How You Can Invest in Startups
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Todd Crosland, CEO of Seed Equity Ventures, shared some insights about investing in startups on the platform. While these steps are tuned to the Seed Equity platform, keep in mind that the process is similar across most all startup investing websites.
STEP 1: Sign Up and Join Seed Equity
At this time, Seed Equity only accepts investments from accredited investors, those well-healed investors with a net worth (excluding their primary residences) of at least $1 million or consistent personal annual incomes of at least $200,000. Seed Equity is evaluating interest from ordinary investors to participate under the newly issued rule for Regulation Crowdfunding.
A growing number of platforms now accept investments in startups from ordinary investors. Learn more here.
STEP 2: Customize Deal Flow
We will ask questions during your on-boarding process to help customize your Seed Equity experience according the preferences you indicate.
Customize your investment goals by telling us how much you have put aside to invest and what portion of that you would like to invest in startups.
STEP 3: Browse Investment Opportunities
At any given time, the companies listed at Seed Equity Ventures will change as deals are funded and new opportunities are listed.
STEP 4: Do Your Homework
Investing in startups is inherently risky. It is important for you to do your own independent due diligence to mitigate those risks.
Take a closer look at the companies that you’re interested in. Get to know the companies by leveraging the Seed Equity team and connect with the companies’ founding team members. Take a deeper dive into the due diligence materials uploaded to the data room or offering circulars.
STEP 5: Make Investment
Click the “INVEST” button on the startup’s profile page and follow the steps to complete your investment.
You can invest as an individual or through an entity (such as LLCs, IRAs, or Trusts).
Once you confirm your investment, the funds will be transferred to an escrow account for safe-keeping until the fundraising is closed. Once the fundraising round closes, you will receive confirmation of success and a link to the counter-signed legal agreements if applicable. Upon the completion of certain closing mechanics and compliance checks, the funds will be transferred to the startup.
STEP 6: Manage Your Portfolio
Making your first investment is just the beginning of building a portfolio of private company investments on Seed Equity.
Many investors practice portfolio diversification and invest across multiple (10, 15, or more) startups and industries to mitigate risk. Keep an eye out for companies in different industries and come up with a plan for adding additional investments over time.
Also, stay up-to-date by returning to Seed Equity to read updates from your portfolio companies.
On Thursday, June 16, 2016 at 1:00 Eastern, Todd will join us for a live discussion about the investment process to provide you with insights into becoming successful startup investors. Tune in here then to watch the interview live. Post questions in the comments below or tweet questions before the interview to @devindthorpe.
More about Seed Equity Ventures:
Seed Equity Ventures is a registered broker dealer with the U.S. Securities and Exchange Commission and a member of both FINRA and SIPC, providing investment banking services to startups and growth companies from around the world. Seed Equity believes the best entrepreneurs in the world should be funded, no matter who they are or where they live. Investors throughout the world, should have a voice to choose what the future should look like. They should be able to support entrepreneurs who will build that future. Seed Equity was founded to provide growth equity to entrepreneurs and their startups in exciting industries globally.
Todd Crosland, Seed Equity Ventures
A seasoned entrepreneur, Mr. Crosland has demonstrated the ability to build successful teams and companies. Mr. Crosland was the Founder, Chairman and CEO of Interbank FX, LLC (“IBFX”; www.IBFX.com), from 2001 until he sold the firm in 2011. IBFX was a Futures Commission Merchant and Retail Foreign Exchange Dealer registered with the U.S. Commodities Futures Trading Commission. IBFX was also authorized and regulated by the Australian Securities and Investments Commission.
IBFX was a worldwide leader in retail Forex trading services. IBFX offered individual traders, fund managers and institutional customer’s proprietary technology and tools to trade Forex online. IBFX saw Global customers grow to over 40,000, in more than 140 countries. Annual trading volume reached $750 billion. IBFX had 120 employees and offices in Beijing, China; Seoul, South Korea; Sydney, Australia; Salt Lake City, Utah and London, England.
IBFX and Mr. Crosland have received many awards, including: The Ernst and Young Entrepreneur of the Year Award and numerous Inc. 500 awards.
Mr. Crosland holds a B.A. in Business (Business Finance) from the University of Utah. He also currently holds the following Securities Licenses: Series 7, 24, and 63 and previously held series 3 and 30 Licenses.