Business Startup

What Kind of Startup Investor is Right for Your Company?

While not all startups have to raise money to scale, most startups will need some investor money to grow. When it’s time to fundraise, there are many potential sources of funding for your startup. Today’s blog post will discuss different kinds of startup investor and explore other ways startups find the financial support they need to be successful.

What is an Angel Investor?

Angel investors are usually individuals, or groups of individuals, who invest their own money into early stage companies. “Seed funding” from angel investors is usually one of the first sources of financing a startup company will pursue (generally after raising initial funds from the founders and their friends and family). This seed funding is generally used to support the...

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Business Startup

News Roundup: Pioneer Square Labs; Fantasy Sports; and Google’s OKR System

What we were reading last week at InVigor:

Prominent Seattle investors raise $12.5M for ‘startup studio,’ Pioneer Square Labs

6 alternative ways to fund your business without an investor

Traffic-boosting SEO fundamentals for content marketing

Fantasy sports operator, DraftKings, is being investigated by the U.S. Justice Department and FBI to determine whether daily fantasy games are a form of online gambling

The efficient internal system Google uses to grade its employees and their exemplary tips to being a great boss

A simple formula for changing behavior and to strengthen leadership

Photo: Yoel Ben-Avraham | Flickr

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Litigation & Dispute Resolution

Website Leverages the “Crowd” to Finance Lawsuits with Crowdfunding

A few weeks back a new website was unveiled that uses crowdfunding to finance high-value commercial lawsuits. According to the Wall Street Journal and the company’s press release, LexShares connects accredited investors with plaintiffs in commercial lawsuits.

“Invest in Justice”

The company’s slogan suggests a novel idea in the crowdfunding world, and breaks away from the “traditional” reasons for raising capital through crowdfunding, which is raising operating capital to fund startups and small businesses.

LexShares’ staff of securities professionals review the lawsuits and only post suits that have “strong merit.” The target lawsuit for the company is one with $10 to $40 million in claim value. According to the press release, if the plaintiff wins the case, then the investors will recover an...

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Corporate Finance & Securities

You Can Now Use Crowdfunding in Washington State

As of this month, you can officially utilize crowdfunding to raise money in Washington for your startup. This new opportunity allows companies to advertise their securities offering and raise money from all investors. Traditional securities offerings restrict advertising and limit offerings to those who satisfy the income and net worth standards to qualify as an accredited investor. This new opportunity is different from platforms like Kickstarter, because with Kickstarter campaigns you can’t offer stock in exchange for the donations; instead the donations are usually straight gifts or made in exchange for a product or promotional item. Crowdfunding is not yet available on a national scale despite a section in the JOBS Act directing the SEC to enact crowdfunding rules (Congress...

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Corporate Finance & Securities

General Solicitation and Why 506(c) Matters to Your Startup

There has been a lot of buzz within the investment community about equity crowdfunding for both accredited investors under 506(c) and for non-accredited investors under Title III of the JOBs Act and recently enacted state law exemptions, including the crowdfunding bill recently passed (but not yet enacted) in Washington.

The main feature of both types of crowdfunding is the company’s ability to spread the news about the investment through the community, by advertisement and public broadcast.

Historically, or rather from the early 1930s until last year, you could not spread the news about such a “private placement” generally, as doing so by default made the offering “public,” triggering onerous securities regulations that can be incredibly expensive to comply with. Instead, investors learned...

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Corporate Finance & Securities

Congressional Committee Contemplating JOBS Act 2.0 to Make Crowdfunding More Workable

The United States House Financial Services Committee held hearings last week on bills that would rewrite legislation from the 2012 JOBS Act. At this preliminary stage the bills, which relate to crowdfunding, Reg A, and other securities laws, are only “discussion drafts of legislation.” For these bills to actually be finalized, they would have to get out of the committee, be passed by the House of Representatives, be passed by the Senate, and be signed into law by the President. Here’s a quick update on what those bills would do if enacted into law:

The Equity Crowdfunding Improvement Act of 2014

Rep. Patrick McHenry (R., N.C.) put together the draft of this bill, which would totally overhaul the crowdfunding portion of the...

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Business Startup

iVLG News Roundup Week 14 2014: IPO Market Heats Up in Early 2014; Imgur Raises Capital from Andreessen and Reddit; Crowdfunding and the Rule Making Debate

IPO Market Heats Up

The market for initial public offerings seems to be heating up announced the NY Times this week after Grubhub began selling stock publicly. Grubhub’s IPO price raised 40% in the first day of trading but has since waned.  The Grubhub deal, which followed the earlier merger of Grubhub and its one time rival Seamless, was among other notable IPOs this year. Overall, the first quarter of 2014 has been very strong for IPOs and has some talking of a repeat of the dot com bubble era.

Imgur Doesn’t Need Money But Takes $40 million Anyway

Image sharing site Imgur received $40 million in funding from VC firm Andreessen Horowitz despite only 2 months ago saying they didn’t need the...

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