MicroVentures – Equity Crowdfunding – A Crowdfunding Platform for Accredited Investors
MicroVentures has distinguished itself as a Equity Crowdfunding Platform for angel investments on behalf of startup companies. There is a review process for both sides (investors and companies), in which applications are examined by the team for viability. Since 2009, MicroVentures has raised $20 million as a venture capital bank; it is probably the best crowdfunding website for startup investors and startup companies.
The management and customer service team is located in two United States hot spots for startups: San Francisco in California, and Austin in Texas. In San Francisco, CEO Tim Sullivan has been responsible for private equity transactions to the tune of $3 billion, and his impressive corporate resume includes leadership roles in both Oracle and IBM. President Bill Clark, on the Austin side of MicroVentures, has previously managed small business accounts in a $1 billion portfolio, and has a great deal of experience in risk management and merchant accounts. MicroVentures does have a good reputation for both technology offerings and customer service, and each of the team members (with 10 years of experience in their fields of expertise) are available by phone and email.
The investor advantage of this fundraising platform is clear. Instead of having to throw money into a bank for less than a 1% return, or wait for 20 years to develop a reputation for sniffing out good startups, it’s possible to put in $1,000 and see a large ROI. MicroVentures does make it clear to its 10,000 or so investors that the possible payout of peer-to-peer lending comes with a certain amount of risk. On the other hand, former clients of MicroVentures include such big names as Facebook, Graphicly, Twitter, and Yelp – it would be a shame to miss out on investing opportunities for companies that really make it big.
As a registered Broker-Dealer since 2011, MicroVentures is no stranger to risk, from screening out potential liabilities to discovering accredited investors. This fundraising platform requires a verbal conversation with potential investors, and only 5% of the companies that apply are eligible for funding. Firms who have supplied their own funding are given preference, as this seems a show of good faith that the company may turn a profit within the recommended time gap of one to three years.
The funding process takes a little longer to complete than other crowdfunding sites (between eight to sixteen weeks). Further differentiators include SEC disclosures (which are made about available shares for purchase) and the fact that investors must keep the shares that are purchased for at least one year. Lastly, instead of funding moving through either Amazon or Ebay, MicroVentures operates under more specified rules; contributions move through the well-regarded US Bank after being held in an escrow account.
Most of the companies who need the funding are looking for investment amounts between $100,000 and $500,000, so it makes sense that MicroVentures employes a careful screening process, from the business plan to founders’ expertise levels. Additional opportunities do exist for secondary market and private market options, though these are not advertised or made available on the MicroVentures crowdfunding platform. The chance for additional opportunities may counter-balance the cost to join, which includes a $100 application fee along with a $250 payment for due diligence, as well as a 10% commission rate. MicroVentures does cover the escrow fees and the cost of the funding documents.