SproutUps is a SIC (Social Investing Community). The SIC industry began to emerge in 2014 for three reasons:
- Evolution of social media
- Passage of the Dodd Frank Act in US
- Passage of JOBS Act in the US
The model of a SIC is very disruptive especially to venture capitalists and angel groups because it provides the following:
- Capital for all of a startup’s pre-IPO rounds
- Liquidity for a startup’s investors
The goal of a SIC is to have hundreds of thousands of members building portfolios from investing small amounts into numerous startups and early stage companies. The mission of a SIC is to lead and educate its members about investing.
The key benefits for a startup being a member of a SIC:
- Less dilution and more control. Large investors can and will dictate onerous terms and conditions.
- Less risk. Probability is infinitesimal that shareholders investing small amounts will take legal action in the event of bankruptcy, etc.
- Shareholders obtained by online funding are:
- Advocates for the growing of crowd to invest in follow on offerings.
- Zealots which can and will promote a startup’s app or products and services.
- Participants in additional offerings.
Without the JOBS Act being signed into law by US President Obama the SIC model there would be no rationale for the SIC model. The three new securities laws that were implemented by the US Securities & Exchange Commission (SEC) are now being leveraged by the SICs to provide capital to startups and liquidity for their shareholders:
- Title II-Issuer can raise all of the capital that it needs by advertising. However, the capital can only be provided by accredited or high net worth investors.
- Title III- Issuer can raise up to $1,070,000 per annum from non-accredited investors or the public by listing its securities on a US government regulated and approved online funding platform. Shares purchased by investors in Title III offerings are freely sellable to any and all investors one YEAR after purchase.
- Title IV-Issuer can raise up to $50,000,000 per annum from non-accredited investors. Shares purchased by investors in Title III offerings are freely sellable to any and all investors one DAY after purchase.
SproutUps is a member of a network of SICs. The SICs in the network provide an issuer who becomes a member of one or more of the SICs with the ability to efficiently and quickly raise capital as needed and at increasingly higher valuations. Members of the network:
- Dynasty Wealth. Specializing in finding and funding startups which have 1,000X upside potential. A Dynasty Wealth member issuer must have a business model which is capable of reaching a valuation of $10 billion within 5 years after becoming a member.
- AppsFunder. Specializing in finding and funding apps. It is projected that more than 1.4 million new apps that are currently under development or will be under development will hit the app stores by 2020.
- Trophy Investing. Excels at identifying startups and early stage companies which have the potential to multiply in value within three to five years.
ortant to digital companies and especially for those who are developing the millions of new smart phone consumer applications that will hit the app stores by 2025. SproutUps provides a startup with the potential to have hundreds of thousands of shareholders who can be advocates and zealots for the startup’s products and services.
SproutUps intends to begin to provide capital to non US startups that are listed on non US government regulated platforms during 2018. SproutUps will adhere to the government regulations that are required by each country that allows and enables crowdfunding.
Recommended articles and videos.
- Dodd Frank: Boon for Large Caps, Bust for Micro-caps, December 12, 2017
- StartEngine’s New Secondary Market Extremely Disruptive to Capital Markets, November 17, 2017
- Crowdfunding Must Get Back to Its Roots, October 20, 2014
- Video: “The Social Investing revolution, the sequel to the Social Media revolution has begun.” (6 min 44 sec)
- Video: “Digital Economy Transformation creating potential 1,000 times ROI” (8 min 12 sec)
A startup can become more visible and move higher up on the food chain by having its friends and family to become members of SproutUps and the other SICs in the SIC network. Startups get credit by their contacts inserting the name of the startup in the “How did you hear about us” box on SproutUps’ membership subscription page. Membership to SproutUps is FREE.