MicroVentures

Last updated
MicroVentures
Founded1 October 2009  OOjs UI icon edit-ltr-progressive.svg
FounderBill Clark
Headquarters
Austin; San Francisco
Key people
Tyler Randall Gray (COO)
Services equity crowdfunding
Website microventures.com

MicroVentures is an equity crowdfunding website that offers investments in early stage companies. It connects accredited investors with startups, businesses and services looking to raise funds or participate in select secondary market opportunities. [1] [2] [3]

Contents

MicroVentures is the only major equity crowdfunding site that is a broker-dealer registered by the Financial Industry Regulatory Authority (FINRA) [4] [5] and the first to take a portfolio company to a successful exit. [6] [7] [8] As of October 2013, MicroVentures had raised $20 million, spread among 45 companies [9] including Twitter, Facebook, and Yelp (before they reached the public markets). [10] [11] [12]

History

Founding

MicroVentures was founded by Bill Clark in Austin, Texas, in 2009. [13] Prior to starting MicroVentures, Clark worked as a credit-risk manager with GMAC Inc., PayPal, and Dell Financial Services (DFS). [6] [14] Clark decided to found the company after witnessing the contraction in small-business credit opportunities following the 2008 financial crisis. [15] MicroVentures completed FINRA's application process in 2010. [6]

Growth

In August 2012, Tim Sullivan, then president of SharesPost, an online marketplace for trading shares of private companies, joined MicroVentures as its CEO to help scale the company. [6] [16] Under Sullivan, deal volume rose to over $1 million per month by January 2013, [17] and by September 2013 MicroVentures had doubled in size and completed a successful round of fundraising on its own platform. [13]

In March 2013, MicroVentures worked with the LAUNCH Festival to develop the first mobile crowdfunding app that would allow investors to show their interest in backing entrepreneurs at fundraising events. [4] [5] [18] [19] The company plans to eventually offer real time investing in startups through mobile. [19]

In February 2015, MicroVentures introduced a 500 Startups Fund while announcing 25,000 global investors who have deployed over $60 million to approximately 100 companies by way of the MicroVentures platform. [20]

In 2017, MicroVentures moved office locations to 11601 Alterra Pkwy #100, Austin, TX 78758.[ citation needed ]

Services

Company listing & due diligence

MicroVentures funds startups from different industries including technology, consumer products and services, healthcare, media and entertainment, and telecommunications. [21] MicroVentures looks at prospective early stage companies using a variety of success criteria – such as suitable risk, likelihood of profitability, and other key due diligence factors. [1] [4] MicroVentures accepts less than 0.5% of companies who apply for listing on the platform. [13] If a company is selected for listing, MicroVentures then posts the results of their due diligence for investors to review. [4] [22] [23] The average company listed on MicroVentures raises $250,000; outliers have raised over $1 million. [13] [19] Microventures takes a 10% fee (5% from the issuer and 5% from investors) from each successful raise plus 10% carry. [13] If the full amount of an offering is not raised, then all investor money is returned. [23]

Investors

MicroVentures accepts both accredited investors and sophisticated non-accredited investors on its platform. [12] [24] MicroVentures speaks to every investor who signs up by phone to determine that they are accredited investors or meet suitability requirements. [13] MicroVentures counts more than 10,000 accredited investors on the platform, including a "meaningful number" of international investors. [13] The typical minimum investment is $5,000. [6]

Broker-dealer services

As a FINRA registered broker-dealer, MicroVentures may legally sell shares of companies on their own. [6] Competing platforms require a third-party middleman to sell shares. [6] [19]

Notable offerings

Primary offerings

MicroVentures completed funding of its first three companies in April 2011, raising a total of $150,000. [24] [25] The first project was Republic Project, a cloud based platform to help advertisers manage digital-media campaigns. [6] In October 2013, Republic Project sold to Digital Generation for a total of $14.5 million. [8] The sale represented the first liquidity event, or "exit," for investors in an equity crowdfunded company. [8]

In April 2013, Graphicly raised $300,000 on MicroVentures. [26] Overall, Graphicly has raised $1 million over two separate rounds on MicroVentures. [6]

Secondary offerings

In July 2011, MicroVentures raised a $500,000 fund to invest in Facebook through the purchase of private company shares on secondary markets. [11] [12]

In November 2011, MicroVentures raised $100,000 for private shares of Yelp at a price of $6 to $7 a share. [12]

Beginning in February 2012 and continuing through shortly before the company's IPO, MicroVentures offered shares of Twitter on its platform. [10] The company saw demand in excess of 300 times the number of shares available. [10]

See also

Related Research Articles

Seed money, also known as seed funding or seed capital, is a form of securities offering in which an investor puts capital in a startup company in exchange for an equity stake or convertible note stake in the company. The term seed suggests that this is a very early investment, meant to support the business until it can generate cash of its own, or until it is ready for further investments. Seed money options include friends and family funding, seed venture capital funds, angel funding, and crowdfunding.

Novator Partners LLP is a British private equity investment firm based in London owned by Björgólfur Thor Björgólfsson.

A series A round is the name typically given to a company's first significant round of venture capital financing. The name refers to the class of preferred stock sold to investors in exchange for their investment. It is usually the first series of stock after the common stock and common stock options issued to company founders, employees, friends and family and angel investors.

<span class="mw-page-title-main">Bain Capital Ventures</span> American venture capital division within Bain Capital

Bain Capital Ventures LLC is the venture capital division within Bain Capital, which has approximately $160 billion of assets under management worldwide. The firm's early-stage investments have included Attentive, Bloomreach, Billtrust, Docusign, Flywire, LinkedIn, Justworks, Turbonomic, Rent the Runway, Twilio, Rapid7, and Redis. Bain Capital Ventures manages $10 billion of committed capital, has over 400 active portfolio companies, and has offices in New York City, Palo Alto, and San Francisco.

Greycroft is an American venture capital firm. It manages over $2 billion in capital with investments in companies such as Bird, Bumble, HuffPost, Goop, Scopely, The RealReal, and Venmo. Greycroft was founded in 2006 by Alan Patricof, Dana Settle, and Ian Sigalow. The firm is headquartered in New York City and Los Angeles.

Andreessen Horowitz is a private American venture capital firm, founded in 2009 by Marc Andreessen and Ben Horowitz. The company is headquartered in Menlo Park, California. As of April 2023, Andreessen Horowitz ranks first on the list of venture capital firms by assets under management.

Seedrs is an online equity crowdfunding company, headquartered in East London's Tech City, founded in 2009 and launched by Jeff Lynn and Carlos Silva in 2012. Since 2022 it has been a subsidiary of American crowdfunding company Republic.

CircleUp is a financial technology company based in San Francisco that focuses on consumer goods startups. Since its official launch in April 2012, CircleUp has helped several consumer companies raise equity, including Back to the Roots, Halo Top Creamery, Little Duck Organics, Rhythm Superfoods and others. General Mills has an investment fund that is partnered with CircleUp to invest in companies listed on the platform.

<span class="mw-page-title-main">AngelList</span> Website connecting startups, angel investors, and job-seekers

AngelList is a U.S. website for fundraising and connecting startups, angel investors, and limited partners. Founded in 2010, it started as an online introduction board for tech startups that needed seed funding. Since 2015, the site allows startups to raise money from angel investors free of charge. Created by serial entrepreneur Naval Ravikant and Babak Nivi in 2010, Avlok Kohli has been leading AngelList as its CEO since 2019.

Return on Change (RoC) is an equity crowdfunding platform that connects investors with innovative and socially conscious startups. Return on Change works with startups that operate in five sectors, each of which touches on sustainability in some way: cleantech, edtech, life sciences, social enterprises, and technology. An online equity crowdsourcing platform, RoC helps socially conscious ventures raise capital.

SeedInvest is an equity crowdfunding platform that connects startups with investors online. The company was founded in 2012 and launched in 2013. SeedInvest has focused on building liquidity in the platform by attracting high-net-worth individuals, family offices and venture capital firms. SeedInvest screens and vets deals before allowing them to take advantage of the JOBS Act exemption permitting General Solicitation. In September 2014 the company launched a partnership with Angel Investing website Gust. In October 2018, SeedInvest was acquired by peer-to-peer payment company Circle Internet Financial Ltd.

Onevest, a New York–based investment crowdfunding site for startups that was acquired by Business Rockstars in April 2018, allowed entrepreneurs to raise capital from accredited investors. In July 2014, startups launching on Onevest had collectively raised over $66 million.

Equity crowdfunding is the online offering of private company securities to a group of people for investment and therefore it is a part of the capital markets. Because equity crowdfunding involves investment into a commercial enterprise, it is often subject to securities and financial regulation. Equity crowdfunding is also referred to as crowdinvesting, investment crowdfunding, or crowd equity.

<span class="mw-page-title-main">Carousell (company)</span> Mobile and online marketplace

Carousell is a Singaporean smartphone and web-based consumer to consumer and business to consumer marketplace for buying and selling new and secondhand goods. Headquartered in Singapore, it also operates in Malaysia, Indonesia, the Philippines, Cambodia, Taiwan, Hong Kong, Macau, Australia, New Zealand and Canada. Carousell is available on both iOS and Android devices.

In the United States under the Securities Act of 1933, any offer to sell securities must either be registered with the United States Securities and Exchange Commission (SEC) or meet certain qualifications to exempt it from such registration. Regulation A contains rules providing exemptions from the registration requirements, allowing some companies to use equity crowdfunding to offer and sell their securities without having to register the securities with the SEC. Regulation A offerings are intended to make access to capital possible for small and medium-sized companies that could not otherwise bear the costs of a normal SEC registration and to allow nonaccredited investors to participate in the offering. The regulation is found under Title 17 of the Code of Federal Regulations, chapter 2, part 230. The legal citation is 17 C.F.R. §230.251 et seq.

EquityZen is an online marketplace for trading pre-IPO employee shares from privately held companies. The platform often links employees from private companies with investors who would not otherwise be able to invest in the company prior to an IPO. EquityZen is based in Manhattan's Flatiron District.

<span class="mw-page-title-main">Funding Societies</span>

Funding Societies is a Southeast Asia’s digital financing platform for small and medium-sized enterprises (SMEs), headquartered in Singapore. It was the first such platform in Singapore to engage an escrow agency to independently and safely manage investors’ funds. In Indonesia it is known as Modalku. Since its launch, it has disbursed more than US$2.6 billion in business financing to MSMEs through more than 5.1 million loan transactions.

EnergyFunders is an energy-focused FINTECH crowdfunding company that started with oil and gas.

Groundfloor is an American real estate investing and lending marketplace. It was the first real estate crowdfunding company to achieve SEC qualification utilizing Regulation A+ since the regulation became operable through the JOBS Act.

Rally is an alternative asset investment company which allows users to buy and sell equity shares in collectible assets. The company was founded in 2016 and is headquartered in New York.

References

  1. 1 2 "New Peer to Peer Venture Capital Investing Website Launches in Austin, TX".
  2. ↑ Calnan, Christopher. "Austin entrepreneur launches online investment matchmaking". Austin Business Journal.
  3. ↑ Shah, Semil. ""In The Studio," MicroVentures' Tim Sullivan Crowdfunds Retail Angel Investments In Startups". TechCrunch.
  4. 1 2 3 4 "MicroVentures' App to Match Startups and Investors". Business Week. Archived from the original on March 6, 2013.
  5. 1 2 "Prepare to crowdfund at Launch Festival with a MicroVentures sponsored mobile app". Venture Beat.
  6. 1 2 3 4 5 6 7 8 9 Colao, J.J. "In The Crowdfunding Gold Rush, This Company Has A Rare Edge". Forbes.
  7. ↑ Weston, Julien. "MicroVentures Marketplace gains first Peer-to-Peer FINRA license". VC Vibe.
  8. 1 2 3 "MicroVentures Brings First Equity CrowdFunded Company to Exit".
  9. ↑ Thomas, Myra. "Online Platforms Connect Tech Firms & Angel Investors". Dice.
  10. 1 2 3 Panzarino, Matthew. "Twitter Could Price IPO Well Above New $23-$25 Range, After Strong Private Market Interest". TechCrunch.
  11. 1 2 Wauters, Robin. "MicroVentures Raises $300,000 Fund To Invest In Facebook On Secondary Markets". TechCrunch.
  12. 1 2 3 4 Hawkins, Lori. "Austin-based online investing firm MicroVentures continues growth, raises $150,000 for expansion". Statesman.
  13. 1 2 3 4 5 6 7 Sandlund, Jonathan. "MicroVentures Snapshot: Startup Crowdfunding Platform". Crowd Cafe.
  14. ↑ Hay, Timothy. "New Service Aims To Enable 'Peer-To-Peer' Early Investing". The Wall Street Journal.
  15. ↑ Ankeny, Jason. "Venture Funding, One Dollar at a Time". Entrepreneur.
  16. ↑ Gage, Deborah. "In Management Shake-Up, SharesPost Exec Departs for MicroVentures". Wall Street Journal.
  17. ↑ Hoge, Patrick. "Startups battle to serve new investors". San Francisco Business Times.
  18. ↑ Tsukayama, Hayley. "Crowdfunding, from your Smartphone". Washington Post.
  19. 1 2 3 4 Kolodny, Lora. "MicroVentures Mobile App to Match Startups and Investors". Wall Street Journal.
  20. ↑ "MicroVentures Launches 500 Startups Fund. Offers Investors Access to High Profile Incubator". Crowdfund Insider.
  21. ↑ Hay, Timothy. "New Service Aims To Enable 'Peer-To-Peer' Early Investing". Wall Street Journal.
  22. ↑ "Interview with Bill Clark, MicroVenture Marketplace". Texas Tech Pulse.
  23. 1 2 Renton, Peter. "My First P2P Venture Capital Investment". Lend Academy.
  24. 1 2 Watters, Audrey. "Crowdfunding Your Startup with MicroVentures". ReadWrite.
  25. ↑ Warren, Michele. "MicroVentures Funds First Three Deals". InformationWeek.
  26. ↑ Morrill, Danielle. "Graphicly Raises $300,000 Using MicroVentures P2P Funding Platform".
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.