The two companies believe that the joint initiative will allow each of them to benefit from the other’s strengths. SeedInvest and Gust are looking to offer startup investment opportunities to a huge range of investors. Founded in 2004, originally under the name Angelsoft, Gust has raised over $1.8 billion for over 200,000 different startups. The US angel investor network is home to over 1,000 investment organizations in more than 80 countries. And now the SeedInvest platform is primed to benefit from the curiosity of this swarm of investors.
Gust CEO David Rose said:
“We are excited to be working with SeedInvest in order to empower investment organizations everywhere to streamline their existing investment processes. Expediting online syndication and execution will significantly improve the fundraising and investing process for the entire angel and startup ecosystem.”
The new arrangement between the two platforms will alert Gust investors to the investment opportunties on SeedInvest – while providing the platform’s entrepreneurs with a high level of exposure to sophisticated investors. That should ramp up the percentage of deals successfully funded via the platform. SeedInvest launched last year but the company has already funded roughly 20 start-ups. This relatively modest figure of businesses financed stems from a stringent vetting process for prospective fundraisers which has seen SeedInvest accept just 2% of applicants.
“Angel investors and entrepreneurs are the ones who truly fuel innovation. Together, SeedInvest and Gust hope to streamline early-stage fundraising and investing, hopefully accelerating the development of new, revolutionary technologies and job creation.”
At the present time only “accredited” investors — those with a net worth above $1 million, not including their primary home, or with income over $200,000 in each of the preceding two years — are legally allowed to participate in SeedInvest deals. To advance the partnership further both the companies may agree to open the doors to retail investors in the not too distant future.
Mergers, acquisitions and failures are an inevitable staple in the maturation of the industry. We’ve quite recently seen one emerge in the UK crowdfunding space between BuzzBnk and Trillion Fund. As is the case with both the UK union and the Gust/SeedInvest alliance, the general motivation is to open up new sources of platform users.