The jobs act promised small individual investors the ability to invest in the next Google. It also pledged founders an alternative route to raising money. Why should only the already rich get the benefits of investing in the next Google or Amazon?
Less risk for the new startup investors.
According to Entrepreneur, “Seventy-five percent of venture-backed startups fail.” Investing in startups is a risky affair, yet investors are will to take these risks because of the potential of significant upsides.
For founders, having a new source of capital has a definite upside.
Having access to crowdfunding platforms are not just for small startups anymore. As of 2018, “since its launch, nearly 1,000 companies have registered with the SEC on 50 platforms, and over $127 million has been committed to campaigns.”
Before acquisition the then SeedInvest CEO Ryan Feit previously said, “With over 37,000 accredited investors, SeedInvest is by far the largest platform in terms of the number of high net worth investors. Also, unlike other platforms, we have family offices, venture funds, and high net worth individuals who can write checks between $250,000 and $2 million.”
Platforms are changing; not all platforms are the same.
“This sets us apart from all other platforms and ultimately results in larger raises for startups on SeedInvest. We have never been interested in simply trying to list more startups than other platforms or generate the most investment volume. Historically we have only launched one percent of the startups that apply to raise capital, and we invest meaningful time in those startups we select.”
Andy Pandharikar, Commerce.AI CEO, said, “Commerce.AI is building a billion-dollar company. Part of our mission is to democratize artificial intelligence. We originally planned to raise an initial $100,000 on the platform a year ago. The opportunity was 700 percent oversubscribed. We literally had to turn down investors. This funding helped us grow our company while progressing our mission.”
Raising more money in a different way.
“Now, a year later,” says Andy, “we are back to raise more money. This time we are raising an additional $750,000 capital from SeedInvest. We want to offer seed investors the opportunity to be part of our success before institutional VC’s take all the allocation. We plan to raise a limited amount from SeedInvest first, and then get institutional investors for the rest as we scale revenue.”
According to Andy, “Since the last round, we have had 890 percent growth in revenue and achieved great customer success. We have signed paid deals with large enterprise brands such as Cisco, Chanel, Netgear, Coca Cola, Midea, USPS, and SC Johnson.” Overall, Andy continues, “We have been delighted with the seed funding process.”
New platforms allowing additional and varied investments levels will catapult opportunity in the crowdfunding space.
While not everyone will experience the same results as Andy and Commerce.AI, platforms like SeedInvest mean you no longer have to have a black book of contacts. No longer must you have a list brimming with top-tier Angel Investors or Venture Capitalists to help you build tomorrow’s technology today.
The bottom line is that crowdfunding platforms for startups might just be the best new way to secure the funding you need to make your entrepreneurial dreams a reality.