Seed Equity Founder Reveals Investment Process
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Seed Equity Ventures, one of the sponsors of this site, operates an SEC/Finra registered broker dealer and crowdfunding site for seed stage companies. The firm’s founder, Todd Crosland, shared with me the firm’s investment process.
The process has six discrete steps:
First Contact: Most contacts come through the firm’s network of venture capitalists, accelerators, angel investors and entrepreneurs. Getting introduced via one of these sources is the most effective way to get your deal in front of the firm.
Screening: Before getting serious about an opportunity, the firm conducts a brief evaluation of the company’s technology, business model, founders, market and financials. If everything looks good on the surface, the firm moves to step 3.
Due Diligence: At this stage, the firm conducts what can be a months-long process of evaluating in-depth the company’s technology and IP, the business model, management, market and exit strategies. The firm will also run background checks on the management team and key owners.
Investment: The investment step includes the negotiation of a transaction at a valuation and under terms that will be acceptable both to the firm and the company.
Mentorship: Seed Equity looks to help its portfolio companies grow and succeed. The firm will actively work to leverage its relationships to help the company grow and find future rounds of capital.
Exit: The ultimate financial goal for the firm is to help the entrepreneur achieve a successful exit, usually through an IPO (initial public offering) or M&A transaction (sale of the company to a strategic buyer).
This process is not unusual in venture circles and similar processes are being used by some other players in the crowdfunding space.
On Thursday, May 26, 2016 at 2:00 Eastern, Todd will join me for a live discussion about the investment process Seed Equity uses to screen investments, close deals and move their portfolio companies forward toward successful exits. Tune in here then to watch the interview live. Post questions in the comments below or tweet questions before the interview to @devindthorpe.
More about Seed Equity Ventures:
Seed Equity Ventures is a registered broker dealer with the U.S. Securities and Exchange Commission and a member of both FINRA and SIPC, providing investment banking services to startups and growth companies from around the world. Seed Equity believes the best entrepreneurs in the world should be funded, no matter who they are or where they live. Investors throughout the world, should have a voice to choose what the future should look like. They should be able to support entrepreneurs who will build that future. Seed Equity was founded to provide growth equity to entrepreneurs and their startups in exciting industries globally.
Todd Crosland, Seed Equity Ventures
A seasoned entrepreneur, Mr. Crosland has demonstrated the ability to build successful teams and companies. Mr. Crosland was the Founder, Chairman and CEO of Interbank FX, LLC (“IBFX”; www.IBFX.com), from 2001 until he sold the firm in 2011. IBFX was a Futures Commission Merchant and Retail Foreign Exchange Dealer registered with the U.S. Commodities Futures Trading Commission. IBFX was also authorized and regulated by the Australian Securities and Investments Commission.
IBFX was a worldwide leader in retail Forex trading services. IBFX offered individual traders, fund managers and institutional customer’s proprietary technology and tools to trade Forex online. IBFX saw Global customers grow to over 40,000, in more than 140 countries. Annual trading volume reached $750 billion. IBFX had 120 employees and offices in Beijing, China; Seoul, South Korea; Sydney, Australia; Salt Lake City, Utah and London, England.
IBFX and Mr. Crosland have received many awards, including: The Ernst and Young Entrepreneur of the Year Award and numerous Inc. 500 awards.
Mr. Crosland holds a B.A. in Business (Business Finance) from the University of Utah. He also currently holds the following Securities Licenses: Series 7, 24, and 63 and previously held series 3 and 30 Licenses.
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