employment and employer information
    3. Net worth and income information
    4. Social Security Number or government-issued identification
    5. ABA bank routing number and checking account number (typically found on a personal check or bank statement)

    If you are investing under Rule 506(c) of Regulation D, your status as an Accredited Investor will also need to be verified and you will be asked to provide documentation supporting your income, net worth, revenue, or net assets or a letter from a qualified advisor such as a Registered Investment Advisor, Registered Broker Dealer, Lawyer, or CPA.


    What is a Crowd Note?

    The Crowd Note is a security which allows crowd investors to largely realize the same economic benefit traditional investors have historically received when investing in startups. For a convertible note round, investors under $20,000 will have their investment convert into preferred equity at liquidity event, locking in a share price at a discount to the next priced round, and will have an interest rate on their investment. Investors investing $20,000 and over will convert into preferred equity at the subsequent priced round at a discount to that priced round and will have an interest rate on their investment. For a priced round, investors under $20,000 will have their investment convert into preferred equity at a liquidity event, locking in the share price of the current round.


    How much can I invest?

    An investor is limited in the amount that he or she may invest in a Reg CF offering during any 12-month period:

    • If either the annual income or the net worth of the investor is less than $100,000, the investor is limited to the greater of $2,000 or 5% of the lesser of his or her annual income or net worth.
    • If the annual income and net worth of the investor are both greater than $100,000, the investor is limited to 10% of the lesser of his or her annual income or net worth, to a maximum of $100,000.

    Separately, Lendsnap has set a minimum investment amount of US $500.

    Accredited investors investing $20,000 or over do not have investment limits.


    After My Investment
    What is my ongoing relationship with the Issuer?

    You are a partial owner of the company, you do own shares after all! But more importantly, companies which have raised money via Regulation CF must file information with the SEC and post it on their websites on an annual basis. Receiving regular company updates is important to keep shareholders educated and informed about the progress of the company and their investment. This annual report includes information similar to a company’s initial Reg CF filing and key information that a company will want to share with its investors to foster a dynamic and healthy relationship.

    In certain circumstances a company may terminate its ongoing reporting requirement if:

    1. The company becomes a fully-reporting registrant with the SEC
    2. The company has filed at least one annual report, but has no more than 300 shareholders of record
    3. The company has filed at least three annual reports, and has no more than $10 million in assets
    4. The company or another party purchases or repurchases all the securities sold in reliance on Section 4(a)(6)
    5. The company ceases to do business

    However, regardless of whether a company has terminated its ongoing reporting requirement per SEC rules, SeedInvest works with all companies on its platform to ensure that investors are provided quarterly updates. These quarterly reports will include information such as: (i) quarterly net sales, (ii) quarterly change in cash and cash on hand, (iii) material updates on the business, (iv) fundraising updates (any plans for next round, current round status, etc.), and (v) any notable press and news.


    How can I sell my shares in the future?

    Currently there is no market or liquidity for these shares. Right now Lendsnap does not plan to list these shares on a national exchange or another secondary market. At some point Lendsnap may choose to do so, but until then you should plan to hold your investment for a significant period of time before a “liquidation event” occurs. A “liquidation event” is when Lendsnap either lists their shares on an exchange, is acquired, or goes bankrupt.


    How do I keep track of this investment?

    You can return to SeedInvest at any time to view your portfolio of investments and obtain a summary statement. If invested under Regulation CF you may also receive periodic updates from the company about their business, in addition to monthly account statements.


    Other General Questions
    What is this page about?

    This is Lendsnap's fundraising profile page, where you can find information that may be helpful for you to make an investment decision in their company. The information on this page includes the company overview, team bios, and the risks and disclosures related to this investment opportunity. If the company runs a side by side offering that includes an offering under Regulation CF, you may also find a copy of the Lendsnap's Form C. The Form C includes important details about Lendsnap's fundraise that you should review before investing.


    How can I (or the company) cancel my investment under Regulation CF?

    For offerings made under Regulation CF, you may cancel your investment at any time up to 48 hours before a closing occurs or an earlier date set by the company. You will be sent a reminder notification approximately five days before the closing or set date giving you an opportunity to cancel your investment if you had not already done so. Once a closing occurs, and if you have not canceled your investment, you will receive an email notifying you that your shares have been issued. If you have already funded your investment, your funds will be promptly refunded to you upon cancellation. To cancel your investment, let SeedInvest know by emailing cancellations@seedinvest.com. Please include your name, the company's name, the amount, the investment number, and the date your made your investment.


    What if I change my mind about investing?

    If you invest under any other offering type, you may cancel your investment at any time, for any reason until a closing occurs. You will receive an email when the closing occurs and your shares have been issued. If you have already funded your investment and your funds are in escrow, your funds will be promptly refunded to you upon cancellation. To cancel your investment, please email us at cancellations@seedinvest.com. Please include your name, the company's name, the amount, the investment number, and the date your made your investment.