Many new startups are bringing fresh ideas to the payments and commerce industry today. But lack of funding can lead to innovative ideas not seeing the light of day. Many entrepreneurs face the challenge of pitching investors and are not able to sell them on what they have to offer. Moreover, it is difficult to know what focus areas investors are looking at and where their interests lie. To overcome these issues, there are companies who have created well established platforms to bring together investors and entrepreneurs. Not only do they provide an ideal communication medium, but they also handle the financial-specifics related to the investment process, making things far easier and better, especially for entrepreneurs entering the market for the first time with hope for funding.
Here are some companies that towards facilitate equity financing for early stage companies:
The company offers a crowdfunding platform where entrepreneurs can get access to seed capital and supporting services. Once a project is submitted on the Angel.me platform, it is screened for compliance with angel.me's terms and conditions by the team. If the project has enough potential to get financing through crowdfunding, the project is then featured online.
When the total amount has been crowdfunded the funds are transferred to the entrepreneur and the project is considered as fully funded. Angel.me’s online platform, which is publiclly accessible, offers entrepreneurs a cost-effective and market oriented method of attracting seed capital.
Many Silicon Valley entrepreneurs face problems in attracting the attention of angel investors and AngelList is aimed at solving this issue. AngelList offers an online forum where startup founders can not only post their ideas but also interact with investors for equity financing opportunities. In 2013, 500 companies raised around $125 million through the site. Startups can create a detailed profile on AngelList and pitch investors as well as financial firms. AngelList itself handles the entire regulatory paperwork and charges a fee only when a start-up is acquired or goes public.
The company’s ideology is to change the development of consumer products through equity crowdfunding. Companies, selling consumer products, are not able to raise the interest of investors like private equity firms and are in need of a scalable crowdfunding campaign. CircleUp works towards fulfilling this need. CircleUp has established relationships with a number of private equity players as well as consumer packaged goods companies. The company has helped over 30 companies raise over $30 million.
Gust emerged as a platform replacing angelsoft.net which was used by 600 angel investor groups, 35,000 angel investors, and 125,000 startups. On Gust, entrepreneurs can create their own profile, update their company information, build an investment relations site for their startup, collaborate on funding, and most importantly, get connected with angels interested in funding their efforts. The company has integrated powerful investor relations tools with direct access to the largest community of established, organized investors, thus supporting the entire ‘pitch-to-exit’ business life cycle.
SecondMarket simplifies private securities transactions. Its online portal enables private companies and investment funds to customize, control and seamlessly execute primary and secondary transactions. SecondMarket is backed by premier investors, including FirstMark Capital, The Social+Capital Partnership, Li Ka-shing Foundation, Temasek Holdings, New Enterprise Associates (NEA) and Silicon Valley Bank. Through the use of a sophisticated online platform, secure communication tools and high-touch support from market specialists, SecondMarket provides companies and funds with integrated solutions and unparalleled control over their transactions.
SharesPost has created one of the largest, most active networks of shareholders, investors, issuers and entrepreneurs by offering products and services for late-stage, venture-backed private growth companies. With more than $2 billion in closed transactions, SharesPost provides clients with access to information and liquidity. SharesPost has established a joint venture with NASDAQ OMX Group to create NASDAQ Private Market, the next-generation online platform to manage private securities transactions.