Learn More About SeedAsia
What is SeedAsia?
SeedAsia is a web-based platform offering qualified investors the opportunity to explore and invest in a pre-screened group of early-stage Chinese and Southeast Asian technology companies.
Who are SeedAsia Members?
SeedAsia members come from a number of countries. Members include high net worth and angel investors, venture capitalists, accelerators, serial entrepreneurs and other classes of sophisticated investors.
How does SeedAsia work?
It is free to become a member and to view opportunities on the SeedAsia Website. To become a member, you (on your own behalf or on behalf of the qualified entity you represent) must complete a simple membership application. You’ll need to provide your contact information, choose a user name and password, and provide other relevant information about your overall financial status to determine whether you are a qualified investor under the securities laws where you live. Once qualified, you’ll be able to browse pre-screened startup company profiles and related information. When you decide you’re ready to invest you’ll need to provide additional information, enter into binding legal agreements with the special purpose investment vehicle managed by an affiliate of SeedAsia (the “SPV”) and provide for the transfer of monies to the SPV.
Who is eligible to invest on the SeedAsia platform?
Membership in SeedAsia is open to individuals and entities that qualify as “accredited investors”, “professional investors” and similarly qualified persons in the jurisdictions in which they reside. Members are asked to verify their qualification upon signup, and again upon making each investment. Nevertheless, SeedAsia has the sole discretion to approve or reject any membership and/or investment application, for any reason or no reason.
Why should I invest in startups through the SeedAsia platform?
SeedAsia provides access to a pre-screened group of early-stage Asian technology companies. The SeedAsia team has deep and broad access to startup companies through its relationships with Asian incubators, venture capitalists and entrepreneurs.
What is the minimum investment commitment?
The minimum investment commitment will vary from investment to investment, however the majority of investments are expected to have a minimum commitment of US$2,000 per investment per member.
What kinds of companies are presented on SeedAsia’s Website?
SeedAsia presents pre-screened Chinese and Southeast Asian startup technology companies. The typical startup company presented by SeedAsia should have demonstrated traction and in many cases will have completed a program with a reputable Asia-based incubator such as DaD Asia, IdeaSpace, or others.
How does SeedAsia decide which startups will make it onto the Website?
The Screening Committee determines whether a startup is listed on the platform for funding. Members of SeedAsia’s Screening Committee are experienced mentors, technologists, venture capitalists, and entrepreneurs. The Screening Committee typically asks questions such as: What is the size of the startup’s addressable market? Has the startup company demonstrated traction through initial sales or customer acquisition? Is the founding team strong and cohesive? Is it highly visible, with a vibrant social media presence? The Screening Committee believes that the startup company should be visible to you through social media, so that you can get to know the company and the founders.
What information is provided about the company on the Website?
Each company profile will typically describe how the referral was made to SeedAsia, and will include information provided by the startup company describing whether the startup company received earlier rounds of financing, profiles of the startup team and an organizational chart, a pitch video, a question and answer forum, detailed information about the startup company’s products and, to the extent available, finances, and information from the startup company’s management team describing the type and frequency of information it will provide about the its progress.
What is the risk profile of an investment through SeedAsia?
Investments in early-stage companies are subject to significant risks that could result in a reduction of your investment value or a total loss of your investment. Investors should carefully review their personal financial situation, the risks further described in the offering documents and consult with their financial and legal advisors prior to making an investment through the Website.
Why do startup companies raise funds through SeedAsia?
Startup companies are able to use the SeedAsia platform to raise funds in an efficient, flexible, and timely way. Using SeedAsia, startup companies have access to a broad, transparent, and engaged investor base.
What do I own when I invest through SeedAsia?
You will own shares in a special purpose investment vehicle (the “SPV”) managed by an affiliate of SeedAsia Ltd. Your share holdings will relate on a 1:1 basis to the SPV’s investment in the security sold by the startup company (i.e., convertible notes, Series A shares, etc.). Each SPV will invest in one startup company on behalf of all of the SeedAsia investors having an interest in that startup company. Each startup company will have its own dedicated SPV established to invest in it. It is important to note that you will not hold a direct interest in the startup company itself. In addition, you will grant the SeedAsia-affiliated managers the right to take all action on behalf of the SPV, including any rights to serve on the board of directors of the underlying start-up company, and to vote the shares of the underlying start-up company.
What is a convertible note?
A convertible note is usually a short-term unsecured debt obligation that is convertible into equity. In early-stage startup financing, the debt typically automatically converts into shares of preferred stock upon the closing of a Series A round of financing. In other words, investors loan money to a startup as its first round of funding; and then rather than get their money back with interest, the investors receive shares of preferred stock as part of the startup’s initial preferred stock financing, based on the terms of the note. By issuing a note rather than shares, or equity, setting a valuation for the company can be postponed until later in the life of the startup company, for example when it is further along in its acquisition of customers and revenue. When the startup company goes out to raise its next round of financing, it may be able to command a higher valuation from investors having had this development time. Note that if the startup company is not able to complete a Series A financing and does not otherwise have the funds to repay the convertible loan, it is possible that the startup company will default on its obligations to repay the convertible note, in which case you may end up losing the entire amount of your investment.
How does the investment process work?
After you have reviewed the profile information on a startup company and have made a decision to invest, you will be able to participate an investment in a SeedAsia SPV established to make the investment in the startup company. SeedAsia will then send you the formal offering memorandum and investor questionnaire, as well as wire transfer instructions. Once you have read and agreed to terms of the SPV investment agreements, completed the questionnaire, electronically signed them and sent legal identification to SeedAsia, you will receive wire transfer instructions and will be required to transfer funds. At the closing, the SPV will then invest in the startup company on behalf of the group of SeedAsia investors.
What happens if an investment in a startup company is postponed or terminated?
If SeedAsia members have not demonstrated enough interest in any investment opportunity within a given period, SeedAsia may, or may be required to, postpone or terminate the fundraising process for that startup company. If an investor has wired to Silicon Valley Bank for a postponed or terminated investment, the investor’s cash will be returned as soon as practicable without interest, adjustment or setoff.
What fees does SeedAsia charge to investors?
For each investment that you make, the manager of the SPV in which you invest charges an initial administration fee of $250 USD to cover the costs of organization, operation and management of the SPV during the term of its existence. The manager will also take a 5% distribution fee based on the proceeds received by the SPV upon any liquidity event, as will be described more fully in the definitive agreements governing your investment. The manager of the SPV and the SPV itself are both affiliates of SeedAsia, the owner and operator of the SeedAsia Website.
Can I sell my shares in the SPV?
Shares of the SPV are illiquid securities and not tradeable on any market. They may only be transferred with the consent of the directors of the SPV and pursuant to laws governing the private sale of securities. You should plan to hold any shares you purchase as a long term investment.
Do startup companies pay fees to SeedAsia?
SeedAsia charges no fees to startups raising money through its platform.
Can I share or repost information about companies or SPVs from the SeedAsia Website?
No. You are required to keep information about startup companies and investment opportunities available on the SeedAsia Website strictly and completely confidential. Please read the Terms and Conditions governing your use of this Website. SeedAsia vigorously enforces its confidentiality policy to comply with securities laws, and out of respect to the requests of its startup companies.
When can I expect a return on my investment?
After a startup company has a liquidity event, such as an initial public offering of its shares or when it is acquired, the SPV in which you own an interest (and which in turn owns the interest in the startup company) will make a distribution of the net proceeds to you. This distribution will be subject to a distribution fee, as described more fully in the investment agreements for each particular SPV investment. Liquidity events for startups range widely—from two to ten or more years. You should be aware that many investments in startup companies never generate liquidity or a return on investment and may result in an entire loss of invested capital.
After I invest, how do I keep current on the status of the startup?
Each startup company’s profile will set out the type and frequency of information its management agrees to provide. It will be the startup company’s obligation to comply with such information reporting requirements.
Investors and startup teams can meet each other at SeedAsia events. Visit the SeedAsia blog at www.seedasia.tumblr.com for upcoming events.