Entrepreneurs face many obstacles when pursuing their dreams. Finding the right kind of financing can be a big hurdle. We work hand-in-hand with small businesses to optimize their financing structure and create their own investor communities.
NextSeed is a marketplace that lists only the businesses that meet its objective standards as public investment opportunities. Over 90% of companies have been successfully funded on NextSeed. Since we don’t accept every company that applies on NextSeed, we have built an engaged investor base that actively supports small businesses.
NextSeed works with brick-and-mortar businesses around the U.S. looking to raise $50,000–$1,070,000, you can use debt financing and raise it from the general public under Regulation Crowdfunding. If you’re looking to raise over $1,000,000, you can use debt financing or sell equity in your company to accredited investors under Regulation D.
With debt financing, businesses should expect to make monthly payments to investors and start generating revenues after opening to sustain the amount of debt financing they are requesting. This means that debt financing may not be the best fit for businesses that need a long product development time, that need to reinvest their earnings into their product, or that expect only a small revenue stream for a few years.
For these types of businesses, preferred equity financing may be a more suitable option. With the sale of preferred equity, businesses are selling part of their company to investors. Generally, preferred equity stockholders do not have voting rights and expect distributions from the company.
Consumer-facing businesses may benefit the most from having local investors. This is why many NextSeed issuers are in the food and beverage, coworking, hospitality, health and fitness industries, although this list is not exclusive. We currently do not list companies that only service other businesses (B2B companies).