SIFP Seattle 2013 has an investment pool of at least $150,000 to invest in for-profit track winners from amongst finalists selected at the November 13, 2013 event.
The investment will be made with friendly, but non-negotiable standardized investment terms designed for early-stage social impact businesses.
This year, we have decided to offer two different potential investment structures in order to be able to invest in a wider range of businesses. We are choosing to be very transparent with investment terms by publishing term sheets and (soon) full investment documents. Investors will be using these documents "as is" in order to reduce costs and time negotiating investment terms. Please review these documents to ensure that these are workable for your business.
- Convertible Note. This is designed for businesses which expect to raise $500,000 or more equity capital within 12 months.
View SIFP 2012 Convertible Note Term Sheet Template >
View SIFP 2012 Convertible Note Investment Document >
- Revenue Loan. This is designed for businesses which have significant revenue growth potential in the next 3-5 years.
View SIFP 2012 Revenue Loan Term Sheet Template >
View SIFP 2012 Revenue Loan Investment Document >
If you any questions about these investment documents, please let us know.
The Investment Process
- Investors perform preliminary due diligence on all finalists in early October and decide which investment vehicle is appropriate for each finalist
- Winner(s) selected at November 13, 2013 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
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 $150,000 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: What is a revenue loan?
A revenue loan is a business loan which is paid back as a percentage of your revenue making it a good option for companies which can boost revenue substantially through use of the loan capital. Here is a good overview of revenue loan concept.
Q: If I don’t want to receive an investment in my company, should I still continue in the SIFP program?
Please first see our broader set of investment terms above for 2013. If neither of these are acceptable, then you are still welcome to continue, 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. However, we will request that each for-profit participant indicate their level of comfort with the two investment models we offer as of the semifinal competition.
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. We will also have some networking opportunities around the September 6 quarterfinal compeition for you to meet some of the SIFP investors.
Q: How many quarter-finalists, semi-finalists, and finalists are there in the for-profit track?
There are 20 quarter-finalists and will probably be 10 semi-finalists and 5 finalists for the for-profit track, but final numbers may vary depending on performance of the teams.
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. The judges in quarterfinals, semifinals, and finals will also provide valuable input to the investors on their views of social impact of for-profit participants.
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 -- see above links.
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?
Not other than in the very specific areas indicated in the term sheet. The negotiation process will be very short and simple.
Q: Are investors requiring a board seat?
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.