Raising a round with SeedBlink Equity
This page will walk you through everything you need to know before starting your new financing round on SeedBlink Equity.
Introduction
High level overview
SeedBlink Equity allows every founder to open up their own private financing round page and invite their list of investors to their own custom URL where they can easily commit and invest.
How it works?
The process is simple and very straight forward. You will be guided by our platform for most of the process and by your account manager for the rest. In a nutshell, the process looks like this.
Setup your round terms
Provide the needed documents for KYB & KYC
Sign the contract with the SeedBlink Nominee and activate your round page
Invite your investors to your active round and see their commitments roll in
Receive the money in your bank account after the round has been closed
Share updates and communications with your new investors.
Pricing
SeedBlink charges a success fee on the amount of money you successfully raise in your round. The success fee is 2.5% of the amount raised in your round.
Your investors will need to pay an yearly management fee of 0.5%
You will need to be on the starter plan to use the SAFE instrument or on the growth plan to use the CONVERTIBLE instrument
Getting started with your round
First, go to your "Raise Hub" menu in the left navigation and click the button once you're ready to begin the setup of your round.
Initially, you will be asked to choose between a "Nominee round" and a "Direct round"
Nominee vs Direct round
The Nominee Round and Direct Round differ primarily in how investors are managed. In a Nominee Round, all investors are grouped under a single entity, simplifying administration and governance for your company, both during the round and after the round. A Direct Round involves individual relationships with each investor, offering more direct control but potentially more complex management. Usually founders prefer direct rounds when raising from a smaller group with more substantial tickets.
| Feature | Nominee Round | Direct Round |
|---|---|---|
Cap table structure | All investors grouped under one nominee entity | Each investor appears as a separate entry |
Contractual arrangement | One contract between company and SeedBlink Nominee | Individual contracts with each investor |
Flow of money | From investor to Nominee. After round is closed, all the money raised is sent to your company. Minimum target amount available. | From each of your investors to company's bank account, manual confirmations required for each investor. |
Governance | Managed through a single nominee entity | Handled with individual investors |
Investor refusal | Manual process available | Automatic process available |
KYC and AML | Platform-managed with guided investor process | Platform-managed with guided investor process |
NDA on round page | Available on request | Available on request |
Investment instruments | SAFE / Convertible | SAFE / Convertible |
Governance Support | Comprehensive support through nominee structure | Support provided through SeedBlink Equity platform |
Minimum ticket | Available | Available |
Administrative Considerations | Centralized management via nominee | Individual investor management required |
Investor additional costs | Yearly management fee 0.5% | No additional costs |
Funding goals
Fill in the general details about your upcoming round. If you're not exactly sure yet about all the details, don't worry, you will be able to change this information later on.
Round stage:
Let your investors know what stage you're raising for by selecting one of the options in the dropdown
Amount you want to raise:
Input the total EUR amount you want to raise (ex. 100,000 EUR)
You can change this value later on, so don't fret if you don't know the exact number
The total amount you want to raise, will also dictate for how long your round will be live for.
If the total amount you want to raise has been reached, then investors will no longer be able to commit to your round.
Already committed amount:
This is the amount of money that has already been invested by your investors outside the SeedBlink platform. If you had no previous commitments made, simply write down the number 0 EUR.
If you already had previous commitments, write down the amount that has been committed. We will use this number to have an understanding of how much more money you need to raise (Total amount - Already committed amount)
The amount you want to raise will also dictate how ultimately you will be diluted. If you are not sure how you or your stakeholders will be affected by this, you can run a simulation to understand your dilution. To learn more about simulations, you can go here.
Target close date: This is an indicative date for when you would like to close the round. You can set this value as far in the future as you want, to make sure you raise your desired amount. The downside is that you will only be able to receive the money you raised, after the round is closed. The round will automatically close on the date you choose, disabling the option for investors to commit to your round after that date.
The ability to draw money while the round is active can be made available on request.
If you are not sure what date to log, choose a date 1 year in the future, since you will always be able to close your round whenever you want once it has been opened. And you can also choose to extend the round in case your funding goals take longer than expected.
Minimum target amount:
This is the minimum amount you are willing to accept before the round becomes active. There is a minimum requirement from the platform to have at least 10,000 EUR as your minimum, but you can have it as high as you want it. What this basically does is that once your investors have committed and signed commitments of above this amount, we will start the money collection process, from the investors to our Nominee (or to your bank account in case of a Direct round)
Investment instrument: SAFE vs Convertible Note
Currently the equity platform allows for only SAFE (post-money) and Convertible (post-money) contracts to be executed on the platform. If you want an Equity deal, your only option for the time is to reach out to our Investment managers, and they can walk you through the process outside the platform.
Choosing the type of investment instrument is a very important aspect, that affects how you and your current stakeholders will be diluted in the future, and we advise each of the founders to develop a better understanding in how these instruments work. For instance, the SAFE instrument doesn't come with any pay-back or interest associated in case of no liquidity event whereas the CONVERTIBLE instrument does.
For a better understanding of what a SAFE, or a CONVERTIBLE is, please visit this page.
If you are not sure about what to choose, we strongly suggest to reach out to one of our dedicated investment managers so they can hand-hold you in the process, and answer all your questions around the topic.
Heads-up, in order to open a SAFE round, you will ultimately need to be on our STARTER plan, whereas to open a CONVERTIBLE round you will need to be on the GROWTH plan. While we don't check the subscription requirements in this step, you will ultimately need to be on the required plans to actually launch your round page.
if you want to schedule a call with one of our investment managers, click here
After choosing your investment instrument, you will be required to define the terms of your round page.
Configuring the terms of your investment instrument
SAFE (post-money) instrument terms:
Valuation Cap (method 1)
This number represents the maximum company valuation at which the SAFE investment will convert to equity. This amount needs to be higher than the amount you're looking to raise in the round.
For example, if you valuation cap is 5,000,000 EUR, and the next equity round you will do will be at a valuation of 7,000,000 EUR then an investor who has put down a 100,000 EUR investment in your company through the SAFE will get shares that represent 100,000/5,000,000 ownership.
Discount (method 2)
The discount represents the discount your investors will benefit from when having their invested money converted to equity. The discount will be basically applied to the share price of the equity round that will trigger the conversion of your SAFE.
For example, if your discount is 20%, and the next equity round you do will have a Share price of 1.00 EUR, than the investors that have invested through the SAFE instrument will get each share at a price of just 0.80 EUR / share. So if an investor had put down 100,000 EUR investment, instead of getting 100,000 shares, he will actually be getting 125,000 Shares.
It is important to note that when converting the SAFE to equity, the investor will be converted at which of the 2 methods is better for them. Either the Valuation Cap method, either the Discount method.
Convertible (post-money) instruments terms:
Valuation Cap:
This number represents the maximum company valuation at which the CONVERTIBLE investment will convert to equity. This amount needs to be higher than the amount you're looking to raise in the round.
For example, if you valuation cap is 5,000,000 EUR, and the next equity round you will do will be at a valuation of 7,000,000 EUR then an investor who has put down a 100,000 EUR investment in your company through the CONVERTIBLE will get shares that represent 100,000/5,000,000 ownership.
Discount:
The discount represents the discount your investors will benefit from when having their investted money converted to equity. The discount will be basically applied to the share price of the equity round that will trigger the conversion of your CONVERTIBLE.
For example, if your discount is 20%, and the next equity round you do will have a Share price of 1.00 EUR, than the investors that have invested through the CONVERTIBLE instrument will get each share at a price of just 0.80 EUR / share. So if an investor had put down 100,000 EUR investment, instead of getting 100,000 shares, he will actually be getting 125,000 Shares.
Maturity Date:
This date represents the date at which the CONVERTIBLE contract must either be converted into shares, or the company must pay-back their investors together with the interest.
Interest:
This number represents the yearly interest that gets added to the Investors' initial principal amount.
For example, if the investor has an initial 100,000 EUR investment, and the interest is 2%, and if the ConvMiertible converts exactly after 2 years, that means the convertible amount that will automatically be converted into shares is now 104,040 EUR = 100,000 EUR + 2%(100,000 EUR) + 2%*(100,000 EUR + 2%(100,000))
It is important to note that when converting the CONVERTIBLE to equity, the investor will be converted at which of the 2 methods is better for them. Either the Valuation Cap method, either the Discount method.
Minimum investment ticket.
Here you can input the minimum amount you want each investor to invest.
For instance if you choose 2,500 EUR as your minimum ticket, that means any investor that wants to take part in your round will have to commit to an investment ticket of at least 2,500 EUR.
Pitch deck upload
This step should be pretty straight forward. You're asked to upload your pitch deck, or to select it from your documents section (if you previously uploaded it).
You will be able to add multiple other documents in the next steps, and even change your pitchdeck. Videos can also be used on your company profile.
After going through these initial steps, just click on "Finish" and your round will be created with the "Preparing" status.
Required tasks: KYC, KYB, payment details, profile & contract.
This is what your round dashboard will look like while in the preparing status:
Now, in order to get your round LIVE there are a few more items to check. These items will be listed on your round dashboard, under "YOUR TASKS" and you can go through each of them and check them as completed.
REQUIRED TASKS:
Verify your identity
Here you just need to upload your ID (passport, national ID card).
Verify your business
Here you need to upload your trade registry extract.
Each country has their own trade registry that can get you the required document.
Add payment details
You will need to add the bank account details where we should ultimately make the payment towards you.
You will need to fill in the following fields and provide a bank confirmation letter as well to confirm the fields.
Bank name
Bank SWIFT/BIC code
Bank account (IBAN)
Beneficiary name (this should be the name of your business)
Beneficiary address
Review contract options
Based on the previous investment instrument you have chosen, you can either view and select our default contract template (SAFE/CONVERTIBLE), or you can upload your own
Uploading your own contract, will also mean that we'll be reviewing this contract and we might come back with different amendments
Complete your company profile
We require all companies that want to open their round to have a company profile completed above 70%.
The information that you put in your company profile will be the information used to customize your round..
Under the documents section of your company profile, you can provide multiple documents that will be shared on your round page once it's live, such that investors can view those documents to aid them in their investment decisions.
We usually suggest to add the following documents, but the choice is ultimately yours:
Financial Forecast
Balance sheet
Risk mitigation documents
Once all your tasks are completed, you just need to click on "Submit" and then all the round details and associated documents will be sent to us, to check & review. If everything is OK, your round will be created. If there are any identified issues, concerns or questions, one of our team members will get back to you to resolve any encountered issue. You will typically hear back from us in 48-72 business hours.
Active round
Before setting your round live, and able to accept commitments, there will be only 2 more things that you need to do:
Sign an initial contract with SeedBlink. Your dedicated account manager will share with you an initial contract you need to sign with SeedBlink.
Activate the required subscription for your round.
If you've done all the steps from above...Congratulations! you now have your round active, and investors are able to invest. Your only mission now, is to make sure that all your investors receive the link. So just copy your custom round page URL, by clicking the "COPY LINK" button, and send it to your group of investors.
Once investors will start committing to your round, you will be able to see who committed, the amount they committed, when they did it, whether they signed the investment contract and whether they have ultimately sent the investment amount.
Initially, before hitting the minimum target amount you initially set up, your investors will only be able to COMMIT and SIGN THE INVESTMENT CONTRACT. After the sum of signed commitments is equal to or higher than the minimum target amount, the collection of the money will be initiated. And as soon as an investor will make the payment, their status will show up with "Payment confirmed" status.
For Nominee rounds, we'll automatically handle the payment confirmations, whereas for a Direct round you will be responsible to confirm the receival of money.
Closing the round
You can choose to close the round whenever you want by clicking on the 'Actions' dropdown from the right hand side of your round's dashboard and click on "Close round".
Your round will also be automatically closed, once your desired funding amount was met, or once the round close date has been reached.
Once the round has been closed, we'll wait 5-15 more days for investors to send the money. Once they do so, you'll need to sign the SAFE/CONVERTIBLE contract with our SeedBlink Nominee, before we send you the money raised in the round.
What happens next?
After the round was closed and the money reached your bank account, there will be a new stakeholder present on your cap table, and that is the SeedBlink Nominee. You will be required to send quarterly company updates to the SeedBlink Nominee, and the Nominee will share those updates with all the investors present in the Nominee.
FAQs
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