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.
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 any one of three ways:
In addition, certain organizations/institutions qualify as accredited investors. A more complete definition is available on the SEC website.
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 Planck Fund Management LLC, a subsidiary wholly owned by Propel(x) Inc which is 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 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.
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:
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 from 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 – if the startup is acquired or goes public. Or 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, as 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. There is no guarantee that an exit event will happen. Some investments fail and you can lose the total amount invested.
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.
Accredited 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.
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.
Accredited 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 Planck Fund Management – 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 or that an exit will occur.
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.
Each syndicate is managed by Planck Fund Management Corporation (“Planck”), a subsidiary of Propel(x) and is responsible for creating and managing syndicate investments.
Planck Fund Management or any successor manager will continue to operate the Syndicate in the event of Propel(x) Inc.’s bankruptcy, liquidation, dissolution, reorganization, or sale.
Funds may be transferred in one of three ways:
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.
We will need your CRD number in order to complete the investment. You can provide this to us by emailing us at email@example.com. You will also have to notify your Broker Dealer prior to making this investment.
At your earliest convenience, please let us know what documents you will need from us in order to receive employer approval. Please email us at firstname.lastname@example.org and we will help you get the documents you need for clearance.
Yes. We will provide wire instructions and SWIFT code when it is time to complete the transaction. Please reach out to us at email@example.com if you need any additional information to complete the transfer.
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):
Under Rule 506(c):
Entrepreneurs begin the process via the List a Startup link from the main navigation bar of our home page and follow 3 simple steps:
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.
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 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) restricts the access to the documents and webcasts that you have 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 third party’s trademark and posted it on Propel(x) and that third 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.
Startups information (presentations, investor calls, all other documents) are privileged access. Startups can approve or reject investor access.
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.