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Looking to raise capital for your small business or startup? Crowdfunding has become an increasingly popular option in recent years, and one platform that's making waves in this space is NextSeed. What sets them apart from its competitors is its focus on Regulation Crowdfunding (Reg CF), a process that allows small businesses to raise funds from investors while complying with SEC regulations. Through their platform, you can finance gold startup companies and expose yourself to the precious metals industry.
If you're an entrepreneur or investor looking for a reliable and user-friendly crowdfunding platform, you won't want to miss our in-depth review of NextSeed. We'll take a closer look at its history, unique features, and how it can help you achieve your funding goals. Whether you're looking to raise capital or putting your money into exciting new businesses, NextSeed has something to offer.
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History of NextSeed
After the Regulation of Crowdfunding under the JOBS Act was passed in 2015, NextSeed was introduced in Texas in 2016. With certain restrictions and regulations, the act intended to make it simpler for small businesses to raise capital by allowing them to publicly solicit funding from non-accredited investors. However, this act also requires the use of a broker-dealer or funding portal to raise funds instead of doing it themselves. This is where NextSeed comes in.
The company’s co-founders, Youngro Lee, and Abe Chu saw an opportunity to use this new regulatory framework to create a platform that would make investing in small businesses more accessible and straightforward. They were both seasoned entrepreneurs who had firsthand knowledge of the difficulties small businesses encountered when attempting to raise capital through conventional channels.
Ever since the company was founded, it has grown steadily and has helped fund a range of small businesses across numerous industries. Debt-based crowdfunding was added as part of the platform's expansion in 2018 so that businesses could raise capital through loans rather than equity.
It is also worth noting that it garnered media attention when it became the first crowdfunding platform to receive regulatory approval to start a secondary market for Reg CF investments in 2020. This development provided investors with more liquidity and flexibility as they could now buy and sell shares in the companies they had invested in through NextSeed.
Their current headquarters are in Houston, Texas, and they remain a top Reg CF crowdfunding platform. Over 120 small businesses have received funding from the platform, which has also received over $25 million from over 16,000 financers. NextSeed is positioned to grow and have a positive influence on the crowdfunding industry because of its dedication to assisting both investors and entrepreneurs.
Features of NextSeed
NextSeed's platform is designed to make it easier for private individuals to trust in the potential of small businesses. Here are some of the platform's key features:
Benefits of NextSeed for Small Businesses
Entrepreneurs can benefit from the following advantages since Nextseed was not created just for investors.
Ultimately, NextSeed is a platform that appeals to both investors and aspiring business owners because of its features and advantages.
Drawbacks of Working With NextSeed
Not all companies are perfect. Similarly, NextSeed has some disadvantages you should consider when working with them.
Investment Types Offered By NextSeed
The first kind of investment opportunity offered by NextSeed is equity crowdfunding. This enables you to purchase a small ownership stake in a company, much like you would when purchasing shares in a publicly traded company. If your chosen business succeeds, the value of the shares may rise, giving you a return or profit on the money you invested in them. However, this is not the case every time. Some or all of your money will possibly be lost if the business does not succeed.
Debt-based crowdfunding, on the other hand, involves using your money for NextSeed to offer loans that businesses can avail of. You will then receive regular interest payments and are repaid the principal at the end of the loan term. This type is less risky than equity crowdfunding since you are not relying on the success of the business to earn a return. However, profits generated this way may be lower so you have to manage your expectations.
If you are unsure of what to pick, the website provides detailed information about each type, including the potential returns and risks involved, to help clients make informed decisions. Make sure you take into consideration your goals, risk appetite, and tolerance before deciding on which type of investment to go with.
How to Work with NextSeed
NextSeed has different processes for transacting with them depending on whether you are a client and want to grow your money or an entrepreneur looking for ways to gain more capital.
Should You Invest with NextSeed
We can't deny the fact that NextSeed provides a number of benefits, including a wide range of companies to invest in, a low initial investment requirement, and relatively low fees in comparison to other crowdfunding websites. In other words, they strive to offer quality service to make their clients and aspiring business owners successful. However, NextSeed is a mere platform that offers opportunities for you to trust small businesses and companies. They do not offer any advice such as what company to put your money in. Thus, it is your responsibility to conduct thorough research and carefully evaluate all available options before deciding to work with them.
If you are willing to take on a significant level of risk and are interested in investing in small enterprises and emerging companies, then this platform may be suitable for you. It is because you are trusting in these businesses that have the potential to succeed but this is not guaranteed as these have yet to establish their reputation. They do not have a proven track record, which can be very risky as you might even lose all the money you have lent.
Aside from this, the company is also not accredited by Better Business Bureau since it is not well-known and is a relatively new company. Although, the Securities and Exchange Commission has no record of any customer complaints about NextSeed, reviews on the company are scarce, with the most recent being in 2016. These reviews were mostly negative because of the risk of crowdsourcing.
It's important to remember that until you actually make an investment, there is no risk. The official website states that until the minimum financing target is attained, any money provided to a business on the platform is held in escrow. Until then, no money will be invested in the company of your choice. You will get a refund of your money in your NextSeed account if the business fails to reach the minimum target. This holds true whether the goal is to raise $50,000 or $1,000,000 for the business.
In summary, NextSeed is a risky choice to trust your money with. There are other financial options that are a better choice than supporting crowdfunding. You can enjoy the expansive benefits of a gold IRA or take advantage of the stability and value of precious metals. At the end of the day, you should instead consider your goals and risk tolerance.
Conclusion
As a powerful platform for raising money, NextSeed strives to provide quality services to entrepreneurs and financiers alike. In addition to helping small businesses acquire capital, the company allows clients access to several opportunities to grow their money. With them, financing start-ups is straightforward and approachable owing to its low minimum initial investment, low fees and charges, and useful investor dashboard.
Additionally, it ensures that clients are knowledgeable about selecting the companies to fund due to their wealth of educational resources and satisfying customer service. It is worth noting that they give entrepreneurs a chance to find sources of capital, promotional exposure, and aid during the fundraising procedure, which are a great help, especially if they are still starting out.
However, it is evident that investing in NextSeed may be a risky choice due to the potential for small businesses and emerging companies to not have a proven track record. Additionally, the lack of reviews on the company and its non-accreditation by the Better Business Bureau may add to the risk.
Therefore, it may be a better choice to consider other options that offer greater stability and value, such as putting money into established companies or precious metals. For example, a gold IRA can provide expansive benefits as gold is considered a safe haven asset that tends to hold its value during economic downturns.
Although we think that NextSeed Review is a solid company for crowdfunding, you should directly work with gold companies if you want to make the most out of investing in precious metals.
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