Investment into private companies is widespread and critical for the American economy. Over 600,000 businesses are started in the United States each year and annual investment by individuals into private companies has been estimated in the range of $160 billion. Approximately 8 million Americans have put money into someone else’s business through a debt or equity investment. Globally, a staggering 208 million people put a combined $600 billion into private companies every year.

But while the amount of investment capital is large and the need is great, the process of putting money into a startup or small business is fraught with difficulties. Entrepreneurs struggle to find sources of capital and are unclear of best practices. Deal flow management is difficult for active investors. Closing a deal is complicated and the process can run up expensive legal bills. And after the cash is deposited, investors often find themselves in the dark as busy entrepreneurs neglect updates—at least until they need a follow-on round.

This is why we created CapLinked, a new collaborative platform for investors and private companies. CapLinked aims to empower startups and small businesses to obtain the investment capital they need to grow and create jobs, while giving their investors ongoing transparency.

Companies can use CapLinked’s platform to upload deal information for a capital raise, reach out to potential investors using their professional network, and keep their investors, directors, and advisors updated via a secure data room, messaging, and a customized dashboard. Investors can use CapLinked to keep track of all of their startup investments in one place, review deals from connections in their professional network, and receive updates and manage paperwork for their portfolio companies. And both companies and investors can share information with their advisors.

Creating and sharing a deal on CapLinked is very different from using a crowdfunding service like Kickstarter, which allows users to use the web to collect small contributions to fund the completion of a project. Crowdfunding works great for indie films and albums seeking to raise a few thousand dollars, but most businesses have capital needs too great to be satisfied by small contributions. And while an art project can seek donations by advertising on the web, public offerings from companies are regulated under the Securities Act of 1933.

CapLinked helps companies and investors facilitate real investments. Companies can use CapLinked to set up a private deal and then share it with prospective investors. Recipients of the deal can then share it with their advisors and other accredited investors, making the deal viral. Meanwhile, the company will receive notices from CapLinked whenever their deal is shared or their documents are viewed.

Our platform is also open to companies regardless of industry, so it can be used by tech startups and non-technology companies alike.  And investors on CapLinked can easily add all of the companies in their portfolio. All they have to do is enter in the name and email address of a company officer, and the entrepreneur will receive a notice that his investor would like to receive updates using CapLinked.

CapLinked is free for investors and companies alike. In the future, we’ll add premium features to make the process even easier for both sides. But for now our focus is on refining our product, giving businesses tools for their capital raises, and making sure investors can manage their deal flow while receiving updates from their portfolio companies. And while the first version of our product is designed for US-based companies and investors, we look forward to opening it up to the rest of the world soon.

Try out our service and let us know what you think.