In addition to non-profit grants, SVP Fast Pitch Seattle will invest at least $150,000 in early-stage social impact businesses.
In 2014, SVP Fast Pitch has at least $150,000 to invest in the winners from our for-profit track. The investments were 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 use 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.
1. Convertible Note. This is designed for businesses which expect to raise $500,000 or more equity capital within 12 months.
2. Revenue Loan. This is designed for businesses which have significant revenue growth potential in the next 3-5 years.
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 the Fast Pitch Finals on October 28, 2014 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 for 2013 was set at $150,000. 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 SVP Fast Pitch program?
Please first see our broader set of investment terms above for 2014. If neither of these is acceptable, then you are still welcome to continue, as there are many additional benefits to the SVP Fast Pitch 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 28th 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 18 quarterfinal competition for you to meet some of the SVP Fast Pitch investors.
Q: How many quarter-finalists, semi-finalists, and finalists are there in the for-profit track?
There are 20 quarterfinalists 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 SVP Fast Pitch Showdown?
The finalists get to present their pitch to the whole audience at the final public event on October 28th. 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 make their own decisions. 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 reason declines the SVP Fast Pitch 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?
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 SVP Fast Pitch 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.