A startup or start-up is a company or project undertaken by an entrepreneur to seek, develop, and validate a scalable business model. While entrepreneurship includes all new businesses including self-employment and businesses that do not intend to go public, startups are new businesses that intend to grow large beyond the solo-founder. During the beginning, startups face high uncertainty and have high rates of failure, but a minority of them do go on to become successful and influential, such as unicorns.
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.
Social venture capital is a form of investment funding that is usually funded by a group of social venture capitalists or an impact investor to provide seed-funding investment, usually in a for-profit social enterprise, in return to achieve an outsized gain in financial return while delivering social impact to the world. There are various organizations, such as Venture Philanthropy (VP) companies and nonprofit organizations, that deploy a simple venture capital strategy model to fund nonprofit events, social enterprises, or activities that deliver a high social impact or a strong social causes for their existence. There are also regionally focused organizations that target a specific region of the world, to help build and support the local community in a social cause.
A series A is the name typically given to a company's first significant round of venture capital financing. It can be followed by the word round, investment or 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.
An angel investor is an individual who provides capital to a business or businesses, including startups, usually in exchange for convertible debt or ownership equity. Angel investors often provide support to startups at a very early stage, once or in a consecutive manner, and when most investors are not prepared to back them. In a survey of 150 founders conducted by Wilbur Labs, about 70% of entrepreneurs will face potential business failure, and nearly 66% will face this potential failure within 25 months of launching their company. A small but increasing number of angel investors invest online through equity crowdfunding or organize themselves into angel groups or angel networks to share investment capital and provide advice to their portfolio companies. The number of angel investors has greatly increased since the mid-20th century.
Babak "Bobby" Yazdani is an Iranian-American entrepreneur and investor specializing in early-stage, private U.S.-based modern enterprise technology companies.
The Jumpstart Our Business Startups Act, or JOBS Act, is a law intended to encourage funding of small businesses in the United States by easing many of the country's securities regulations. It passed with bipartisan support, and was signed into law by President Barack Obama on April 5, 2012. Title III, also known as the CROWDFUND Act, has drawn the most public attention because it creates a way for companies to use crowdfunding to issue securities, something that was not previously permitted. Title II went into effect on September 23, 2013. On October 30, 2015, the SEC adopted final rules allowing Title III equity crowdfunding. These rules went into effect on May 16, 2016; this section of the law is known as Regulation CF. Other titles of the Act had previously become effective in the years since the Act's passage.
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.
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.
Crowdcube is a British investment crowdfunding platform, established by Darren Westlake and Luke Lang in 2011.
FundedByMe is a crowdfunding platform based in Stockholm, Sweden started by Daniel Daboczy, Arno Smit and Eric Weber. The company is active in Scandinavia with joint ventures in Finland, Poland, Malaysia, The Netherlands, Singapore and The United Arab Emirates. FundedByMe's native language is English, but users can list their project in any supported language. The company was founded in March 2011 by Arno Smit and Daniel Daboczy. In September 2012, the company decided to focus their core business on equity crowdfunding instead of its original approach with donation and loan based crowdfunding portal.
Companisto is a German equity-based crowdfunding website. It allows investors to invest in startup companies. In return, they become shareholders and are entitled to a share of any profits, as well as potentially benefiting from an exit.
Assetz Capital is a British company which makes property-secured loans to businesses. It was established in 2012 as a peer-to-peer or "marketplace" lender which allowed private and institutional investors to lend money directly to small businesses (SMEs) and property developers. In December 2022 it became solely funded by institutional capital for new lending.
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.
SyndicateRoom is a UK venture capital fund, headquartered in Cambridge, founded by Gonçalo de Vasconcelos and Tom Britton in September 2013. The company is authorised and regulated by the Financial Conduct Authority.
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.
Zencap was a German company, operating a peer-to-peer lending platform, which allowed private savers to lend money directly to small and medium-sized businesses in Germany, Spain, and the Netherlands. Using the crowdfunding model, the company based in Berlin, Germany aimed to create a direct link between private lenders and small businesses seeking loans. As of December 2014, Zencap had facilitated 5 million Euro in loans to small and medium-sized firms.
Crowdfunding is the practice of funding a project or venture by raising money from a large number of people, typically via the internet. Crowdfunding is a form of crowdsourcing and alternative finance. In 2015, over US$34 billion was raised worldwide by crowdfunding.
Crowdfunding in Estonia is a rapidly growing sector that allows individuals and organisations to raise funds for various projects through online platforms. While crowdfunding in Estonia holds significant potential and is appealing to both investors and entrepreneurs, it requires a careful approach to project selection and a thorough understanding of the associated risks.
