SIFP Seattle 2012 has raised an investment pool of $100,000 to invest in for-profit track winners from amongst finalists selected at the October 18, 2012 event.
The investment will be made with friendly, but non-negotiable standardized investment terms (to be published soon). Our likely investment vehicle will be a convertible note, designed for early-stage social businesses who are expecting to raise $500,000 or more equity capital in the next 12 months. But we are also looking into alternatives that may suit other investment profiles better. If you have an alternative investment structure you would strongly prefer, please let us know.
The Investment Process
- Investors perform preliminary due diligence on all finalists in early October
- Winner(s) selected at October 18, 2012 event by investors
- Investors will perform final due diligence on winner(s) (target 2-3 weeks)
- Investment documents are signed promptly
- Money gets wired to investee bank account promptly
Investments FAQ
Q: How many and what size of investments will you make?
Investors will make one or two investments depending on the quality and potential of the finalists. The investment pool is currently at $100,000 and may go higher. The minimum investment from the pool will be $25,000. There may also be co-investment requests from investors outside of this pool.
Q: Can for-profit companies win grant prizes?
Yes. All finalists (non-profit and for-profit) will compete for at least $5,000 of grant prizes selected by the audience.
Q: If I don’t want to receive an equity investment in my company, should I still apply for the SIFP program?
You are welcome to apply as there are many additional benefits to the SIFP program than the for-profit investment prizes including training and mentoring to help you improve your strategic thinking, business plan and fundraising capacity as well as exposure to additional investors. And there may be options for alternative financing models (revene-backed loans for example). Please get in touch after you apply if this is an area you want to explore.
Q: Is there an opportunity for for-profit companies to talk with investors?
Yes. All semi-finalists will be provided a table at the October 18th public event where they will have an opportunity to interact with investors participating in the event. We are expecting to have a considerable number of early-stage angel investors at this event.
Q: How many quarter-finalists, semi-finalists, and finalists are there in the for-profit track?
There will be approximately 12 quarter-finalists, 8 semi-finalists and 4 finalists for the for-profit track.
Q: Which for-profit companies get to present at the October 18th public event?
The finalists get to present their “fast pitch” to the whole audience at the final public event on October 18th. The semi-finalists (including finalists) will be provided a table to present and interact with event participants (including many investors) at certain times during the event.
Q: Who are the people selecting the for-profit investment winners?
The investors are the deciders.
Q: If a winner does not pass investor due diligence or for some reasons declines the SIFP investment, what happens to the monies?
The investors will decide whether to provide the allocated funds either to another already recognized winner (assuming there is one) or to a runner-up business.
Q: Why are investment terms not negotiable?
Because we want to keep the investment transaction costs low for both the investors and the company. We have entrepreneur-friendly, standardized investment terms (to be published soon.)
Q: How did you come up with these investment terms?
We have worked with experienced angel investors, social entrepreneurs and startup attorneys in order to create a set of terms which are fair to both the investors and the entrepreneurs. The goal is to provide highly flexible capital to the company without having to go through the complexity and cost of a valuation and other investment terms and associated higher legal costs for closing the investment transaction.
Q: Are the investment terms negotiable in any way?
No.
Q: Are investors requiring a board seat?
No.
Q: How involved do SIFP investors expect to be with investee companies?
There is no specific commitment from investors to be involved in investee companies although, like many angel investors, the investors will be eager for the success of the company.
