Investor Education Center

Welcome! The world of startup investing is exciting and dynamic, and like other high-risk investments, it's important to learn as much as possible before you get started. We suggest the following:

• Review the Lift & Launch Website
• Read our Frequently Asked Questions
• Review our Directory of Company Profiles

If you want to dig deeper, we recommend reading through information from FINRA, SIPC, and the SEC. Once you feel comfortable, click on the “Invest” button to get started.

Click the button in the top right corner that says “Sign up” or "Invest" to create your account.

We love startups for their innovation, vision, and unflinching drive to succeed. For many people, entrepreneurship is the intersecting peak of both creativity and productivity. If all goes well with the venture, we are able to see the founders fulfill their dreams and make an impact on the community.

It is important to know that crowdfunding investments can be very risky, and may result in a complete loss of your investment. Everyone has their own reasons for investing in startups and we encourage you to find your own 'true north.' We strongly urge that the underlying motive for your startup investments go well beyond monetary goals.

Crowdfunding is a financing method in which money is raised through soliciting small individual investments or contributions from a large number of people. Unlike donation-based crowdfunding (like Kickstarter), equity crowdfunding allows you to own a piece of the company.

Lift & Launch lets investors own a small stake in a business (equity), while Kickstarter only allows investors to purchase products or donate money.

Yes. Under rules adopted by the SEC in 2015 (Regulation Crowdfunding), the general public now has the opportunity to participate in the early capital raising activities of startup and early-stage businesses. This regulation allows companies to offer and sell securities to the investing public.

In essence, we wanted to level the playing field for startups and investors. We set out to create a marketplace where these two entities can come together for a common cause.

Lift & Launch has established itself as a premier option for startup crowdfunding:

• Selection process: We put substantial effort into vetting companies. Our team of advisors only approve the best and most promising businesses.
• Accountability: We use the latest technology to improve efficiency and accountability in the Crowdfunding Space.
• Minimum Raise: Our minimum fundraising limit is significantly higher than other platforms, ensuring companies have enough capital to make substantial leaps forward.
• Startup Services: Each startup is paired with an advisor and can connect with industry-appropriate attorneys, accountants, and marketing consultants.

Most investments can be categorized as either debt investments or equity investments. In an equity investment, you buy an asset and your profit is related to the performance of that asset. If you buy shares in a business, your profit is based upon the net revenue of that business. Equity investments are very high risk as businesses can be volatile during periods of expansion and contraction, and the majority of startups and small businesses do not succeed for the long term. There is a high risk that you will lose your entire investment. You should always consider your risk tolerance, time horizon, and financial objectives before making equity investments and decisions that could affect your financial future.

In a debt investment, you loan money to a person, a business, or a government institution. With a debt investment, your profit is not directly related to the performance of the borrower (in this situation, the business). If you loan $1000 to a startup business and they become highly successful, you will only be repaid for your initial investment plus interest, and you will not otherwise benefit from the company's financial success.

There is always a risk with debt investments that the borrower will be unable to pay back the debt. If the borrower doesn't have the money to pay their lenders or if they file bankruptcy to legally avoid paying their lenders, you could be faced with a complete loss of your investment.

Convertible Securities

A convertible security is an investment that can be changed into another form under its terms. The most common convertible securities are convertible bonds or convertible preferred stock, which can be changed into equity or common stock.

Equities

Equity securities (e.g., common stock) represent an ownership interest of a company by shareholders. Unlike holders of debt securities (e.g., bonds) who generally receive only interest and the repayment of the principal, holders of equity securities are able to profit from capital gains.

The main difference between a primary investment offering and a secondary investment offering is how the shares (stocks) are acquired. In a primary investment offering, investors are purchasing shares (stocks) directly from the issuer. In a secondary investment offering, investors are purchasing shares (stocks) from sources other than the issuer (employees, former employees, or investors).

You are an accredited investor if you meet one or more of the following criteria:

• Any natural person whose individual net worth, or joint net worth with that person's spouse, exceeds $1,000,000 (excluding primary residence).
• Any natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with that person's spouse in excess of $300,000 in each of those years.
• Any bank, savings and loan association, or other institution acting in its individual or fiduciary capacity.
• Any broker or dealer registered pursuant to section 15 of the Securities Exchange Act of 1934.
• Any insurance company as defined in section 2(a)(13) of the Act.
• Any investment company registered under the Investment Company Act of 1940 or a business development company.
• Any Small Business Investment Company licensed by the U.S. SBA.
• Any plan established and maintained by a state, for the benefit of its employees, if such plan has total assets in excess of $5,000,000.
• Any employee benefit plan within the meaning of ERISA if the investment decision is made by a plan fiduciary, or if the plan has total assets in excess of $5,000,000.
• Any private business development company.
• Any organization described in section 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000.
• Any director, executive officer, or general partner of the issuer of the securities being offered or sold.
• Any trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person.
• Any entity in which all of the equity owners are accredited investors.

We have found that working collaboratively with a group of prospective investors is the best approach. As a team, you are more likely to dig deep and discover underlying issues with a startup. Having said that, you are still responsible for conducting your own due diligence, separate from the group. Investors should ask detailed questions during the fundraising process. If the founder gives answers that are not convincing, then you should not invest!

We encourage you to develop a unique set of questions. Here is a short list to get started:

• How do you acquire customers? How much does it cost?
• What are your costs and plans?
• Does management have experience and expertise adequate for the current stage?
• Do the founders have a track record of success?
• Is this true market research? Is it presented properly?
• Who are your competitors? Why is your company unique?
• What are your projected cash flows and 5-year projected income?
• What is the current status of a company’s debt?
• Is there revenue sharing?
• Who do you owe money to?
• Is there any cash in the bank? Cash reserves?
• Are there regulatory issues? Litigation or disputes?
• What is the IP? Patents? Trademarks?
• Aside from management, who is on the Board?
• What are the salaries? Are projected expenses reasonable?
• Are the goals and milestones attainable?

Investing in startups is VERY risky. Educate yourself on the process and know the risks before you get started. Only invest what you can afford to lose. Do not allocate more than a few percent of your investment portfolio to startup investing.

The following is a non-exhaustive list of general risks:

• Risk of Loss: You may not receive part, or all, of the amount invested.
• Risk of Loss: You may not receive part, or all, of the amount invested.
• Liquidity Risk: Lack of an active secondary market. You will not be able to sell Title III securities for the one-year resale restriction period.
• Market risk: Losses due to factors that affect the overall performance of the financial markets.
• Performance Risk: Past performance is not indicative of future results. Loss of principal is possible.
• Dilution Risk: The company may issue additional equity securities in the future, lowering your percentage of ownership.
• Inflation Risk: Purchasing power of the investment asset does not keep pace with currency purchasing power.
• Interest rate risk: Risk arising for bond owners from fluctuating interest rates.
• Call Risk: Debt securities may contain a “call” provision, giving the issuer the right to retire the debt early.
• Credit Risk / Default Risk: Whether the Issuer will continue to be able to pay its debt.
• Real Estate Business Risks: Risks associated with real estate development, management, and the market.

Diversifying your investments will help mitigate risk and avoid complete loss. We suggest focusing on areas where you have an expertise, and we recommend investing in startups where you are a passionate user of their products. Even professional investors have a hard time predicting exactly how startups will earn money in the future. Investing in what you know and find personally valuable is the signature of a good investment.

When you make an equity investment on our platform, you have to be willing to risk every dollar you invest, or possibly wait at least 5+ years for a return. If you cannot do either of those, then you should not be making equity investments. It is best to view an equity investment as a highly speculative, longer term proposition that could be successful, or a total loss.

Compared to equity investments, loans can be slightly less risky but also have less of an upside. You should still assume that a loan will not be paid back. Never invest more than you can afford to lose. Otherwise, our investment opportunities are not appropriate for you.

Making an assortment of small investments each year, rather than one large one, is our best advice. If your budget allocates $5000 per year in startup investments, it will be less risky to make ten $500 investments instead of a single $5000 one. However, though diversifying your investment can help manage risk, it cannot ensure a profit or protect against loss.

Probably not. You should assume that you cannot resale your investment to another investor. Plus, almost every equity security on our platform prohibits resale, as private companies carefully guard the number of shareholders on their “cap table”. Regulation Crowdfunding also specifically prohibits resale of securities for one year, except to the issuer, an accredited investor, a family member, or their trust.

Yes. An equity stake will almost certainly be diluted. From launch to IPO, successful startups host multiple series of financings. For each round of financing, the startup issues additional stock to the new investors. This is totally normal and healthy, as long as the value of the company increases with each round of funding. However, "down rounds" can cause dilution to happen much more rapidly.

Probably not. You should assume your investment does not include voting rights unless otherwise specified. It is rare for an investment on our platform to offer voting rights directly to smaller investors. Founders fear this can scare off venture capitalists who invest in later rounds, due to the hassle of collecting thousands of signatures.

No. Lift & Launch is an informational platform that merely connects investors with startup founders. We never recommend that you invest money into a particular startup. You should conduct your own due diligence to decide which startups, if any, are worthy of your investment.

Companies on Lift & Launch offer Equity or Convertible Notes.

We accept investments as low as $50 per round of funding. We anticipate that our minimum allowable investment will increase as our membership continues to climb.

For Regulation Crowdfunding offerings, your annual investment limit is calculated based on the net worth and income you provided when you opened your account.

Non-Accredited Investor Investments:

• The greater of $2,500, or 5 percent of the greater of the investor’s annual income or net worth, if either the investor’s annual income or net worth is less than $124,000; or
• Ten percent of the greater of the investor’s annual income or net worth, not to exceed an amount sold of $124,000, if both the investor’s annual income and net worth are equal to or more than $124,000.

Accredited Investor Investments: The Funding Portal will not limit the Accredited Investor’s investment commitment unless otherwise restricted under the respective Offering Documents.

Limits are set by the government and by the issuer. Therefore, you cannot invest a greater amount than the maximum listed for a specific opportunity.

Yes, unless the law of your country prevents you from investing.

Look for the big green button! If a company is fundraising with Lift & Launch and you are eligible to invest, there will be a big green “Invest” button near the top of the company profile. Indicate how much you would like to invest, choose your payment method, and sign the contract. We currently take the following methods of payment: bank accounts, wire transfers/ACH, checks, credit card.

Once you apply to invest, you will hear back within 24-48 hours. No money will leave your bank account until your application has been accepted and both parties have signed the contract. If you are not outright accepted at your desired investment amount, it is common for you to be accepted contingent upon lowering the size of your investment or, alternatively, you may be rejected.

When startups receive more money than they need, investors are often waitlisted. This is often referred to as being 'oversubscribed.' Instead of reducing the size of everyone's investment, founders may choose which investors to accept and may prioritize those who can help their company the most. Decrease your chances of being waitlisted by applying to invest early, connecting your social networks, and filling out your profile completely.

Congratulations! You have 7 days to ensure payment is sent to an escrow account. Your funds will be held in an escrow account until the fundraising target has been met and the round closes. Your funds will then be transferred to the startup and your investment will be fully confirmed and executed. If this time expires and you are past the 7 day window, your investment application will be automatically canceled.

Everything is handled electronically. After signing contracts on Lift & Launch, you will be emailed a PDF of the executed documents signed by both parties. A copy of your contract is also available via your dashboard on the Lift & Launch website.

Yes. Your investment is placed in an escrow account hosted at Prime Trust. Funds are transferred to the startup only after the fundraising target has been met and the round is closed.

When more money is committed than a startup can accept, it is considered 'oversubscribed.' Priority for who becomes an investor is generally placed in the order that the funds have been received into the escrow account. It is also common for startups may also prioritize investors they feel can help their company the most. You can increase your chances of becoming an investor by completing your full profile, connecting your social networks, and investing early.

After an investment is successfully executed, you will receive an email with your electronic contract signed by both parties.

We charge a “Success Fee” – a percentage of the capital raised on our platform of up to 7% when an issuer reaches their funding goal. This may be in the form of cash or equity or a combination of both. We may be providing premium services for issuers such as consulting services, due diligence materials and other support features.

You should plan on holding your investment until the company has an exit. There is currently no market for selling your investment on the secondary market. If there is an emergency and you need to liquidate your investment, notify us immediately and we will do our best to find an available buyer, but we can’t guarantee that you will be able to exit.

We ask all companies on our platform to provide us with updates, although it is not a requirement for their participation. If a company chooses to provide us with an update, we will pass it along to our investors. If a company does not provide us with an update, we do not have information rights and are thus unable to provide investors with an update. Going forward, we plan to have an emailed monthly newsletter and an online resource that will house all of the updates we receive from participating companies.

Yes, you can change your mind for any reason up to the 48 hour period prior to the issuer’s offering deadline; or, the 48 hour deadline listed in the issuers notice of early close if they’ve met their minimum target. This can take place even if you have signed the investment contract. However, once the funds have been released from escrow to the issuer, the investment is final. To request a cancellation of investment and return of funds, please send a request via email. We will process your cancellation and funds will be returned within 5 – 7 business days to the original funding method.

As previously stated, you can cancel your investment commitment anytime up to 48 hours prior to the issuer’s offering deadline or the 48 hour period listed on a notice of close when an issuer has met their minimum target. As long as the funds are still in escrow, and the fundraising round has not been closed, you may cancel your investment.

Issuers (aka – “Startup founders”) have the right to cancel the offering early, and at that point, have the obligation to cancel investments and return funds to investors.

Every round of fundraising is open at least 21 days, and a fundraising round will close at their offering deadline. A specific round may close earlier if their funding target has been met. In this case, you will receive a 5 day warning notice before the close date, which will be sent via email and/or push notification.

If the fundraising fails, you will be notified via email and receive a full refund of your investment.

It depends on the method by which you’ve paid. We’ll initiate a refund as fast as possible but it can take up to 14 days. Refunds will be issued via the method you used to make the payment.

Communication will be minimal. Startup founders are busy running their companies and won’t have time to talk to hundreds of investors. We encourage companies to update investors regularly, but there is no legal obligation to do so. Legally, most companies are required to issue an annual report.

Yes! In fact, most of the fun from startup investing comes from how you can help. You can offer product feedback, introduce founders to relevant people in your network, or evangelize product launches. Founders will often publish specific requests for help to their feed.

No. You will not have access to their email addresses, phone numbers, or any other contact information. All communication with founders is handled via the Lift & Launch platform.

Investors should receive an annual report once a year with financial statements and business overview. Legally, companies are required to send this out no later than 3 months after the end of their fiscal year. There are some exceptions to the rule. Companies are not obligated to file annual reports if they file for an IPO, are acquired by a purchaser, repurchase your investment, file for bankruptcy, have fewer than 300 shareholders after 1 year, or have less than $10 million in assets after 3 years. Some startups who can easily raise venture capital funds may also choose not to publish an annual report, as the only penalty is they may not use Regulation Crowdfunding again until they do so. Note that if company stops reporting, you may not have current financial information about the business, and could therefore be making uninformed investments.

Not necessarily. After fundraising, we provide each startup with continued access to our platform and post-campaign services, but there is no guarantee the startup will continue to work with Lift & Launch on their next campaign. They may decide to raise their next round on a different funding portal or they may have access to venture funds.

Valuation is not an exact science, yet it is critical in helping determine not only the potential of a business, but the risks, as well. There are a myriad of factors that may determine valuation other than the prospects of a company’s product or service. These may include management’s track record, the industry itself, and even the investment climate at the time. Lift & Launch will consider these, along with other relevant data to help provide both investors and businesses a level playing field in the valuation process.

Investments in young companies carry substantial risk. In some cases you may never see a return – you must be able to afford to lose your entire investment. Of course, there is always a possibility for outsized gains. After the one year general mandatory holding period, a secondary financial transaction may be required to realize a positive return. It is also possible that the Company may be acquired at a higher valuation. Investors must realize that it may take a number of years for a company to reach its full potential.