SeedUps

SeedUps

With home offices in California and New York, SeedUps is a crowdfunding platform that matches technology startups with high net worth investors. Its target audience is entrepreneurs who have an idea for a tech startup and need seed stage capital, or have a startup already in operation but need investment to push it forward to the next level of growth.

The Good

  • Model type
  • Fees
  • Maximum allowed raise
  • Deadlines
  • Receiving funds
  • Administrative work options

Model Type

SeedUps functions solely as an equity funding model. Many other crowdfunding platforms allow a personal as well as rewards model to appeal to family, friends, and customers for investment in their company-as well as create meaningful connections with investors. The lack of these two funding models may limit the scope of investors businesses can appeal to using the SeedUps platform.

SeedUps does allow investors to connect with users from LinkedIn and other social networks to discuss investment opportunities they see through the SeedUps platform. This is great news for startups on SeedUps as it gives tech businesses the ability to reach a larger group of potential investors. In addition to reaching a large group of investors, businesses are able to utilize SeedUps to directly communicate with potential investors. Businesses can run scheduled webinars allowing potential investors to gain further insight into the business and determine if it is an investment they would like to make.

Fees

As an All or Nothing funding type, SeedUps does not charge non-completion fees. They do pay what SeedUps calls a 5% "success fee" upon successful completion of a campaign AND sealing the deal with investors. Investors also pay what SeedUps calls a "matching fee" upon successful completion of a deal between them and a Startup. Although 5% may be on the upper end of flat fees taken, some crowdfunding places do charge more fees than this-including a non-completion fee.

Maximum Allowed Raise

SeedUps' main focus is matching technology startups seeking to raise a maximum of $500,000 with high net worth investors. Business startups are able to utilize their platform to raise between $25,000 and $500,000. Investors on this platform compete to get into deals with business startups by placing bids between $1,000 and $25,000, placing a valuation of the startup and eventually leading to an offer of funding from the lead investor.

Deadlines

SeedUps gives startups six (6) months-or 180 days-to successfully connect with and secure investors. This time frame is significantly longer than the 60 days allowed by most other crowdfunding platform. Allowing campaigns to run this length of time gives businesses the opportunity to adequately portray their business to potential investors and form relationships with interested parties. Six months is a long enough time to satisfy the inquiries of potential investors.

Receiving Funds

When the process closes, the startup is made an offer. Once an offer is agreed upon, the funds are transferred according to the (undisclosed) terms of SeedUp's standard term sheet/ offer of investment.

Administrative Work Options

SeedUps does not provide administrative work options to startups on the front end. The tasks involved with dealing with investors during the 180 day process is up to the Startup staff. SeedUps does, however, provide administrative assistance on the back end. Once the agreement is made between the Startup and Investor(s), SeedUps's reporting software makes sure that investors are kept informed periodically about their investments. When the process closes, the startup is made an offer and SeedUps' legal team organizes the paperwork.

The Bad

  • Fund type

Fund Type

An All or Nothing fund type is utilized by SeedUps. Businesses must reach their funding goal in order to receive funding. Typically this is not a negative with other funding models, but with SeedUp's equity funding model, this may be frustrating to new businesses just starting out who are able to partially reach their monetary goal but are unable to receive funds. Since many startups take whatever monies they raise-be it a large amount or a few pennies-to invest in what they can to get them to the next step of growth, despite how small, SeedUp's six- month time period can leave a brand new startup dead in the water. Also, during this six months, chances are a startup is not raising money or pitching to other investors so if they fall short of the goal, they haven't grown, either.

The Bottom Line

SeedUps is an excellent crowdfunding platform for tech savvy startups in need of funding between $25,000 and $500,000. For brand new startups, the six month process may be riskier than some equity crowdfunding platforms, but for businesses looking for high net worth investors, SeedUps provides valuable tools necessary to adequately explain their business and connect with these investors.

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