Overview
SeedInvest is a free online crowdfunding platform, basically its leading equity platform. SeedInvest allows investors like you and me to invest in venture capital of small companies and start-ups.
According to SeedInvest founder Rayan Feit, the company is the first company in America that allows investors of all kinds to invest in startup companies and private companies. By providing this great opportunity.
SeedInvest has literally invited everyone in the investing world.
Experts even describe it as the future of funding start-ups and private companies.
| Service | SeedInvest |
| Founded | 2011 |
| Investment type | Venture |
| Sectors | Intelligence, finance, Gaming, Hardware, Artificial, Manufacturing, Mobile, Retail, Robotics, Transportation, VR, Cannabis and Drones. |
| Minimum Investment | $500 |
| Audience | All investors |
| Investor Fees | 2% per each investment |
| Due Diligence Process | Pre diligence |
| Securities Offered | Startups securities |
| Investor resources
| Blog and the company documents |
| Pros | · Available for accredited and non-accredited investors
· Competitive due diligence and vetting process · Auto invest feature up to 25 startup · Multiple funding offers for founders and startups · Low minimum investments · Offer Reg CF, Reg D and Reg A+ |
| Cons | · High transaction fees
· No mobile access · Not recommended for investors who want liquidity investments and work with a timeline less than 5 years |
Types of investment that SeedInvest offer
Investors must understand what SeedInvest offers and its key features before proceeding. SeedInvest specializes in providing funds and investment opportunities for startups.
And that is what its founders believe in. They believe that revolutions start with small beginnings and SeedInvest offers the chance of standing out.
Yet, Seedinvst accepts only 1%-2% from the applied startup.
Back to my point, before proceeding with SeedInvest. Participants must have an awareness of the ways of investing with SeedInvest.
For start-up companies
SeedInvest has made significant and fundamental changes in the American market by offering live start-up investment opportunities. This offer includes both accredited and non-accredited investors. Plus, the participant must at least have a net worth of $1 million and annual income equal to or more than $200.000
For start-up companies investment there are two options with SeedInvest.
Reg CF and Reg D.
The main difference between those two key features here is that Reg D has no limits for the raised fund. While the First option Reg CF limits for raised funds is $1 million.
By doing that, Seedinvet offers crowdfunding resources for early-stage companies and helps them raise the necessary funds for a greater return in the future.
An additional feature of SeedInvest is the side-by-side offerings. What’re side-by-side offerings?. It’s an offer that allows you to use both Reg CF and Reg D to raise your fund.
Auto investment option
For an auto-invest account, this offer was made for inexperienced investors and participants who find it hard or complicated to pick up and organize their portfolios. With the auto investment account, you don’t have to get worried about what to divide or not. Seedinvets’s auto accounts will pick up and diversify your account automatically
To be eligible for using SeedInvest auto account, you must ;
- Have a minimum of $1000
- Deposit a minim of $200 for each investment you make
- Pay 2% processing fees whenever the company invest on your behalf
Some of the key features with the SeedInvest Auto account
- Flexibility: Easy to use, invest, and have control over your investment. That’s how SeedInvest functions. You will have control over your investment, including choosing when to out or close an investment if you are no longer interested.
- Diversification: Startup investment carries a great level of risk. But with a SeedInvest auto account, you ensure that your portfolio is perfectly allocated with great return investment opportunities.
- Highly Vetted companies: Highly vetted means that SeedInvest is selective when it comes to signing with new startup companies. That will lower the risk of investment and increase the growth potential.
Start your raise
Before SeedInvest it was extremely hard for startups to grow and take a seat in the American market. But, all of it has changed now. And all the credit goes for SeedInvest, and its “start your raise” offer. Start your raise is one of the three offers that SeedInvest provides, it allows startups to raise money and fund their projects. At first, this option seemed strictly only for startups, but SeedInvest included a second option.
Refer a founder, the second option that SeedInvest uses to pick up and select new companies.
Some of the offers key features
Placement fee 7.5% of the raised money in SeedInvest
Equity fee 5% of the raised money in SeedInvest
Side by side startups must accept investment from all customers including accredited and non-accredited. Startups must also raise $250.000 to $3 million in 2 months and a half.
Accredited only: not alike side by side, startups accept only accredited investors and must raise $½ million in 2 months.
What do you get when investing with SeedInvest?
Your first question here should be why I should invest in SeedInvest? It makes sense you should identify the reasons before the gains.
As stated previously, SeedInvest is considered a leading crowdfunding platform. The platform accepts only high vetted investment opportunities, which means 1% of the total startup’s application. Plus, flexibility and portfolio diversification. A diverse portfolio contains various types of securities, and here is the gain with SeedInvest.
Once a person invests in a specific start-up of security he will obtain private equity of that company. His return depends completely on the company’s performance over the years. That usually takes 5-7 years. If the company stake increases the investor will receive his return on a preferred payment which he decides could be cash or stock. It is more accurate to say that SeedInvest offers direct and simple agreements for future equity.
How does SeedInvest Make money?
SeedInvest made a revolutionary move in the US market, it gave startups the chance to stand out publicly. If the funded companies earn a return so will SeedInvest. How is that?
For example, let’s take 4 startups that Seddinvest accepted as a highly vetted company and made a huge success.
- Virtuix : raised $7.300.000
- Vengo : raised $700.000
- Snapcard : raised $675.000
- Now RX : raised $20.000.000
As you can see, some of them raised millions and others thousands of hundreds of dollars. Nevertheless, there are fees that these companies must pay SeedInvest, and that’s how the company makes money.
First investors, must pay a non-refundable 2% fee for each investment they make, a minimum investment estimated by $300
As for the start-up, SeedInvest charges them the 7.5% placement fee and the 5% equity fees from the company-raised money.
Potential return and cash flow
There isn’t a specific answer to this question, only assumptions, and each assumption depends on what company you invest in and its performance. By checking out the SeedInvest website page, I found that its investment opportunities are considered as private placements, which means the registered startup in SeedInvest is not publicly traded yet. That comes with potential and high degrees of risk and money loss.
SeedInvest opportunities for startups are more likely a high-risk investment. Plus, experts don’t consider it as a perfect fit for investors who seek sustainable and liquid investment and returns.
However, there are some rare cases where investors were capable of achieving great returns. But, it requires a strong and carefully selected allocation.
The breadth of offerings in SeedInvest
By revisiting SeedInvest’s official webpage you will see that they made it clear the company accepts only 1% of the startup applicant. Only highly vetted companies must be accepted, and all companies must go through and pass a comprehensive due diligence process.
Moreover, Seddinvest has successfully made history in the American market. Because no platform was able to provide all investment types until SeedInvest was founded, I give some points for that. It was a bold move and revolutionary.
SeedInvest offers various and different types of startup securities and investment opportunities, and the best part is that everyone can participate.
Regulatory framework and due diligence expectations
When explaining the key features of SeedInvest, we mentioned that it offers Reg CF, Reg D, and Reg A+.
But what most of you aren’t aware of is that Reg regulations usually mean SeedInvest works with several affiliates and partners. Some find it confusing to understand
Companies that could use the regulation D & A+ must go through a comprehensive due diligence process to be highly vetted startups.
It’s an in-depth process that includes all the relevant information about the proceeding company. Whereas Reg CF means that the company isn’t fully vetted.
That is the confusing part about SeedInvest. Because of that, it’s recommended to do your own due diligence and research before investing with SeedInvest.
The positive thing here
While its due diligence is a bit confusing and foggy, the company has no record of scandals and frauds.
Conclusion
SeedInvest is changing the basics of startups in the American market. At the moment entrepreneurs and innovators have the chance to get their companies publicly.
SeedInvest offers funds and great returns, but it’s not guaranteed. The same goes for everyone, regular investors also are capable of investing in earning equity in the future.
Yet
There are no guarantees with SeedInvest because the gains depend entirely on the performance. Therefore founders and investors need to do the needed researches first.