Startup Investing for Angel Investors
MicroVentures offers investors a gateway to investment opportunities in pre-vetted early stage startups and also private secondary market equities. Traditionally these investments have been guarded by large Venture Capital Investment firms and banks. Not anymore. Now you can have access to the same deals they have, often with the same terms.
Before you can invest with MicroVentures, however, you are required by law to complete an investor suitability questionnaire to determine your accredited status. Upon completion, we will contact you by phone to confirm and verify your status. Once processed, your account will be activated and you can begin evaluating our exclusive private offerings for potential investment. Sign up is free and there is no obligation to invest in startups.Sign Up
Overview of the Funding Process
Review Offerings and Funding Documents
Once your account has been activated you will have instant access to our offerings and their funding documents. Both are reviewable online from your account at any time.
Pinpoint Investment Opportunity and Act
When you find an investment you like, you can invest online immediately. Or, if you have any questions, you have direct access to our team of Series 7 licensed representatives who can walk you through the process.
Funds in Escrow until Deal is Done
Once you've invested, your funds are held in a dedicated bank escrow account until the deal is closed. Our escrow provider is one of the largest providers of financial service escrows in the world.
Deal Closes and Gets Funded
Once the deal closes you will get a signed copy of your offering documents. You will also be able to access those documents on our website on your portfolio page.
How We Choose Companies
MicroVentures reviews startups with the same level of rigor as traditional Venture Capital companies. We screen all listing applicants using specific criteria – an evaluation of suitable risk, likelihood of profitability, willingness to give up an equity stake in exchange for capital, etc.—and select only the startups that fit a certain profile. The process looks like this:
- A Company Applies for Listing on MicroVentures: They provide us with key information about the company's business, products, team, financials, and a pitch deck summarizing their business.
- We Perform Institutional Level Due Diligence on the Company: The MicroVentures team examines every aspect of a company before it's listed on the platform. This includes criminal background checks on the founders, examination of a company's financial statements, and may even interview a company's customers. This helps us weed out fraudulent activity and make sure we only select the companies with the best possibility to succeed.
- We Negotiate on Your Behalf: MicroVentures will negotiate with startups we believe are pricing themselves too high so that our investors get the best value. If a startup won't compromise on a valuation, they may not get listed.
Ultimately, MicroVentures does all the heavy lifting and gives you all the data you need to make an informed investment decision.
How We Add Value & Attempt to Reduce Risk
Equity crowdfunding is a continually evolving space. We started raising capital for startups in 2011. Since then we have made over 160 investments and raised over $85M. We have led investment rounds and have had successful exits in both early and late stage investment opportunities.
We are a FINRA registered broker-dealer specializing in equity. In fact, every single employee who deals with the customer investing – from the Founder, to our investor relations team – has their Series 7 license and can discuss equity crowdfunding, investing in startups, and online investment opportunities.
Most equity crowdfunding platforms will take any startup they can get. We pick what we believe are the best startup investment opportunities to present to investors. It's easier to get into Harvard than it is to get listed on MicroVentures (Harvard has a 5% acceptance rate; we have a 1% acceptance rate).
Everyone knows that startup investing is risky. But it's currently much riskier than it needs to be since most equity crowdfunding platforms simply don't do any research or due diligence into the companies they list. MicroVentures completely rejects that idea. Every company we feature has been through multiple rounds of due diligence and professional analysis by our experienced financial team.
Even with all of our due diligence, startup investing is very risky. We want to help you in any way we can to understand if an investment is suitable for you. In fact, we love helping investors so much, our phone number is on the site. It actually works – call it and one of our licensed representatives will pick up and talk to you about anything you want.
Equity crowdfunding platforms may begin to accept non-accredited investors as a result of new JOBS Act Title III rules. However, MicroVentures has experience allowing non-accredited investors under other SEC regulations since 2011. In fact, we accepted non-accredited investors alongside venture capital investments for a portfolio company that was later acquired.
- What is the difference between a sophisticated and an accredited investor?
The SEC defines a "sophisticated investor" as an individual whose net worth does not exceed $1 million, who has investing experience, and who can make financial decisions without others' input. An "accredited investor" is defined by the SEC as:
- a natural person who has individual net worth, or joint net worth with the person's spouse, that exceeds $1 million at the time of the purchase, excluding the value of the primary residence of such person;
- a natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year; or
- a trust with assets in excess of $5 million, not formed to acquire the securities offered, whose purchases a sophisticated person makes.
- What type of documentation will I get when I purchase shares of a business?
- Upon purchase, you will receive a signed subscription agreement as proof of your investment in the fund. Additionally you will gain access to the business' profile page on our website, where the company will provide detailed investor information specific to the business (such as quarterly updates) if available.
- What factors does MicroVentures evaluate when determining if a business meets the criteria to be listed on the site?
- We look at the company's business plan, how it intends to use the funds, its profitability, the experience of the leadership team, industry, market size, competition, risk to investors and financials to determine whether the business is suitable for the MicroVentures platform.
- Will there be any personal guarantees made by the business owner?
- It's important to note there are no guarantees by the business owner to the investor. When you opt to invest in a company, you do so at your own risk.
- How will you determine the value of a business, and thus the private equity shares?
- To determine the business and share value, MicroVentures will look at financials, profitability, assets and what percentage of the business is being sold. Many times the price is already set by previous investors in a round and we are participating in that round at the same terms.
- How long will I be required to hold my shares?
- The requirement is one year based on SEC regulations. If funding is not completed, we will return your funds. The private market is very illiquid so you should be prepared to hold your investment for a longer period of time. The average exit for a startup is 7 years from inception.
- When the minimum time requirement has passed, how do I sell my shares?
- There is currently no market for selling your shares on the secondary market. You should plan on holding your investment until the company has an exit. If there is an emergency and you need to sell your shares please notify us and we will do everything we can to see if there is another buyer available.
- How often will I get updates on the companies in which I invest?
- The companies that we invest in provide us updates on a quarterly basis. We pass those updates along to our investors.
- When I invest in a business by purchasing shares, does MicroVentures take my funds immediately, or do you want until the target investment is reached?
- We place the funds in escrow immediately and then hold them until the funding is over. Once the money has settled, MicroVentures disburses it to the business.
- If I want to invest "more than the maximum" in a particular business, may I?
- If you want to invest a greater amount than the maximum allowance listed on the MicroVentures platform, send your request via email to: firstname.lastname@example.org. We will make every effort to assist you.