Frequently Asked Questions

NAVIGATION MENU


WHAT IS BIOVERGE

Bioverge is an online investment platform where you can invest in highly vetted healthcare startups. We are open to everyone (accredited and non-accredited alike) and dedicated to healthcare.

For investors, simply sign up, create a profile, search by disease, technology, or geography, review relevant companies, and invest and engage via the click of a button.

For companies, apply for streamlined access to capital and ongoing support from an extended healthcare-focused Network.

WHY BIOVERGE

We believe in doing well by doing good. We offer everyone the opportunity to invest in and support healthcare startups that are changing the world.

  • Access

    • Investing in startups used to be the exclusive domain of venture capitalists and well-connected individuals, but those days are gone thanks to the American JOBS Act. Now, under Title III everyone can invest in high-growth and high-impact startups.
  • Curation

    • We go above and beyond the legal requirements for listing companies on our platform. We’ve developed a tool which we refer to as Dynamic Diligence to help us assess the merits of science and technology-based investments. Every startup must pass our rigorous screening process (read more here).
  • Impact

    • Invest in and help support companies that are pushing the boundaries of human healthcare and tackling diseases that affect us all!
  • Diversification

    • Building a diversified portfolio of investments is a smart way to decrease your overall portfolio volatility and potentially enhance returns. This is true for stocks, bonds, and startups alike (read more about the benefits of adding alternative assets to your portfolio here).

But be aware, investing in startups is risky and you may lose your entire investment (refer to our Investor Agreement).

FOR COMPANIES:
  • Simplify

    • Let us help you streamline your fundraising. We have the tools and resources to help you run a successful campaign with minimal distractions from what you should be doing…running your business!
  • Accelerate

    • Raising capital is never easy, but we can help you accelerate your fundraising timeline by harnessing the collective interests of the crowd.
  • Amplify

    • Our platform acts as force multiplier helping you leverage the funds you’ve raised offline.
  • Focus

    • Our healthcare focus ensures you reach the most relevant investors and have a cohesive and specialized network to support you as you grow and scale your business.
FOR SUBJECT MATTER EXPERTS & HEALTHCARE PROFESSIONALS:
  • Network

    • Opportunities to engage with emerging healthcare technology companies in various capacities, including: assessment, advisory, consulting, mentoring, beta-testing, etc.
  • Informed

    • Keep up-to-date on the latest companies, trends, and technologies in healthcare
  • Impact

    • Leverage your expertise to support new high-impact technologies at their earliest stages
HOW DO YOU SELECT WHICH STARTUPS TO LIST?

We are a highly curated platform. All startups must apply to be listed and undergo a rigorous vetting and evaluation process before being listed. Most startups listed on the platform are referred to us by a partner in our network, however, startups can also apply to be listed without a referral.

Our typical selection process consists of the following steps:

  • Online application
  • Team interview
  • Preliminary diligence
  • Dynamic Diligence

To date, we have accepted less than 5% of companies that have applied or been referred.

WHAT IS THE BIOVERGE SHOWCASE?

Bioverge has strict requirements for the acceptance and listing of opportunities. For those that are too early, we know that Bioverge can still make a difference. We have developed the “Bioverge Showcase”, a program reserved for companies that aren’t yet cleared to fundraise on the platform, but we believe have big potential.

Companies accepted into Bioverge Showcase create a profile and can begin building followers and engaging with the Network. We’ve found that these contacts are natural investors down the road should a portion of your next round be eligible for listing on Bioverge.

To learn more about this program, please contact us at info@bioverge.com.

WHAT IS DYNAMIC DILIGENCE

Dynamic Diligence is a term we coined to describe our curation and diligence process. We utilize a decision-analysis model help us determine the risk-adjusted return for novel science and technology-based investments.

We combine our review with the input of various sources, including our network of subject matter experts (scientific and technical experts as well as professional investors) to create a dynamic feedback loop, hence the “dynamic” part of our diligence process.

We also invite and encourage our members to participate in the process! It often takes a non-obvious idea to disrupt a market, which means the “experts” don’t always have it right. We’ve found that valuable insights can come from any number of perspectives. By including member feedback as an input, we are introducing a wide range of perspectives and facilitating thoughtful debate amongst our community.

One of the primary goals of Dynamic Diligence is to convert these various inputs into an output that is smarter than the sum of its parts. We do this using a believability-weighted decision-making model and sharing of our findings.

While this system is still in its infancy, we fundamentally believe that the combined power of a group is much greater than the power of an individual. Further, not many individuals have the time, expertise, or network to do this by themselves. By taking these steps and sharing the output, we are attempting to increase our collective probability of success.

Bioverge supports a variety of offering types in order to meet the needs of the founders and investors we support. The federal fundraising exemptions we support include:

Comparison offering types table

Bioverge Portal, LLC is a funding portal that operates under Regulation Crowdfunding (“Reg CF”), a law that became effective in May 2016 under the American JOBS Act.

Reg CF allows companies to raise funds by offering securities to all investors, accredited and non-accredited investors alike (subject to dollar amount limitations).

FOR INVESTORS
WHAT DO I GET WHEN I INVEST?

When you invest on Bioverge you receive a financial stake in the company. Most startups on Bioverge prefer to use a security called the Crowd Safe.

Bioverge support extends far beyond the campaign. When you invest, you are joining the founders on their journey and you’re gaining a chance to help be part of their success.

Contrary to popular belief, the success of a startup is not pre-ordained! At Bioverge, we are cultivating an ecosystem to support founders on their journey to build and grow their companies. We do this not merely for the potential financial return, but because we remember that every founder we support is working to serve the patient…an experience we will all have at some point in our lives.

A Simple Agreement for Future Equity

A Crowd Safe (+Link to BV Crowd Safe template) is an investment contract between an investor and a startup company; in exchange for upfront capital from you, the instrument grants you the right to a future equity stake, often at a discount, if certain trigger events occur. As there is no guarantee that these triggering events will occur during the term of the contract, the document details the outcomes of various situations. While the document itself is standardized, each company can customize various deal-specific terms to incentivize investors to participate.

Expanding on the industry standard

The Crowd Safe is a version of the SAFE (Simple Agreement for Future Equity), a standardized contract widely used by angels and VCs who invest in startups, designed specifically for equity crowdfunding.

What do I get in return for my Crowd Safe investment?

When you invest with a Crowd Safe, you become a company investor, but are not yet a shareholder of company equity. The instrument gives the company some flexibility in deciding when and if to convert the Crowd Safe investments into company equity.

For example, in the event of a future equity financing, the company may elect to either (a) convert Crowd Safe investments into preferred equity or (2) “roll-over” Crowd Safe holders and continue the terms of the Crowd Safe. The instrument was designed in this way to avoid the messy situation where a large number of crowdfunding investors automatically appear on the company’s capitalization table. The Crowd Safe also clarifies that converted equity shares will not include voting rights or comprehensive information rights. These two provisions are especially important to early stage companies and later professional investors to prevent disseminating control too widely amongst individuals for future strategic decisions.

However, the Crowd Safe also ensures that you, the investor, is fully-protected. Since the document includes fixed conversion terms, you will always receive the same economic outcome (regardless of whether the company elects to convert) if and when there is a liquidity event.

To incentivize investor participation, companies often include a “valuation cap” or “conversion discount” (or both) in the Crowd Safe.

A valuation cap specifies the maximum valuation at which an investment will convert into shares. Following a financing event (as specified in the Crowd Safe), investor funds will convert at the lower of the valuation cap or the price in the subsequent financing.

NAVIGATION MENU


WHAT IS BIOVERGE

A conversion discount provision gives an investor a minimum discount to the valuation in a future round of financing. Following a financing event (as specified in the Crowd Safe), investor funds will convert at the discounted valuation.

As alluded to earlier, these as-converted investment values will be maintained regardless of whether the company elects to convert your Crowd Safe into company shares at the time of the financing or elects to extend the term of the Crowd Safe.

HOW MUCH CAN I INVEST?

You are restricted to investing a certain amount in any 12-month period depending on a combination of your net worth (less the value of your primary residence if you own a home) and your annual income.

Note: you don't have to make these calculations yourself! Your limit is automatically calculated when you register on our platform and confirmed prior to making an investment.

WHY BIOVERGE

If either your annual income or your net worth is less than $107,000, you can invest up to the greater of either:

  • $2,200, or
  • 5% of the lesser of your annual income or net worth during any 12-month period.

If both your annual income and your net worth are equal to or more than $107,000 then you can invest:

  • up to 10% of your annual income, or
  • up to 10% of your net worth, whichever is lesser up to a maximum of $107,000 during any 12-month period.

Remember, this is your limit for all Title III investments, not just those with Bioverge! Here are a few examples, courtesy of an SEC Investor Bulletin:

Annual Income Net Worth Calculation 12-month Limit
$30,000 $105,000 greater of $2,200 or 5% of $30,000 ($1,500) $2,200
$150,000 $80,000 greater of $2,200 or 5% of $80,000 ($4,000) $4,000
$150,000 $107,000 10% of $107,000 ($10,000) $10,700
$200,000 $900,000 10% of $200,000 ($20,000) $20,000
$1.2 million $2 million 10% of $1.2 million ($120,000), subject to cap $107,000
HOW DO I EARN A RETURN?

Of course, when investing in something as risky as a startup, there may be no return at all.

That being said, should a company’s value rise over time, your investment is also likely to accrue value on paper. It is important to realize that Crowd Safes and preferred equity shares are not easily traded or sold. Generally, you will not receive a liquid return unless the company experiences a liquidity event, such as (a) going public or (b) getting acquired by another company.

In the event of a liquidity event during the term of the Crowd Safe, you may elect to have your cash returned or to convert the Crowd Safe into company stock based on the purchase price and market value of the shares at the company’s first equity financing event.

Please note that there is no guarantee that any of these events occur; if no subsequent equity financing or liquidity event occurs, the Crowd Safe will not convert and therefore produce no return. Should the company experience a dissolution event during the term of the Crowd Safe, subject to preferences applicable to any series of preferred equity, the company will distribute its entire assets legally available for distribution with equal priority among the Crowd Safe investors and all holders of common stock.

CAN I SELL MY INVESTMENT?

Investments in private companies are illiquid and cannot easily be sold. Investors may earn a return by selling the investment when the startup achieves a liquidity event, such as the sale of the company or an initial public offering (IPO).

While you are restricted from selling your investment for the first 12 months post closing, per the SEC’s Rule 144, you may exit your investment by selling a security privately to a limited set of prospective buyers, so long as you have held your security 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). Even still, it’s best to assume there won’t be anyone willing to buy your stake.

It is important that you acknowledge the indefinite holding period and real risk of total loss of your investment when investing capital. Only invest what you can afford to lose.

ARE THERE RESTRICTIONS ON THE TYPE OF COMPANIES LISTED ON BIOVERGE?

Yes. We are a highly curated platform dedicated to companies within the healthcare space. We are focused on solving humanity’s biggest challenges within healthcare. As such, we fund a wide variety of technology types, however, the overarching theme is the convergence of biology and technology.

In order to be considered for listing on the platform, we are looking for disruptive companies that embody this convergence, have established investment terms, and have received a form of third-party validation (e.g. professional investment, grant recipient, accelerator graduate, notable clientele, etc.)

HOW MUCH CAN I RAISE?

Under Regulation Crowdfunding, the SEC limits companies to raising $1,070,000 via Title III per rolling 12-month period.

HOW LONG WILL IT TAKE TO RAISE FUNDS?

Campaigns (start → finish) typically last 30-90 days, however, we do what we can to customize the length of a campaign to best fit your needs. Please contact us to learn more at info@bioverge.com.

WHAT FEES DO YOU CHARGE?

If you reach your funding goal you pay 6% of the total funds raised in cash and 2% to Bioverge in equity coverage (via Crowd Safe).

You are also responsible for covering transaction related expenses, which include things like escrow agent fees and completing a Form C. Companies typically use proceeds from their successful offering to cover these transaction-related expenses.

These fees are typically less than $10,000. Here are a few estimates of what you should expect:

  • Form C: $1,500
  • Escrow: $1,500
  • Financials: $1,000-$5,000
  • Marketing materials (video, social media, etc.): Recommended, but 100% optional

Note none of the transaction-related fees are paid to Bioverge.

Example: NewCo, Inc. hits its funding goal and successfully raises $100,000 at a $10 million valuation, effectively selling 1% of its equity in the offering ($100,000 / $10.1M = 1%). You would pay Bioverge $6,000 in cash and a $2,000 Crowd Safe. In addition, you would owe transaction-related expenses which may be ~$10,000, depending on the type of third-party services you selected.

CAN COMPANIES OUTSIDE THE U.S. RAISE MONEY?

No, only companies based in the U.S. can raise via equity crowdfunding per federal law. If you are based outside the U.S. there are opportunities to raise capital from accredited investors using our Regulation D offerings.

Please contact us to learn more at info@bioverge.com.

WHAT ARE THE COMPLIANCE REQUIREMENTS?

Form C

Prior to launching a campaign, you will need to submit a Form C to the SEC. A majority of the fields are going to be information that is likely to be readily available. The Form C will ask you to disclose certain information which can help people understand the investment and that will help determine whether an investment in your company is appropriate for a specific person.

This includes general information about your company, its officers and directors, a description of the business, the planned use for the money raised from the offering (i.e. use of proceeds), the target offering amount, the deadline for the offering, related-party transactions, risks specific to your company or business, and financial information.

Bioverge will provide support throughout to smooth the process and ensure compliance. Learn more about the required disclosures here

Annual Filing Obligations

If you successfully complete an offering, you will need to file a Form C-AR (Annual Report) and financial statements annually with the SEC. The Form C-AR contains updated disclosure similar what you provided in your initial Form C. Note: while the Form C-AR will be required at least once, there are a number of conditions that could discontinue this requirement in subsequent years.

HOW DO YOU HANDLE CONFIDENTIAL INFORMATION?

We have tiered access levels that allow you to manage who sees your information. All members on the Bioverge platform will have access to your basic company profile, however, you can restrict access to sensitive material such as your investor presentation and any diligence material to investors that you approve.

We will work closely with you on managing access to restricted information. Some companies prefer to manage the access of each individual investor, while other companies happily defer to us to manage the process.

Either way, we work with you to ensure your sensitive information does not fall into the wrong hands!

THE SYNDICATE MODEL

For Regulation D offerings, accredited investors are aggregated into a Bioverge Fund Special Purpose Vehicle (“Bioverge SPV,” “Bioverge Fund,” or “Syndicate”) which is formed for the specific purpose of investing in a startup. By investing through a Bioverge Fund, you will hold a share of the Bioverge Fund instead of holding the company's securities directly.

Bioverge has partnered with Assure Fund Management to create, manage, and administer each Syndicate. Bioverge Funds Management LLC acts as the advisor to each Syndicate.

We also actively syndicate deals through our AngelList Syndicate.

FOR INVESTORS
BENEFITS

The purpose of the Bioverge Fund is to enable access and democratize the investing landscape in early-stage healthcare. Bioverge Funds provide access to highly vetted opportunities, allowing accredited investors to invest smaller amounts of capital into an individual startup, and enabling investors to build a more diversified portfolio.

WHO CAN INVEST THROUGH A BIOVERGE FUND?

Under Reg D (506b and 506c), only accredited investors may invest through a Bioverge Fund.

An “accredited investor” is defined in SEC Rule 506a of the Securities Act of 1933. In order to meet the definition of accredited, you must meet one of the following requirements:

  • Have individual net worth, or joint net worth with your spouse exceeding $1 million
  • Have income exceeding $200,000 in each of the past 2 years and expect the same this year
  • Have income (with your spouse) exceeding $300,000 in each of the past 2 years and expect the same this year
  • Invest on behalf of a VC firm or other registered investment company
  • Invest on behalf of a business with $5 million in assets or in which all the equity owners are accredited

You can refer to the SEC website for additional information here.

ARE THERE RESTRICTIONS ON THE TYPE OF COMPANIES LISTED ON BIOVERGE?

Bioverge takes reasonable steps to verify the accredited investor status of each prospective investor. This may include an investor's self-certification, checking publicly available information and gathering specific documentation from such investor as applicable.

For 506c offerings, we work with a third party to verify your status as an accredited investor prior to accepting funds.

WHAT FEES DOES BIOVERGE CHARGE TO INVESTORS?

Bioverge is not compensated with any management fees or transaction-based revenue. Our compensation comes from carried interest, which is a share of the profits upon a successful investment exit, typically set at 20%

There is also a standard administrative fee charged to investors that to cover the costs of operating the Bioverge Fund over the entire life of the entity, including regulatory filings, accounting, and K-1 distribution. These fees are held within the Bioverge Fund to operate the fund to maturity without any further contributions from investors.

Bioverge has partnered with Assure Fund Management to create and administer our Bioverge Funds for all Regulation D offerings. The administration fee is passed through to Assure in its entirety at the time of closing. If there is any amount left over at the end of life of the Bioverge Fund, it will be returned to investors.

HOW DO I SELL MY INVESTMENT?

Investments in private companies are illiquid and cannot easily be sold. Investors may earn a return by selling the investment when the startup achieves a liquidity event, such as the sale of the company or an IPO. When this occurs, investors receive their pro-rata share of the returns generated from the investment.

While you are restricted from doing so for the first 12 months post closing, per the SEC’s Rule 144, you may exit your investment by selling a security privately to a limited set of prospective buyers, so long as you have held your security 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). Even still, it’s best to assume there won’t be anyone willing to buy your stake!

Bioverge Funds Management LLC will advise Assure Fund Management (the fund manager) when to sell the securities and distribute returns to investors. We will always act in the interests of the investors in the Syndicate. Our compensation is directly tied to maximizing the value of the fund.

It is important that you acknowledge the indefinite holding period and real risk of total loss of your investment when investing capital. Only invest what you can afford to lose.

HOW DO I EARN A RETURN?

Of course, when investing in something as risky as a startup, there may be no return at all.

That being said, should a company’s value rise over time, your investment is also likely to accrue value on paper. If not equity, most startups will use a convertible note or SAFE Agreement to raise funds. The note or SAFE can be converted to company equity if the company raises a "priced equity round" at a later date.

It is important to realize that notes/SAFEs and preferred equity shares are not easily traded or sold. Generally, you will not receive a liquid return unless the company experiences a liquidity event, such as (a) going public or (b) getting acquired by another company.

If you invest through a Bioverge Fund, you will hold a share of the Bioverge Fund instead of holding the company's securities directly. We will manage and sell the company's securities on your behalf and distribute any proceeds to you upon such a sale.

IS THERE AN INVESTMENT MINIMUM?

Investors can invest as little as $2,500 in a Syndicate (investment minimums are always clearly outlined in the deal profile and in the Subscription Document).

FOR COMPANIES
BENEFITS

For startups, the Syndicate structure ensures only the Bioverge Fund appears on your capitalization table. This is beneficial to ensure your follow-on financing won't be at risk. Venture capitalists and institutional investors don’t like a “messy” cap table consisting of a large number of small investors. With a Syndicate, these smaller investors are aggregated and represented by a single entity.

This is also an opportunity to invite individuals in your network to participate that wouldn’t be able to participate otherwise due to a relatively small check size and associated challenges.

If you are interested in a Reg D offering, please contact us at info@bioverge.com.

The Syndication Process

Generally, investors can invest as little as $2,500 in a Syndicate. For each deal, investment minimums are outlined in the deal profile and in the Subscription Document. Syndicates are limited to only accredited investors up to a maximum 99 investors per syndicate.

Once a minimum threshold is met (typically $80,000) the Syndicate is created. Investors who have indicated interest through the platform will then sign documents to invest in the Syndicate. Each Syndicate consists of the following deal documents:

  • Operating Agreement
  • Private Placement Memorandum
  • Subscription Agreement

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

Syndicates are not liquid investments. As with direct investing, investors should expect to have their capital tied up for several years and be prepared to lose 100% of their investment.

WHAT FEES DOES BIOVERGE CHARGE TO COMPANIES?

We do not charge companies fees to startups under the Reg D offering type. Bioverge is compensated based on carry, which is paid by investors upon a successful liquidity event.

Bioverge final lockup white
We use cookies to improve your experience on our site . By continuing to browse, you agree to our use of cookies, privacy policy , and terms of services.
I'm OK with that
I refuse cookies