SeedInvest is one of the top platforms for equity crowdfunding to invest in startups. Founded in 2012, the company has been able to help provide more than $200 million in funding for its startups. The platform also has more than 300,000 investors.
For the most part, the deals on SeedInvest are larger, such as at the Series A level. This means the startups may raise more than $1 million.
No doubt, this focus can be an advantage. Often there is already market traction as well as backing from experienced venture investors. In other words, the risks are somewhat lower among crowdfunding deals.
But the minimum investment levels are still reasonable at about $1,000.
So, are you looking to invest in startups? If you are, here are seven interesting deals on SeedInvest right now:
- Good Earth Organics
Options to Invest in Startups: 4URSPACE
4URSPACE is a marketplace app that helps teams with the building out of commercial spaces. Note that the traditional approach involves multiple point systems that often do not integrate seamlessly. This can result in long delays and cost overruns. Even a small project can result in over 100,000 messages, files and photos.
That said, 4URSPACE is fairly straightforward. You can easily upload and share files and use task management. There is also group video calling to help with coordination as well as a live cam of the job site.
Overall, the app is definitely expansive. There are over 500 categories, such as architecture & design, glass/store front, civil engineering and so on.
In terms of traction, 4URSPACE has over 6,600 users in the U.S. who have created over 20,900 projects. In Europe, there are 300 users and 100 users in Asia/Middle East.
For the equity crowdfunding campaign, the company has raised over $70,000 and the valuation is at $5 million.
Good Earth Organics
Good Earth Organics develops and manufactures certified organic potting soils and soil nutrients. They are primarily targeted at indoor, hydroponic and outdoor cannabis and hemp growers. For the most part, Good Earth Organics allows for yields that are appropriate for both medical and recreational purposes. The soil blends are also approved by OMRI and Clean Green (these are third-party certifiers).
Moreover, one critical advantage for Good Earth Organics is that the company has been in the business for more than ten years — with experience in markets in California and Oregon. During this time, the company has built an large global network of suppliers.
Last year, revenues shot up by 43% to more than $3 million. And as for the first half of 2020, there was 49.75% growth and improved margins.
No doubt, the market opportunity is large. In fact, for adult-use and medical cannabis, the spending is expected to reach $30 billion by 2025.
Regarding the equity crowdfunding campaign, the company has raised nearly $480,000 and the valuation is $23.4 million.
Options to Invest in Startups: GROUNDFLOOR
GROUNDFLOOR operates a platform that offers investors high-yield, short-term debt for real estate assets. Yes, because of the Covid-19 pandemic, this asset class has been under pressure. But by having the protection of debt, this should help with the risks.
How does GROUNDFLOOR work? The company originates and underwrites the loans that are converted into investment securities, which are qualified by the SEC (Securities and Exchange Commission). By doing this, it is possible to sell the debt on a fractional basis for as low as $10.
Launched about seven years ago, GROUNDFLOOR has been able to generate 10% average annual returns. The debt investments cover 31 states and the annual volume is over $100 million.
The company has been able to raise over $22 million since inception, and some of the investors include venture capitalists like Fintech Ventures and MDO ventures. For the equity crowdfunding campaign, GROUNDFLOOR has raised almost $2.77 million from over 1,500 investors and the valuation is $73.9 million.
Content creation continues at a rapid clip. Last year, there were 1.5 million new books, 18 million podcast episodes and 116,000 streaming video programs.
But for content creators, this has also meant it has become extremely difficult to rise above the noise and get attention. That said, Booxby believes that AI (Artificial Intelligence) will be the solution.
By using sophisticated techniques like Natural Language Processing (NLP) and machine learning, the company has built a system that helps with understanding what users will like content, why this is the case and the size of the market. Interestingly enough, Booxby developed this system with the support of a grant from the National Science Foundation.
Currently, the company is focused on text material. But there are plans to eventually move into categories like video and podcasts.
For now, the company has minimal revenues as it is in the early stages of commercializing its technology. However, the estimate is for the top-line to reach $953.4 million next year.
Since 2015, Booxby has raised $1.1 million and one of the investors is Ingram Content Group, which is among the world’s largest wholesale distributors of books. As for the equity crowdfunding round, the company has raised $116,000 and the valuation has been set at $4 million.
Options to Invest in Startups: Jassby
If you want to invest in startups for your kids, Jassby is worth looking into. This company has built a fintech app for kids and teens. And yes, this is a big market. The annual spending is about $200 billion per year.
In turn, here’s how the Jassby app works. First, parents will setup an account and sign up their children, who will each receive a debit card (there are no monthly fees). The app allows for setting up recurring payments, such as for allowances and chores. Grandparents and other family members also have the option to send payments.
Additionally, some of the other features of the app include:
- Parental controls
- Shopping online or in-person wherever an Apple (NASDAQ:AAPL) card is accepted
- Financial planning tools and tutorials
- How does the company make money? There are two main revenue streams: commissions for in-app purchases and a 1.5% fee from merchants for any purchases on the cards.
Launched last year, the app has seen 450,000 installs and 175,000 registrations. As of April, the revenues hit about $37,000. But the company projects that the full-year results could be $2.9 million — but this may be a stretch.
Jassby has already raised $5.4 million from investors like Bloomberg Capital, Moneta Venture Capital, and Correlation Ventures. As for the equity crowdfunding campaign, the amount funded so far is $2.17 million at a $25.85 million valuation.
Cytonics is a biotech company that is developing diagnostics and therapeutics for osteoarthritis. The founder and chairman is Gaetano Scuderi, who is a medical doctor and has written more than 45 scientific papers.
He came up with the idea for Cytonics when he saw that joint pain was generally due to some compound that is formed when cartilage degrades because of arthritis. He also saw that alpha-2-macroglobulin (A2M) — a naturally occurring molecule in the body — could be useful in dealing with this. However, the problem is that the joints usually have low amounts.
With this insight, he set out to develop a treatment called APIC. It essentially improves the overall levels of A2M (it is injected once or twice a year). There are currently more than 7,000 patients that have used APIC.
Moreover, Cytonics is now developing a next-generation version of this treatment: CYT-108. It focuses on the creation of a new region within the A2M protein to get even better results. It is in preclinical trials.
Overall, the market for Cytonics is definitely large. According to the National Osteoporosis Foundation, there are about 10 million people in the U.S. who have osteoporosis and about eight million are women. Then there are 44 million that have low bone mass, which is a risk factor for the disease.
Cytonics has raised $15 million. There was also $4 million from Synthes, which is a division of Johnson & Johnson (NYSE:JNJ). As for the crowdfunding campaign, the company has raised more than $836,000 at a valuation of $46.7 million.
Options to Invest in Startups: Caliber
During the financial crisis of 2008, Chris Loeffler and Jennifer Schrader saw an opportunity to leverage the Internet for real estate investing. It was a gutsy decision, but it has definitely paid off.
The startup was Caliber, and it has become a strong player in its category. The platform allows individual investors to get exposure to long-term real estate investments, such as commercial properties, multi-family units, hospitality, warehouses and tax-advantaged opportunity zones.
A key part of the business is the focus on due diligence. This has certainly helped reduce the risk levels. But Caliber also has a strong team that manages the portfolio, which has a value of over $440 million. The returns have also been particularly strong, averaging 39%.
Note that the company has multiple revenue streams. They include management fees, brokerage commissions and carried interest (which is the profit generated from the portfolio).
Regarding the crowdfunding campaign, the company has raised nearly $3.3 million from those who invest in startups. The valuation is at $130 million.
On the date of publication, Tom Taulli did not have (either directly or indirectly) any positions in any of the securities mentioned in this article.
Tom Taulli (@ttaulli) is an advisor/board member for startups and author of various books and online courses about technology, including Artificial Intelligence Basics, The Robotic Process Automation Handbook and Learn Python Super Fast. He is also the founder of WebIPO, which was one of the first platforms for public offerings during the 1990s.
Investing through equity and real estate crowdfunding or asset tokenization requires a high degree of risk tolerance. Despite what individual companies may promise, there’s always the chance of losing a portion, or the entirety, of your investment. These risks include:
1) Greater chance of failure
2) Risk of fraudulent activity
3) Lack of liquidity
4) Economic downturns
5) Dearth of investor education
Read more: Private Investing Risks