Seattle, Washington (PRWEB) April 08, 2017
Crowdfund.co, a provider of software and investment banking services, announces a strategic move away from the seed and startup capital world to focus more heavily on post-revenue and preferably post profitable private companies in the middle market. The move is reflective of the overall strategy of the firm and aligns better with the capital advisory services that underpin the core practice of the company’s founders. In addition, the shift away from startups is due in part to the overall malaise seen in debt and equity crowdfunding.
The move away from startups was motivated by several internal factors at the firm. First, startups typically hold greater risk, especially for individual accredited investors. The firm desires to provide more stable cash flowing businesses to its investor-base. Second, growth equity is much more enticing than a hope and a prayer. “As a society, we have become enamored by startups, particularly those in high tech fields. They are sexy, but they are extremely risky and typical not as stable,” says Nate Nead, Principal of Deal Capital Partners and Crowdfund.co. “There are plenty of opportunities in the middle-market with boring, steady-state product and services businesses. Many steady, growing and profitable companies still require debt and equity capital infusions and equity crowdfunding and be a means of filling a much needed gap in the market,” Nead says. Finally, the firm’s founders also recognize that crowdfunding has not fully matured as rapidly as many had anticipated. This general market malaise has created some hesitancy on the part of both investors and entrepreneurs alike.
“If you look at the areas where equity crowdfunding is most succeeding, you will notice a couple of key features,” Carl Christensen, VP of Corporate Strategy says. “First, most of the deals are either fully-baked with a quality team. You cannot expect to fund by just posting to a crowdfunding website and praying,” he says. “Second, many of the best deals either have history, revenues, cashflow or they are collateralized by some asset (e.g. real estate or equipment). Many of the most sought-after deals in equity crowdfunding have included at least some of these characteristics.” The firm believes a refocus on a particular type of private equity or real estate transaction will make a stark difference in the opportunities it chooses to pitch to investors.
Effective immediately, the firm expects to be much more selective in the deals it chooses to service and the founders it intends to work with. “There are a lot of opportunities in the market and more deals seeking capital than there is capital to fund the deals,” says Nead. “The key is to be selective when choosing clients. If that means saying ‘no’ to an eventual unicorn deal, then that is how it is going to be.”
Crowdfund.co is a website wholly owned and operated by Deal Capital Partners, LLC which also runs InvestmentBank.com and a number of other high profile web properties. While the firm works directly with companies looking to raise capital through Regulation D and Regulation A+ offerings, the firm’s main service focus is on sell-side mergers and acquisitions for private companies across numerous industries in the middle market including software & technology, real estate, healthcare and business services.