SeedInvest provides an equity crowdfunding site where your business can raise capital contributed by accredited investors seeking to help you grow your company, unlike other sites that focus more on individual ideas. While there is no limit to the industry, typical companies that use this crowdfunding platform are technological or consumer businesses, and most business are seeking anywhere between $100,000 and $5 million dollars.
After an investor decides to contribute to your campaign, the amount is transferred to an escrow account where it remains until your campaign reaches its funding goal. To receive funds, you must reach a certain percentage of your funding goal, which typically takes between 60 to 90 days. If you exceed your goal, investors may still contribute but you can choose not accept the pledged amount.
To create a campaign with SeedInvest is free, but other fees are applicable. There is a 7.5% fee on the total amount of funding raised and a 5% warrant coverage fee. There is also a fee of between $3,000 and $5,000 to manage escrow, marketing and legal expenses along with the company completing due diligence on accredited investors. While many services do not charge these additional fees, most also do not offer additional services, such as completing due diligence.
You repay your investors with equity stock in the company, given the campaign reaches the minimum goal. You can set a minimum investment size so that you have fewer investors involved with your campaign. The JOBS Act also dictates that no equity campaign may have over 2,000 accredited investors, so that would be the maximum either way.
In addition to the business crowdfunding platform, SeedInvest provides a community complete with a plentiful blog, tips and advice for raising capital and investing, should you choose to participate in that aspect. You can find information about the industry and the company in the SeedInvest Academy page, which includes a glossary and FAQs page as well.
SeedInvest is a solid business crowdfunding site where investors read about your company and its goal and invest to help your business grow. In return, they receive equity stocks, so they have personal interest in watching your business expand in do well. There are additional fees with this service, but those fees are well spent to streamline the process and improve your crowdfunding experience.