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Caplinked has a great team and is a great service for startups! Congrats to both teams.
2 years ago on Tweets-for-Equity Startup Wahooly Just Got a Little More Secure with CapLinked Partnership
@Paul__Walsh I agree with your comments about charging. Our new process in July will remove that so it should cover a lot of your concerns. As far as the "gatekeeper" as a broker/dealer we can't adopt the kickstarter model to allow any company into the system. They can do that because it is a donation and doesn't deal with direct investments. We have a fiduciary duty to the investors to make sure that the deal is suitable for investing. That means we need to complete a due diligence process which involves reviewing financial, forecasting financials, burn rate, use of funds, reviewing articles of incorporation, corporate setup and more. That takes too long to let everyone in. Once due diligence is over the funding docs need to be completed. Because of that we will always filter the companies. Over time with the new crowdfunding laws there will be ways in which the "crowd" can help with the filtering and we will utilize those when the SEC finalizes the laws.
2 years, 3 months ago on An Open Invitation: How One Startup Is Looking to Change Angel Investing
@adamjacksonsf Hi Adam,
As a broker/dealer we are required to know our investors and their financial background so that we can ensure that the investments we present to them are suitable. I hope that as you hear about us from sites like Pando Daily and the rest of our coverage you can get comfortable with answering some of the questions and get access to the deal flow.
@Iwanttobeanon Thanks for reading the article, checking out our website and offering the suggestion. Our current process is to charge $100 for a company to submit their company for funding. If we review and think it is a fit then we charge $250 for due diligence. After that MicroVentures pays for the cost of an offering and only gets a reimbursement if we successfully raise. Our costs could be 7K to 10K so there is a significant cost to put up one of our deals. We pay for this because startups don't have the capital to pay these fees when they are looking for money but we do ask to be reimbursed some of the expenses when we complete a raise. Just to give you an idea of the costs we incur we pay $3,000 to $5,000 for funding documents, $3,000 for escrow and then there are registration fees.
We currently get 5 or more deal requests per day and to properly review each one it takes time and we want to spend a lot of time on each of them. Starting in July we will have a new process for startups to submit their company to us which will not have any up front costs because we do realize that any expense is too much for a startup.