27Jul

Five Attributes to Look for in A Startup Founder

Passionpreliminary-approval

When an entrepreneur is pitching you his or her business, their passion for the venture should be apparent from the time they open their mouth. They need to be fully committed to the mission and exemplify that they will do whatever it takes to see it succeed.

Experience

Has the founder started a company before? How successful was it? If he or she was able to grow a successful business prior to this venture, they know the ropes better than a first-time founder and have proven they have the dedication it takes to see a company endure.

Adaptability

Plans and challenges change frequently while building a company. Someone who can adapt and focus on the need of the customer, rather than refuse to abandon the original idea, will be more suited to build a winning company.

Persistence

Acquiring customers and making sales is not an easy task when a company is getting off the ground. When the founder is likely one of just a few employees, if not the only one, they will need to be persistent, tenacious and motivated to keep the company moving forward. Some will want to throw in the towel after hearing “no” several times. A successful founder will keep pushing through until they hear “yes.”

Communication

If you are to be an investor in their company, you want a founder who will be able to communicate issues and how he or she plans to solve them effectively. A founder should be in touch with his or her investors regularly, providing updates on the company and its progress.

08Jul

Investing in Startups: The Process on the Seed Equity Platform

joe-investorRegistering as an Investor

We currently only have offerings listed for accredited investors (individuals with a net worth, excluding their primary residences, of at least $1 million or consistent personal annual incomes of at least $200,000). However, non-accredited investors are now able to register on our platform for access to Regulation CF deals, which we plan to offer in the near future.

Become a registered investor here: https://www.seedequity.com/Investors/RegisterAsIndividualOrEntity

Customizing Your Investor Profile

During the on-boarding process we will ask questions to help you customize your experience on the platform. You can tell us about your investment goals and what portion of capital you have put aside to invest in startups.

Browsing Investment Offerings

The companies raising capital on the Seed Equity platform change regularly as companies meet their funding goals and we onboard new ones.

Due Diligence

Investing in early-stage companies is inherently risky. While the Seed Equity team does due diligence on each company it brings on the platform, its important for you as an investor to do your own. Leverage the data rooms of the companies you’re interested in where you can review documents and learn more about the founding team. We offer webinars presented by company founders who provide details on their company. You can also contact the founder directly through our platform to ask specific questions.

Making an Investment

When you click the “invest” button on a startup’s profile you will be directed through a process that allows you to complete an investment. You can invest as an individual or through an entity such as a LLC, IRA or Trust. Once you confirm the investment, the funds will be transferred into an escrow until the fundraising is closed. Once the round closes, you will receive confirmation of success with a link to the counter-signed legal agreements if applicable.

Managing Your Portfolio

Stay up to date on the progress of the startup you invested in by visiting the profile page and reading updates from the founders. Many investors practice portfolio diversification by investing across multiple startups and industries to mitigate risk. Watch for startups in different industries on the platform, and plan for making additional investments accordingly.

For more details on the process of investing in startups via Seed Equity, watch this interview: http://goodcrowd.info/how-invest-starups/

07Jul

Investment Criteria: Tips on Pitching Your Startup to the Seed Equity Team

In 2015, we reviewed over 600 pitches from startups and launched eight of those on our platform for funding. Here are some tips to help your pitch meet our investment criteria.

Proven Management

We look closely at the management team, in particular for solid founders who have a proven track record of building a successful company. We look for founders that are passionate and optimistic, while also understanding the challenges that early startups face.

The Market

We seek companies that are competing in markets of at least $1B. A company that is working to disrupt a large market that hasn’t seen much innovation is a plus.

Business Model

Companies pitching our investment team must convey that their business model is well thought-out with at least minimal validation, is scalable and sustainable.

Traction

In general, a startup must have traction and growth in users, revenue or both. Significant month-over-month growth is something we look for.

Exit Strategy

We look for investments that have several potential exits, specifically between two and five years after the initial investment. Potential exits include a sale, merger, spin-off or IPO. Our team has experience in founding, selling and purchasing companies and will use that experience to help our startup companies find the best possible exit for their business.