Q: What is the exit strategy?
A: When you invest in Seismic, you are buying equity shares in the company. The exit is completely up to you. Our transfer agent, KoreConX, and other groups already support trading of private shares on their platform, including ours. There’s no market for our shares right now, but we expect a trading market to develop.
One other point worth noting: when you buy shares in Seismic and hold them for five years or more, in most cases, you don’t have to pay capital gains taxes, if that is the investment strategy you choose. It’s your choice — not ours — on how long you intend to hold these shares.
Q: How and when will I get my investment back?
A: We’re prohibited by the SEC from predicting results, but we can say that it’s our intention to make distributions from cash flow or from realizations of investments. We are investing in companies in order to sell our holdings for more than we paid. We believe that the system of mentorship and abundant support we provide to our companies will help them thrive.
Many venture capital-backed companies receive an investment, and then it’s sink or swim. At Seismic, we know that the business of running a company often impedes the goal of growing that company. So we take on a lot of responsibilities for our portfolio companies. They can concentrate on developing technology, building product, and acquiring customers.
Q: Do you plan dividends, and what are the triggers?
A: We plan to start with distributions from proceeds that we get when we sell our interests in our portfolio companies. Eventually, we hope to build to a size where we can provide dividends consistently. Like any established business, we’ll have to balance the ongoing needs of the company against the desire to reward our shareholders for investing with us.
Q: Five years to avoid taxes seems reasonable. Do you predict it will take much longer for the stock price to be higher, or high enough that it will be worth selling some of it?
A: Great question. We’re prohibited by the SEC from making these kinds of predictions. But it’s our goal for the share price to rise, and we highly expect that it will.