You Knew This Day Would Come: Crowdfunding Site Raising Crowdfunding for Itself

Crowdfunding site SeedInvest today will ask its own community to back it with $3 million $1 million, to top off the $2 million it has already raised from venture capitalists for its Series A round.

SeedInvest is an equity crowdfunding site, where backers pay for a stake in a company rather than swag, goodwill or an effective preorder — as they do on better-known crowdfunding sites like Kickstarter and Indiegogo.

But non-accredited investors (basically, people who don’t qualify as high-net-worth individuals who can afford to lose their shirts if some little startup dies) cannot invest in SeedInvest.

The U.S. Securities and Exchange Commission is still figuring out how to open up equity crowdfunding.

For now, the finished part of the Jobs Act permits companies to publicly advertise the fact they’re raising money, so SeedInvest is doing exactly that. (Actually, the proposed regulations would cap general-audience equity crowdfunding at $1 million per company per year, less than what SeedInvest is looking to raise here.)

“Given that SeedInvest allows individuals to invest alongside VCs, we decided to eat our own dog food and hold the last millions for our own members,” said co-founder and CEO Ryan Feit.

Feit told Re/code that the individual accredited investors who jump into the fray for SeedInvest on SeedInvest will get the same investment terms as venture capitalists who have already agreed to participate. Those are Scout Ventures, Great Oaks Venture Capital, Avenue A Ventures and Krillion Ventures.

SeedInvest, which previously raised a $1.1 million seed round through conventional means, has helped secure investment for a digital vending machine called Vengo and the Virtuix Omni, a treadmill-like device that pairs with the Oculus Rift.

New York City-based SeedInvest, which has a staff of eight, charges monthly fees and expenses to startups that fundraise and manage investors on its portal. The company says it processed 60 investments with a total value of more than $2 million in March.

This article originally appeared on Recode.net.

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