Webinar screen

How We Select Startups

Get insight into the foundation of our fund: our process for selecting potential unicorns.

Q&A from the Webinar:

Q: I watch Shark Tank. Is what you are doing anything like that?

A: The “Sharks” all are rich investors. The companies that present to them are like the companies we’ll be investing in – early-stage ventures seeking capital to grow. One difference with Seismic is that you don’t have to be a rich Shark to participate with us. Another is that we use real analysts to come up with valuations. We don’t just shoot from the hip. Another difference is that the Sharks hand over their money and hope for the best. Maybe they help out a little bit. Seismic was designed from the ground up so that our companies can thrive – Seismic corporate takes care of the administrative tasks that can sidetrack a company – like setting up payroll and blue-chip benefits – and our founders and entrepreneurs can focus on creating value.

Q: How much has been raised by the fund to-date? How many companies have you invested in?

A: We’re just getting started with raising capital for Seismic, which, as we mentioned, is one of the first opportunities for retail investors – regular folks — to participate in Venture Capital. To get to this point, we had to create a new investment model and then wait for the SEC to qualify our offering. The founders of Seismic have been working to make this happen for more than two years now. To date, we have raised close to $1 million. We expect to make our first investments in the first quarter of 2022. The email we sent to all attendees of the December 7 webinar named some of the companies we are considering.

Q: It was stated on the webinar that the minimum investment is $1,000. Could I invest more if I wanted to? Is there a limit?

A: There is no upward limit beyond the $49mm boundary of our total offering. You’re welcome to invest more than $1,000 if you’d like, and you also may make multiple investments into your Seismic account over time. At Seismic, our plan is to diversify our investments across a portfolio of early-stage companies, not just one company. So, when you invest in Seismic, you are investing in many venture assets at the same time.

Q: Once I invest in Seismic, what communications should I expect to receive?

A: We’re required by the SEC to report twice a year, and that will be the minimum. We set up Seismic so that we can easily send updates through our investors’ accounts on our transfer agent. You can expect to hear from us whenever there’s news, which we expect will be often.

Q: How do I make money by investing in Seismic?

A: Through distributions as we are able to make them, from our companies producing profits or from when we sell our stakes in them. Also, we hope the stock price will have increased by the time you sell your shares, and that will be a gain too. In our case, most of our investors are protected from paying capital gains taxes if they sell their shares.

Q: Did I hear you say that Seismic investors don’t have to pay capital gains taxes when they sell? How is that possible?

A: We issue what’s called Qualified Small Business Stock, and for most investors who buy their shares directly from the company (not on the secondary market) and then hold them for the holding period (currently five years), there is a federal exclusion from capital gains taxes. Of course, we always recommend that you check with your tax advisor for further information. Q: $5.50 seems like a particular price for a stock. Did you set it at that level for a reason? A: We did. Since we’re Seismic, we took a look at the Richter scale that measures earthquakes. On that scale, 5.5 is the point at which the ground really shakes, but no one gets killed. That seemed appropriate for where we wanted to start out.

Q: What happens if I need to sell my shares?

A: Our transfer agent, KoreConX, has a system where our shares can be traded.

Q: You stated that Seismic has a commitment to diversity and inclusion, but your webinar didn’t look that way. What’s the plan?

A: The webinar featured just the four founders. If you look across our Board of Advisors, you see a set of people more representative of what we’re trying to get to. Beyond that, many of the companies we are considering bringing into the portfolio are led by women, people of color, seniors. From the moment we put up our very first web page, we’ve stated our commitment to our values. You can see that page here.

Q: I really enjoyed this webinar, and I feel like I know way more about Seismic than I’d understood from the materials that are on the website and in your SEC filing. Will you be having more?

A: We’re planning one for January introducing some of our advisors and maybe the first investment company. Please contact us at invest@seismic.company and let us know you’re interested in attending. We’d also be happy to hear ideas you want to know about!