Many projects on SeedInvest have a $1,000 minimum investment threshold, making the world of private equity substantially more approachable for newcomers. So, let's see how seedinvest works.
How seedinvest works
Startups make pitches to SeedInvest for the chance to raise money. This enables businesses to access a pool of institutional, accredited, family, angel, and venture capital investors.
Companies must successfully complete a vetting and due diligence step, according to the website, in order to be included on SeedInvest. Only about 1% of businesses succeed, therefore the businesses you find as an investor are the best startups available. Additionally, there are two ways to begin investing.
Invest in Individual Startups
You can go through available startups on the SeedInvest website and invest in them. Seven openings and a new company are available as of this writing.
The good thing about SeedInvest is that you may find businesses in various industries. Here are a few of the platform's current startup investment options as an illustration:
Cytonics Corporation: A biopharmaceutical company that's developing medications for osteoarthritis and other inflammatory conditions.
Drink Monday: A beverage brand that makes alcohol-free cocktails.
Fresh Bellies: A snack brand that creates healthy, savory snacks that are culturally-inspired.
iPost: A marketing automation company that focuses on franchises, associations, and publishers.
WAGE: A digital job networking platform for gig workers and their employers.
When you click on a listing, you may explore more details about the business to aid in your due research. You may view the amount raised, the minimum investment amount, and the pre-money valuation, for instance. Additionally, you can read the terms sheet and details regarding prior fundraising efforts, the pitch deck, the founding team, and the intended use of the proceeds.
Obviously, it also makes sense to conduct your own research given SeedInvest receives a cut of raises and has a vested incentive in effectively marketing these businesses. This include reading press releases, news articles, and conducting as much in-depth research as you can.
But at the end of the day, SeedInvest presents plenty of interesting startups to invest in. And its rigorous vetting process helps ensure you're only considering top candidates.
Invest on Autopilot
The Auto Invest function of SeedInvest, which enables you to build a varied portfolio of businesses, is its most unique feature. It's similar to a robo-advisor but just for private equity, which is hard to come by.
Here's how Auto Invest from SeedInvest works:
Minimum Deposit: Start with a $1,000 minimum deposit.
Invest: Automatically invest in startups when they meet certain thresholds for their raise ($250,000 if under Regulation D/CF or $2 million if under Regulation A+). There's a minimum investment amount per investment of $200, so your starting deposit can theoretically invest in five different companies with this starting amount.
Allocate Funds: SeedInvest lets you set up predetermined rules for how much you want to invest in new companies.
Grow Your Portfolio: Steadily invest in a diverse portfolio of startups the longer you use Auto Invest.
You can pause or restart Auto Invest as well. And if there's a company you want to invest more money in, you can always invest through the main deal page. There aren't fees for using Auto Invest. However, you pay the standard SeedInvest 2% processing fee, capped at up to $300 per trade.
I hope this article can provide you with a better understanding of how seedinvest works.
