Delaware to be Home to Nation’s First Crowdfunded “Venture” Exchange

DBOT seeks to create the nation’s first ever “venture” exchange, a crowdfunding exchange that will allow startups and small companies access to capital

By Robert Hoskins

Wilmington, Delaware – New Castle County Council voted to unanimously approve the Delaware Board of Trade (DBOT) resolution, allowing for the issuance of $15 million in revenue bonds to fund the construction of a new stock exchange in the City of Wilmington. The bonds will be the obligation of DBOT and will not place the County’s credit, or taxpayer money, at risk. The Resolution, proposed by County Executive Tom Gordon, was introduced by Council President Christopher Bullockand President Pro Tem Penrose Hollins, the primary sponsors on County Council.

Delaware to be Home to Nation’s First Crowdfunded “Venture” Exchange

“This project may be the biggest thing to happen to Delaware since the Banking Act. Our State will not only be the best choice to incorporate a new business, but also to raise the money necessary to fund it,” said County Executive Gordon.

In May, senior County Officials, including County Executive Gordon, Chief Administrative Officer David Grimaldi, and Deputy CAO Samuel Guy, met with representatives of the Delaware Board of Trade to discuss their proposal, which calls for a new stock exchange aimed, in part, at modernizing the over-the-counter market (OTC) in the United States.

DBOT also seeks to create the Nation’s first ever “venture” exchange, a crowdfunding exchange that will allow startups and small companies access to capital.

New Castle County’s Comprehensive Economic Development Plan identified the State’s relative lack of access to venture capital funding as one of its biggest constraints to economic growth. Startups are not candidates for traditional bank financing and rely on venture capital funding, which has been relatively non-existent in Delaware.

Chief Administrative Officer David Grimaldi, who put the DBOT deal together, noted that “DBOT has the potential of offering new businesses a more attractive alternative to traditional venture capital funding. Overnight, one of our major growth constraints can become our core competitive advantage. This is big.”

“This is a game changer for the state,” said Council President Bullock. “It will be a direct job creator and provide a shot in the arm to both the state and the city of Wilmington.”

Council President Pro Tem Hollins, who sponsored the resolution, noted the economic impact of the nearby Philadelphia Stock Exchange as an indication of the project’s potential for Wilmington. “The Philadelphia Stock Exchange contributed nearly half a billion dollars per year in annual capex spending and over $100 million in annual salaries. If that were replicated in Wilmington, it would be transformational.”

Deputy CAO Samuel Guy, who work closely with the County Executive and CAO in constructing the deal said, “The Delaware Board of Trade will be operated by globally recognized leaders in the financial services industry. The new exchange will position Delaware as a first mover to directly benefit from the incentives created under the JOBS Act and corresponding SEC Regulation A+, which was recently finalized. This may lead to a rebirth of our economy.”

Members and affiliates of The Delaware Board of Trade include former NYSE CEO Richard Grasso, former UBS Financial Services CEOJoseph Grano, former Philadelphia Stock Exchange CEO John Wallace, former Cincinnati Stock Exchange CEO Richard “Nick” Niehoff, and former US Postal Service Governor and top aide to Vice President Joe Biden, Dennis Toner.

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Manta Research Reports that Most Small Businesses are Still Unaware of Crowdfunding as an Alternative Finance Option

Most notably, 23 percent have funded a business project using an alternative lender, other than a traditional bank, but only two percent report having ever used a crowdfunding platform

By Robert Hoskins

Columbus, Ohio – Even though the alternative financing market is expanding at an exponential rate, a new Manta business survey reveals that two-thirds of small business owners still do not think enough funding options are available. Additionally, 69 percent feel the funding environment has not improved in the past 12 months.

Small businesses slow to jump on the alternative financing bandwagon, but interest growing
Alternative funding opportunities, including crowdfunding, are growing at a rapid rate, but the survey showcases a cautious approach by small business owners. Most notably, 23 percent have funded a business project using an alternative lender (other than a traditional bank), but only two percent report having ever used a crowdfunding platform. Lack of awareness and persistent misconceptions may be the cause.

Manta Research Reports that Most Small Businesses are Still Unaware of Crowdfunding

The majority of small business owners who have obtained traditional loans note uncertainty regarding crowdfunding and alternative lending options. Thirty percent of respondents are unsure of the risks, another 20 percent don’t understand the technology associated with these alternative sources and 14 percent report they simply do not trust them. A small number believe crowdfunding sites and alternative lenders are too complicated, while others fear business failure with less traditional financing methods (seven percent and six percent, respectively).

Traditional financing options still most popular with business owners
Manta’s survey revealed that, despite a diversifying lending environment, small business owners overwhelmingly prefer traditional financing options. More than 70 percent of respondents have sought traditional bank loans, savings, credit cards, or help from friends and family to finance their business, while less than a quarter have utilized an alternative lender (other than a bank).

“Small business owners have more diverse options today than ever before when it comes to funding their business,” said John Swanciger, CEO, Manta. “However, we’re seeing a gap between what’s available and the perception among small businesses that the lending environment has not improved. Even though traditional bank loans are difficult to secure, small businesses are still apt to rely on them.”

Of the small business owners who financed their business through alternative lenders, 38 percent did so because they did not qualify for traditional bank financing. Nearly 20 percent sought alternative lending because they needed a small short-term loan, while nine percent recognized the fast access and convenience associated with alternative lending options, and seven percent wanted ongoing access to a credit line.

The survey results also showed that when small business owners received alternative financing, the amounts they borrowed varied greatly. Most (40 percent) borrowed $10,000 or less. Others aimed higher, with 27 percent borrowing $50,000 or more. Remaining respondents were split — 17 percent borrowed $10,000 – $20,000 and another 17 percent borrowed $20,000 – $50,000.

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SolarCity Launches First Solar CrowdBonding Campaign to Raise $200 Million Directly from Consumers

Earnings up to 4% on solar bonds to be paid by income received from monthly solar payments made by thousands of homeowners, schools, businesses, and government organizations across the country

By Robert Hoskins

San Mateo, California — SolarCity (Nasdaq: SCTY) launched the nation’s first registered public offering of solar bonds, creating a simple way for individuals across the United States to earn attractive returns on their investments while also participating in the nation’s transformation to clean energy. The company filed a registration statement with the Securities and Exchange Commission (SEC) this morning to issue up to $200 million in solar bonds initially, and launched a new online investment site http://solarbonds.solarcity.com to make them available directly to consumers.

SolarCity Launches First CrowdBonding Campaign Nationwide in United States

SolarCity is currently providing more than one out of every three new solar power systems in the U.S. The earnings on its solar bonds are to be paid by income received from monthly solar payments made by thousands of homeowners, schools, businesses, and government organizations across the country.

Solar bonds offer consumers a new alternative to other savings and fixed income investment products—such as savings accounts, CDs, treasury bonds, and municipal bonds—and meet a growing appetite for investment opportunities that are both financially attractive and support important goals such as protecting the environment and creating American jobs.

SolarCity has created funds to finance the installation of approximately $5 billion in renewable energy assets with investments from a number of the world’s leading financial institutions and corporations.

Today’s offering marks the first time that individual investors will be given access through a public solar bond offering; providing a new opportunity to participate in the rapid growth of the U.S. solar industry and the transformation of America’s energy infrastructure to clean power.

Solar bonds will be available online through SolarCity’s investment site to all U.S. investors who are at least 18 years old and meet SolarCity’s eligibility requirements, with no fees for purchase. Investors will be able to purchase solar bonds for as little as $1,000, with maturities ranging from one year to seven years and interest rates of up to 4 percent.

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