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Frequently Asked Questions

Propel(x) is an angel investment platform for deep technology companies. To date, we have helped 40+ companies raise over $9M in funding from our community of accredited angel, institutional investors, and Hubble Investments.

 

Private placement offerings indicated as “deal type: brokered” on Propel(x) will be conducted through. Hubble Investments, a Propel(x) affiliate. Hubble Investments is a broker dealer and member FINRA / SIPC.

Currently, only Accredited Investors can invest on Propel(x).

Propel(x) takes reasonable steps to verify the accredited investor status of each prospective investor that signs up on the website. This may include a combination of checking publicly available information and gathering specific documentation from such investor as applicable. If we are unable to confirm that an investor is an accredited investor, his/her Propel(x) account will be promptly deactivated.

Under the SEC’s Rule 501, a person can qualify as an accredited investor either of two ways:

  1. By having an individual net worth or joint net worth with a spouse exceeding $1 million at the time of the investment, excluding the value of a primary residence (and any related indebtedness); or
  2. By having an individual annual income exceeding $200,000 in each of the two most recent years, or a joint annual income with a spouse exceeding $300,000 for those years, and a reasonable expectation of the same income level in the current year.

In addition, certain organizations/institutions qualify as accredited investors. A more complete definition is available on the SEC website here.

On brokered offerings, investors can choose to invest either directly or can invest as part of a Syndicate.

Direct Investments are subject to a one-time 2% platform fee.

Syndicate Investments are subject to a one-time 7.5% platform fee. If the investment generates a return, the Syndicate pays 10% carry upon exit to Propel(x) Advisors LLC, a subsidiary wholly owned by Propel(x) Inc and registered as a venture capital firm in California.

Yes, investors can invest directly on private securities offered by Hubble Investments, a Propel(x) subsidiary and registered broker dealer. The startup sets the direct investment amount minimum, which is further, specified in the Deal Terms of each deal profile. Direct investors establish a direct relationship with the startup and have a 0% carry upon exit, although there is still a one-time 2% transaction fee.

Direct Investments are available on any security marked “Deal Type: Brokered” on the Investment Opportunities page. Syndicate investments are also available on these securities as well. To learn more about Syndicates, please see “What are Propel(x) Syndicates and how do they work?

Hubble Investments will perform additional due diligence on the offering, focusing on business, financial and organizational viability of the Startup. Only investments that pass this “Broker Review” and that have received sufficient investor interest will close. A summary of the outcomes will be made available to interested investors to inform their investment decision.

Yes absolutely! Getting your questions answered as you evaluate a startup is critical before making an investment. We encourage you to conduct your own diligence.

For the startups that interest you, you can:

  • Explore information available in the startup profile–this includes a description of the startup, their pitch video, team members, deal terms, and calendar events.
  • Delve deeper by requesting access to restricted startup content such as their investor deck, financial and intellectual property related documents, and webcast videos. The startup will typically grant you access within 24 hours.

Please use this platform to supplement any diligence you conduct on your own. Let us know how we can improve!

Propel(x) will facilitate sharing of updates form the startup to investors who invest either through a Propel(x) syndicate
or directly into the company. Propel(x) will forward updates as they come in and will strive to send updates on at least
a quarterly basis.

You may exit your investment by selling your stake – in case the startup is acquired or goes public. If there is another Accredited Investor willing to buy your stock, per SEC Rule 144, you may also exit your investment by selling your stock privately, so long as you have held your stock for at least a year and are not an “affiliate” of the company (i.e., you are neither an officer of the company nor a shareholder with a greater than 10% stake in the company).The price at which you can sell your stock in such a private transaction may be less than the price you originally paid.

Please keep in mind that Investments in startups are highly illiquid and those investors who cannot hold an investment for the long term (at least 5-7 years) should not invest.

Startups set the minimum direct investment check size that
they will take from individual investors. Investors can
invest as little as $5,000 into companies through Propel(x) Syndicates.
We do not set maximum investment limits.

Pitch deck, financial and IP related documents, webcast videos (investor calls or startup webinars) are under “lock and key” as part of each startup profile. To access this restricted content, you will need the startup’s approval first, which is typically given within 24 hours. The reason for restricted access is to help startups protect the details of their deep-technology from potential competitors — this is also why we ask for your LinkedIn URL.

Investors can freely explore other information available in the startup’s profile, such as startup description, their pitch video, team members, startup terms, and calendar events prior to receiving approval from the startup.

 

Propel(x) follows a set of qualifying criteria to curate startups showcased to investors. Please refer to ‘What are Propel(x)’s criteria for publishing a startup?’ in the Startup Topics section below

  • Propel(x) uses a rigorous screening process when deciding which companies are invited to list on the platform.
  • Startup applications are screened and curated on the basis of certain criteria, many of which are described here.
  • Hubble Investments, LLC, a Propel(x) affiliate, reviews the deal profile, approves a deal for listing and starts the Indication of Interest Phase.
  • Propel(x) then announces the deal to the entire investor base
  • Every startup goes through an Evaluation process.
  • Propel(x) collects indications of interest concurrently until it hits a threshold of $35K in direct investments, or $100,000 in total investments (direct & syndicate) to trigger Broker Review.
  • Hubble Investments conducts a Broker Review on the startup. Propel(x) will only open the deal for investments if this review is successfully completed.
  • Propel(x) opens the deal for direct investments (and syndicate investments if the syndicate threshold has already been met) and will continue to send out deal-specific information to interested investors and via email.
  • Investors can make commitments and sign documents online. The minimum to invest in any deal is $5,000 per investor.
  • Propel(x) aggregates all investor commitments lower than the direct investment minimum check size (as set by the startup) and invests as a single investor in the startup through a syndicate.
    • The pooled investment vehicle is triggered when combined direct and syndicate commitments hit $100,000.
    • Flow of funds: Propel(x) collects investor funds in an escrow account and passes them to the company.
  • Hubble Investments will invoice the startup for a percentage success fee, conditional upon the amount raised.

 

Syndicate Topics

  • Propel(x) Syndicates are pooled investment vehicles which collect funds from several investors into a single Limited Liability Company (Investor Syndicate). The Syndicate then invests as a single entity into a single startup.
  • Investors that want to invest less than the direct
    investment threshold set by the startups can make a
    syndicate investment. Investors can commit as little as
    $5,000 into each Syndicate.
  • A Propel(x) Syndicate will be created after at least $100,000 in combined direct and syndicate investment interest is collected from investors. Propel(x) will continue to collect additional interest until the deal closes on the platform. Once the deal closes online, Propel(x) will complete all paperwork, confirm investment amounts with investors and close the deal.

Startups benefit by expanding their investor base to include investors who want to invest smaller amounts. At the same time, since the Syndicates invests as a single investor, startups need not worry about having numerous small investors on their cap table.

Investors benefit by increased diversification across numerous startups. Since Syndicates allow investment minimums as low as $5,000, investors can expand a given amount of capital across a portfolio of multiple startups. In addition, Propel(x) Syndicates will be managed by Propel(x) – so investors are assured of timely communications and updates from startups received via Propel(x).

Please keep in mind that all Private Placement investments, whether through a syndicate or direct, are speculative and illiquid. All investments bear the risk of partial or complete loss of capital. There is no guarantee that an investment will be profitable.

The Syndicates are intended to be passive investment vehicles. The Syndicates will in most cases accept the terms offered by lead investors and will, in most cases, waive voting rights.

No, as with all private investments, the Syndicates are not liquid investments. As with direct investing, investors should expect to have their capital tied up for several years.

Startups raising on Propel(x) pay a success fee to Hubble Investments LLC.
The success fee is 5% for startups that raise more than $200,000 and 8% for
startups that raise less than $200,000.

Each syndicate is managed by Planck Fund Management Corporation (“Planck”),  a subsidiary of Propel(x) and is responsible for creating and managing syndicate investments.

Prior to November, 2020 syndicates were managed by Assure Fund Management and advised by Propel(x) Advisors, a wholly-owned subsidiary of Propel(x) Inc.

Propel(x) Advisors or any successor manager will continue to operate the Syndicate in the event of Propel(x) Inc.’s bankruptcy, liquidation, dissolution, reorganization, or sale.

Investment Funding Topics

Once escrow is open for the investment opportunity, fund transfer instructions will be available on the Investment Process page.

Navigate to the Investment Process page and scroll down to the Funds Transfer section.


The recipient account details are listed in the Transfer Instructions section, along with the total transfer amount.

  • Total Transfer Amount
  • ABA (Routing Number)
  • Account Number
  • Account Name (Custodian)
  • For Further Credit To (Memo): [Your Name], [Name of Company Your Investing In] Swift ID
  • Wire To Recipient Name

In the memo field, please include your name and the name of the company you are in which you are investing.

 

Funds may be transferred in one of three ways:

  • Bank Transfer (“ACH”) via Linked Bank Account
  • Bank Transfer from your bank
  • Wire Transfer from your bank

One or more methods may be available to you depending on how much money you are transferring, and your decisions regarding convenience, cost, and time.

Method Process Time* Amount Limit Propel(x) Fees
Bank Transfer* Auto-Transfer 3 – 5 days $26,875 $ 0
Bank Transfer* Contact Bank 3 – 5 days Contact Bank $ 0 
Wire Transfer Contact Bank Next day No Limit $ 0

* The Bank Transfer (ACH) method is available to customers with a US bank account. Estimated transfer times, transfer amounts, and bank fees will vary by bank. Contact your bank to determine the exact details for each transfer type. Day = 1 business day, based on the US Federal Reserve and National Bank Holiday schedule.

Propel(x) does not accept physical payment such as a personal check.

No, you cannot fund your investment with a check. Propel(x) does not accept physical checks.

If you are an investor with a US bank account, and you are looking to fund an investment of $25,000 or less, transferring funds via a linked bank account will likely save you time and money.

Once you’ve linked your bank account, you can initiate a transfer in seconds with one click of a button.

You may link your bank account during an investment.

  • Open the Transfer Funds section of the Investment Process Page
  • Select the Link Account button
  • Locate your bank
  • Enter your bank account credentials, typically a username and password
  • Select which account you would like to link and confirm your choice
  • The Investment Process page will reload
  • Open the Transfer Funds section and select “Initiate ACH Transfer”
  • You will receive an email confirmation that the funds transfer has been successfully initiated







 

Navigate to your account page at https://app.propelx.com/account or by selecting your name in the top right corner of the Propel(x) website and select “Account.”

Select the “Linked Bank Account” tab.

Select the “Unlink this Account” button.


Depending on your internet connection, it usually takes one minute or less to link your bank account to Propel(x).

Funds transferred from a linked bank account typically take 3 to 5 business days to complete.

With automatic transfer from a linked bank account, most requests are processed within one business day. If you initiated a transfer on Propel(x), but do not see any bank activity after one business day, please contact investors@propelx.com.

If you request a funds transfer but do not have sufficient funds in your bank account at the time of the request, you will receive an error message and funds will not transfer from your account.

Once you link your bank account, you will be able to automatically transfer funds for any opportunity where the automatic funds transfer is available.

Factors that influence the availability of transfer options include:

  • If the escrow account for the investment is open, or not
  • The total transfer amount
  • The amount of time available before the hard close deadline

Automatic transfer is not available until an escrow account has been opened to receive funds.

Automatic bank transfers via a linked bank account are only available at certain times, and may not be available for all investments.

Automatic transfer is not available for investment amounts that exceed $25,000.

Propel(x) staff will communicate in advance any hard deadlines with regards to when funds must be transferred and investment signatures must be completed for a given investment. It is up to the discretion of Propel(x) staff to determine if there is sufficient time available to allow for bank transfers, either via a bank outside of Propel(x) or via the automatic transfer feature with a linked bank account.

In order to initiate a wire transfer, first contact your bank or brokerage account. You may find wire transfer instructions on your bank website, by calling your personal banker, or by calling your bank services hotline.

Detailed transfer instructions are available on the Investment Process page for your investment.

Once complete, select the “Mark as Funds Transmitted” to notify Propel(x) that funds have been sent.

You will receive an email confirmation to let you know that your funds have arrived in escrow.



You may initiate an ACH bank transfer either by linking your bank account to Propel(x) or by contacting your bank directly and requesting a bank transfer.

The fastest way to transfer funds via a bank transfer is to link your bank account to Propel(x).

If you prefer to initiate a transfer outside of Propel(x), you may find bank transfer instructions on your bank website, by calling your personal banker, or by calling your bank services hotline.

Detailed transfer instructions are available on the Investment Process page for your investment.


Funds that have been sent to an open escrow may be returned to an investor upon written request.

Investors will bear all costs associated with returned funds, which will be netted out of the original transfer amount.

Investors who request a funds transfer reversal will be required to sign a confirmation letter to verify the request and account details for the recipient account. The confirmation letter will be sent from the escrow agent, North Capital Private Securities.

Funds may only be returned to the account from which they are sent.

If you need to reverse a funds transfer, please send a written request to investors@propelx.com to authorise the reversal.

It is not possible to return funds once the investment escrow account is closed and the investment is completed.

Investors located outside of the US, or who do not have a US bank account, should contact their bank to fund an investment via wire transfer.

In some circumstances, you may need to provide your bank additional information about the investment so that they can release your funds internationally.

Please first contact your bank to understand what information they need for an international wire for a private investment, then contact the Propel(x) team to obtain the required information.

You will receive a confirmation email when your funds settle in escrow.

Once you’ve pledged interest in a given opportunity, a link to the Investment Process page will be visible in your Investor Dashboard.

You can locate your Investor Dashboard either by visiting it directly at https://app.propelx.com/account/dashboard or by using the navigation menu and the selecting Investor Dashboard option.

North Capital Private Securities is the company name of the escrow agent that we work with.

Tristate Capital Bank is the name of the bank which houses the escrow accounts for our escrow agent.

Planck Fund Management Corporation (“Planck”) is a subsidiary of Propel(x) and is responsible for creating and managing syndicate investments.

Startup Topics

Yes, offerings on Propel(x) are conducted under Regulation D, promulgated under the Securities and Exchange Act of 1933, as amended. Regulation D governs private placement exemptions, to allow companies to raise capital through the sale of equity or debt securities without having to register their securities with the SEC.

We work with startups that make use of either Rule 506(b) or Rule 506(c) exemptions. See https://www.sec.gov/answers/rule506.htm for more detail.

Under Rule 506(b):

  • A company cannot use general solicitation or advertising to market the investment.
  • A company may sell its securities to an unlimited number of “accredited investors” and up to 35 non-accredited investors who meet sophistication requirements.
  • Self-certification of accredited investor status via a questionnaire is used in general, as the 506(b) exemption does not specify an accreditation process to verify the Investor’s accreditation status.

Under Rule 506(c):

  • A company CAN use general solicitation and advertising to market the investment (i.e., visitors to the Propel(x) landing page can view high-level information about the offering without needing to sign up or sign in)
  • However, all purchasers in the offering must undergo additional steps to verify their accredited investor status (i.e., providing W-2s, tax returns, bank and brokerage statements, credit reports, etc.) before making an investment

Entrepreneurs begin the process via the List a Startup link from the main navigation bar of our home page and follow 3 simple steps:

  1. Apply to List:
    Apply to list your company on Propel(x). Our team will get in touch with you if we have any questions as we review your application. Once our review is complete, our team will make a decision whether or not to list the company.
  2. Sign up for a Propel(x) startup account:
    If you register via LinkedIn, you can immediately begin the listing process. You’ll need to verify your email address first if you register with email.
  3. Complete your company information:
    Enter the name of your startup, and proceed filling
    in basic information like the company logo, website,
    location, and team members. This is also where we ask
    you about your deep technology, accelerator
    affiliations, and previous fundraising. By this point,
    you can access your newly added startup from the
    dropdown menu under your user name on our main
    navigation menu.
    Download our

    startup checklist

    to help you organize and prepare.
  4. Complete your deal profile: Once you have completed all required fields, a fundraising tab will become unlocked for you to add a new deal. Enter the name of your new round, and proceed to uploading deal-specific details such as your pitch text, pitch deck, deal documents, and terms. You can click the ‘Investor View’ button to preview how your deal profile will appear to Propel(x) users. Note that the key company information (e.g. company logo and team members) you have previously filled out will also be used to populate the deal profile. Once you are happy with your deal profile, click “Submit for Review.” You will be notified on screen of any missing required information. You must complete those fields before your can submit again.

Make adjustments: the deal profiles are reviewed by Propel(x) and Hubble Investments, our broker-dealer affiliate. We will need you to address any feedback before we can approve your deal for publication.

Propel(x) uses a rigorous screening process when deciding which companies are invited to list on the platform. Once we receive your deal profile submission, we will carefully review your company information (team, description of the technology etc.) and deal specifics (pitch, terms, supporting documents, etc.) against the below – and other additional – criteria.

  • Your startup falls within the realm of ‘deep technology’ – which we define as companies founded on a scientific discovery or meaningful engineering innovation.
  • Your startup is a C-Corp or an equivalent organization status in any country of incorporation.
  • Your startup has outright ownership of the IP or an exclusive worldwide license for the IP, in case the IP is owned by a 3rd party.
  • Your startup has a prototype or significant experimental data to support the scientific/technological core of the company.
  • Your startup has a full-time CEO.
  • Your startup is connected to reputable incubators, research institutions, national labs or other networks that will give startups the support system and networks to succeed.
  • Neither your startup nor any of its officers, directors, or any covered person is subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act.
  • Your startup has never been party to any legal disputes.

Propel(x) will contact you should we have any additional questions during our review.

Propel(x) charges a 5% success fee for companies that raise greater than $200,000
through the platform. For companies that raise less than $200,000, Propel(x) will
charge an 8% success fee.

Yes. Once our team has approved your deal profile for publication, you can update your company information as the situation arises. For example, investors want to know if you hire a brand new CTO during your fundraise! Most deal-specific information can also be updated (e.g., you can upload a revised pitch deck, add a new webcast, or reschedule an event).

Please be aware, however, that all changes to your deal profile or documents need to be approved by Hubble Investments, our broker-dealer affiliate. Therefore, changes cannot be directly made through your Propel(x) Startup account but need to be requested. Please contact your deal manager if you want to make a change to your profile.

All updates after your deal becomes live will be captured in an activity log visible to all investors visiting your deal profile. While new information is always of interest to investors, frequent changes to key information can lead to confusion and are not advised.

Only one live deal is allowed per startup at any given time. You can start a new round from the Fundraising tab once your current round closes.

Yes, each Entrepreneur User can list multiple startups.

Only accredited investors that are registered at Propel(x) will have access to your deal profile. Propel(x) has restricted the access to the documents and webcasts that you’ve uploaded and to the evaluation information. We will ask you to approve the investors that want access to the restricted deal content.

Generally, indemnification provisions in contracts are typical and provide that if one party breaches the agreement or engages in negligent or willful misconduct related to the relationship, that breaching party will compensate the non-breaching party for the damages caused. For example, if a company raising money on Propel(x) misappropriated a 3rd party’s trademark and posted it on Propel(x) and that 3rd party sued Propel(x), the company would have to defend Propel(x) and pay any damages as a result.

We make extra efforts to protect startups’ information as below:

  • Startups information (presentations, investor calls, all other documents) are privileged access. Startups can approve or reject investor access.
  • Startups can approve or reject any experts that are referred. Only experts approved by startups will be able to participate.
  • Startups can offer a counter comment to all expert answers.
  • For starters, please read how our Evaluation process works.
  • This process is based on best practices followed by the most reputable angel groups. It is very important for startups to help investors understand their company and get them comfortable with investing. Our ‘Evaluation’ process is designed to help investors interact with the company, understand the risks, and ultimately make an informed investment decision.
  • We also understand that startups want to protect sensitive information. To this end, we have enabled startups to approve who can access their investor materials and Evaluation results. Startups also control which experts can respond to investor questions.

Under Regulation D, an issuer is obligated to have a reasonable belief, to take reasonable steps to verify, that an investor is an accredited investor. So long as those items are satisfied at the time of the sale, then subsequent proof that the investor is actually not an accredited investor will not cause a securities violation.

Propel(x) will work with you to reach a mutually agreeable solution. We will generally ask that you allow those investors who have already committed to invest to participate, but we may agree to give up any remaining allocation to outside investors.


The foregoing is not legal advice and no attorney-client relationship is created hereby. You should seek the advice of a licensed attorney in the appropriate jurisdiction before taking any action that may affect your rights.
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