Mr. Faulkner went on to explain “many innovative ideas fail to get off the ground because of lack of funding at seed level, not because they’re bad ideas. The initial funding for many projects is often the hardest to raise, as banks see it as too high risk and venture capitalists and angel investors often see the project as not developed enough to stake larges chunks of capital.
Crowdfunding has been successful in the arts and creative industries, and by applying the principals to Accredited Investors across America, the concept can be used to develop American startups. 2009 estimates placed the number of start-ups to be 6.7million, but only 68,000 of these companies made it to be in a position to raise VC funding. Seedups aims to alleviate that problem by bringing together entrepreneurs raising seed funding and tech-savvy investors.
For start-ups, this means pitching their idea outside the traditional revenue streams, injecting much needed cash to develop ideas. Investors make bids through a blind auction, so only the keenest investors will make the cut, meaning the equity stake given up is smaller than by simply using one investor. All deals are sealed through a standard term sheet.
For investors, Seedups brings investment opportunities from around the world to you. Using a simple platform, investors can interact with start-ups, watch projects develop, make investments and come back for more. As the most you can stake in one project is $25,000 investors are able to diversify their portfolio and minimise the risk.
The service, which debuted in the UK and Ireland in February, has had a busy month. As well as opening the office in Silicon Valley, the company launched at the prestigious SxSW festival, and is running a $5,000 competition for entrepreneurs for 60 second elevator pitches.
Seedups is now calling on entrepreneurs and Accredited Investors to register for free at www.seedups.com and become part of the funding revolution.
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