Given its historical significance, our equity crowdfunding coverage would not be complete without some mentions of SeedInvest. Below we have an overview of the platform, some of its major achievements, information about its impending acquisition, and some alternatives you can consider.
What Is SeedInvest?
SeedInvest is a well-known equity crowdfunding platform. Since it first launched a decade ago, it has been a place for large, successful fundraising rounds. In fact, several alternative investment platforms used it to raise funds in their earlier days, including both FarmTogether and Groundfloor.
The company took a unique approach to the Reg CF, Reg A/A+, and Reg D fund raises that are offered on the platform. While each investment platform performs a level of diligence on the companies that apply to list on their platform, there is always a balancing act of quality, deal flow, revenue for the platform, and investor choice. While most well-known platforms had larger, growing slates of listings, SeedInvest always had a small number of investment opportunities available, but the listings always felt high-quality and worth looking at.
Major Achievements Of SeedInvest
Equity crowdfunding isn’t really that old. The JOBS act is the foundational legal framework that enables retail investors to invest in startups and private companies. That was only signed into law 11 years ago. SeedInvest launched the next year. Having been around really since the beginning, SeedInvest has some notable milestones and major achievements in the history of equity crowdfunding.
Accepting Non-Accredited Investors
Today, there is still a large divide in what investments accredited and non-accredited investors can participate in. For online startup investments that barrier came down significantly in 2015 when non-accredited investors were able to participate for the first time. The first company to open their doors to non-accredited investors was SeedInvest.
The extra accessibility helped get them on the air on CNBC, which is a level of mainstream visibility that alternative investment platforms rarely get.
Large, Successful Funding Rounds
SeedInvest garnered headlines as some high-profile companies were able to raise a massive amount of funds through their platform. The most infamous of those is NowRx. The company raised $20M in an oversubscribed round to set the record for largest SeedInvest raise. Some other notable fundraising successes include:
- Death & Co – $8.7M over 3 rounds
- Heliogen – $1.6M in 1 round
- Knightscope – $15.1M raised in 3 rounds
- Virtuix Omni – $22M raised across 5 rounds
First Billion Dollar + (Unicorn) Exit
Unlike traditional stock market investments, equity crowdfunding shares are generally illiquid. Basically, in order for investors to get a return the company has to be acquired or do an IPO on the public markets.
Equity crowdfunding is still relatively new and startups have high rates of failures, so the number of exits so far is somewhat limited. However, the end of 2021 brought a history-making exit to bear.
Heliogen raised $1.6M from 1000 SeedInvest investors in 2017 at a $20M pre-money valuation. The company would hit the public markets via a SPAC merger with a $2B valuation.
Not only was that truly impressive from an investment growth standpoint, it was also historic. It was the first equity crowdfunding exit at a valuation exceeding $1B. Another first for the industry, tied to SeedInvest.
Acquisition
SeedInvest, which was previously acquired by Circle in 2019, was once again acquired in 2022. Competing equity crowdfunding platform StartEngine announced their agreement to acquire the company at the end of October. Based on the expected timeline, this should complete before the second half of 2023.
Edit: The acquisition official closed on May 9, 2023 per StartEngine.
Alternatives To SeedInvest
As they are being acquired, going forward the alternatives to SeedInvest will be the same as the alternatives to StartEngine. The two leading alternatives would be Republic and Wefunder.
Republic
Republic is the alternative where SeedInvest users may feel most at home. Republic hosts a well-polished user experience across web and mobile. The platform charges no fees to investors and hosts a variety of offerings covering Reg CF, A/A+, and D for both accredited and non-accredited investors. There is good deal flow on the platform, but the volume is lower than that of StartEngine and Wefunder while remaining high-quality. Additionally, Republic has an automatic investing option and a secondary market in beta.
Wefunder
Wefunder boasts the strongest deal flow of any equity crowdfunding platform and has a range of different types of offerings on the platform. The quality of these listings is more variable, but there are some truly unique listings. For example, the ability to invest in a revenue share of an expedition to recover treasure from a historical, sunken ship. The platform mostly has deals available for non-accredited investors and many allow you to invest with as little as $100.
Conclusion
SeedInvest was a unique, significant, and historic company within the equity crowdfunding landscape. Unlike its acquisition by Circle which left the platform operating, this time the platform is going to merge into StartEngine and effectively disappear as an independent entity.
This is a potentially significant moment of consolidation within equity crowdfunding and shows that the industry continues to develop and evolve as it grows and matures.
Due to its impending acquisition, we won’t be providing ongoing coverage or additional resources for SeedInvest, other than to follow the progress of the acquisition itself.
