FAQs SectionsGetting Started Investors Entrepreneurs About Seismic Educational Questions Directional Questions
1) Do I have to be accredited to invest in Seismic? / Is Seismic open to non-accredited investors?
With Seismic, all investors – accredited, non-accredited, institutional and pension funds – can participate in investing in up-and-coming companies of the future before they become household names.
Seismic commenced its SEC-qualified Regulation A+ offering late in the 3rd quarter of 2021, to raise $49 million. The offering is for all investors, accredited and non-accredited. We have a second offering, to raise an additional $50m, open to accredited investors only. This offering is registered with the SEC under Regulation D.
2) What is the minimum to invest?
There is a low minimum investment of just $1,000—unprecedented in this asset class; the goal for our initial capital raise will be to invest it across in a portfolio of 10-15 companies. [Our Reg D offering minimum is $50,000, with special incentives for larger investors]. When you invest in Seismic, you are investing in the portfolio – not an individual company within the portfolio. All investors have a piece of every investment we make.
3) What is Seismic’s investment strategy? / How does Seismic choose companies to invest in?
Seismic’s job is to get in on the ground floor of startups that we believe will radically change—and eventually dominate—their industries. Or create new industries altogether.
Disruptive innovators and entrepreneurs shake up their industries, reimagining every aspect of their businesses, including pricing, distribution, and even the way customers interact with their products. Sometimes they even invent a whole new industry – we want to be involved with as many of those as we can.
In the process, they can grow to become giant companies that overtake established players.
Seismic’s strategy is to invest when it believes its money and backing can make the biggest difference. Our sweet spot is when a company has a product and a customer. Bringing on a paying customer transforms an idea into a company. We are happy to meet with companies as they approach this milestone. We also are willing to look at more established entities.
Put simply, we aim to invest in companies early, when our capital, advisors, and backing can make the biggest difference. Exit strategy can be an IPO, a strategic sale, a management buyout – or something else. Our goal is to sell at a much higher valuation than when we started.
Seismic invests in impactful companies focused on developing technology, building products, and acquiring customers. All must comply with the highest standards of integrity and accountability to promote and protect the environment and our communities.
4) Can I pick and choose which Seismic investments I want to be a part of?
No. Your investment in Seismic is in our entire portfolio.
In addition to our SEC-qualified Reg A offering, available to both accredited and non-accredited investors, Seismic has special incentives under a Reg D offering for larger, accredited investors (minimum investment of $50,000).
5) What is Seismic’s approach to ESG?
When you invest with Seismic, you are providing capital to startups that strive to meet the highest standards of integrity and accountability—not only to advance the bottom line, but also to promote and protect the environment and our communities.
Our firm and the startups we invest in are committed to a more responsible and sustainable economy, less inequality and poverty, better health, greater human connection, and more jobs with purpose and dignity.
We value and advance diversity and inclusion across all lines.
Our investment process includes a strong environmental, social, and governance (ESG) focus.
6) Is investing in Seismic risky?
We encourage you to take a look at the risk factors in our SEC-qualified Offering Circular. These risk factors apply whether you are investing under our Reg A+ offering or our Reg D filing. https://www.sec.gov/Archives/edgar/data/1822111/000110465921110708/tm2126409-1_253g2.htm
We are doing all we can to minimize the risk, but the risk is real. Here are some of the steps we take to mitigate risk:
-When you invest in Seismic, you are investing in our portfolio as we build and grow it. We don’t ask investors to pick and choose between different investments within our organization. That’s our job, and you’re backing us to do it.
-We know that early-stage companies run into all kinds of problems that cause them to fail, or just lose their way. One is running out capital – if we’re backing them, that should not happen. When a company is a Seismic Company, the founders can focus on what makes their service or product unique, instead of worrying where the next round of capital will come from, and how they’re going to raise it. Another is getting caught up in administrative activities like benefits, legal, and accounting. Seismic takes over those functions for our portfolio companies that can work on technology, product and sales (the things that create value for the entrepreneurs and their backers).
-There are two important distinctions between Seismic and everyone else in the venture capital industry. There are no capital calls and there are no fees. You will never have ongoing risk that we will demand more capital from you, as almost every other venture capital investor has the right to do. We have structured our company so that when you win, we win. That’s it – everyone has the same kind of stock. Other VC’s will charge investors for things like assets under management, or closing a deal, or selling an asset.
-While we are in our early stages, we are able to issue Qualified Small Business Stock, which protects investors from paying federal and sometimes state capital gains taxes, after a holding period. This is another protection we’ve built into our program that funds cannot provide. (Consult your tax advisor – we do not offer tax advice).
-We surround all our companies with help from our board of advisors, experts in many areas of business building. They’re available to listen, solve a problem, open a door. Many business founders feel they don’t have anywhere to turn when a problem – or an opportunity – arises. We’re doing everything we can to fix that.
-Before we invest in a company, we put it through extensive due diligence – on industry, company, personnel, technology. And we use outside experts to do this. We won’t invest just because we like a company … it has to be vetted by an outside third party.
7) What happens if one of the companies in the portfolio doesn’t make it?
Your investment in Seismic Capital is an investment in all the holdings we acquire—not just one. This diversification of companies, industries, and stages will be a strategic advantage for our shareholders, aiming to mitigate risk and maximize the probability of investor returns. We want all our companies to become unicorns, but likely they won’t. As noted above, we do everything we can to make sure they thrive.
8) What does it mean to purchase shares of a Qualified Small Business Stock (QSBS)?
What are the benefits?
When you invest in Seismic, you are purchasing shares of Qualified Small Business Stock (QSBS), which shields most investors from Federal capital gains taxes when they sell their shares, and often from capital gains taxes at the state level.
Investors who hold their shares for five years or more may avoid paying capital gains taxes when they sell their shares.
There is no lock-up or holding period; investors may sell their shares at any time. However, if you hold your shares for less than five years, the QSBS tax advantage will likely be reduced.
Seismic does not offer tax or investment advice. Please consult your tax professional for personalized advice.
9) How are Seismic investments taxed?
When you invest in Seismic Capital, you are purchasing shares of a Qualified Small Business Stock (QSBS), which shields most investors from Federal capital gains taxes when they sell their shares, and often from state capital gains taxes, too.
If we pay dividends or make distributions while you are holding your stock, as we intend to do, these are subject to tax just like other dividends.
There is no lock-up or holding period; investors may sell their shares at any time.
Subject to IRS restrictions, please consult your tax professional for personalized advice.