With the JOBS Act just passed, Internet-based funding is now legal for small businesses. SeedVo prioritizes direct, traditional interaction with video presentations.
Thanks to recent legislation, a fresh startup hopes to connect other small firms to investors via the Internet in previously unleveraged ways. The newly-passed JOBS Act has several provisions to help small businesses raise capital and generate jobs. Examples of these measures include allowing “small companies to raise up to $1 million in a 12-month period and preempt state blue sky laws,” as well as allowing for “general solicitation or general advertising to find accredited investors.” Listing and presentation website SeedVo creates a space where entrepreneurs and investors can meet on a traditional level with advertisements and short video pitches. "Entrepreneurs and small businesses have wanted to use the Internet to seek investors for years," said Lamb. "We can now use websites like SeedVo.com and reach a wide audience of potential investors."
Businesses and investors deal directly together
Entrepreneurs and businesses can use SeedVo by using the free or paid membership options. Both parties can post their website and a brief description for free, and premium members get full page listings and video pitches. SeedVo does not charge a finder’s fee get a commission if the company is funded - all dealings are made between the business and the investor. While it is unclear what types of advertising SeedVo will utilize, the site will have some curation. As Lamb explained, “All PAID entrepreneur advertisements are featured for the first days on the site, then they drop down as more ads are purchased.”
General crowdfunding sites not adapted for small business funding
SeedVo works very differently from a crowdfunding site, for it connects the two participating parties directly and gives them control over the interaction. Before sending a business plan, the site terms page recommends the entrepreneur have the investor sign an NDA. "Major crowdfunding sites are not designed for small business investing," says founder Lisa A. Lamb. Some are only for artistic and project cause fundraising, and prohibit small business funding. “The provisions granted to entrepreneurs by the JOBS Act allows them to benefit more from using sites like SeedVo.com to find investors rather than crowdfunding sites." Eschewing the crowdfunding workflow also avoids several pitfalls - confidentiality, fund dispersal, etc.