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SEC Issues Three-Year Research Study on Title III, Regulation Crowdfunding (Reg CF) Fundraising Campaigns

26 Jul

Leading Crowdfunding Industry Analyst Firm, Crowdfund Capital Advisors, States Now is the Time to Update the Regulation to Further Enable Capital Formation

Washington, DC – Recently the Securities and Exchange Commission (SEC) published a staff report on Regulation Crowdfunding (Reg CF), also known as Title III Crowdfunding.

The Commission, in the adopting rules, stated that the “staff will undertake to study and submit a research report to the Commission no later than three years following the effective date of Regulation Crowdfunding on the impact of the regulation on capital formation and investor protection.”

The report finds the size of market, while modest in comparison to the broader financial markets, is evolving and doing so without any material risk to investors. Crowdfund Capital Advisors (CCA) data and analysis were cited in 7 references throughout the report.

“The industry is evolving systematically and responsibly,” says CCA Principal Sherwood Neiss. “With the appropriate adjustments to the regulation we can further enable capital formation without risk to investors. The time is now for the SEC to act.”
Sherwood Neiss, Crowdfunding Capital Advisors, testifies before the SEC

Sherwood Neiss, Crowdfunding Capital Advisors, testifies at the SEC

The CCA data and references used by the SEC were attributed to analysis by CCA and published in VentureBeat as well as Crowdfund Insider. The data comes from CCA’s CCLEAR Database. CCLEAR is the leading Regulation Crowdfunding database that collects, cleans, aggregates and reports on all companies seeking funds via Regulation Crowdfunding as well as those doing parallel 506(c) offerings.

A 506(c) offering is an online accredited investor offering. A parallel offering allows an issuer to run two offerings side-by-side and group the accredited investors in one pool and the Reg CF investors in another. This type of offering is popular for issuers that seek to raise in excess of the $1.07M cap in Regulation Crowdfunding.

Issuers that seek to raise funds via Reg CF must file a Form C (a form filed by a company (issuer) with the SEC before starting to raise capital and discloses financial information for its current and prior fiscal years) as well as a Form C-U (a progress report that an issuer files that discloses total capital raised).

Data that the SEC does not collect in either of these disclosures includes information like industry, a breakdown on the cost of the offering, daily change in capital commitments, daily changes in investors and information on a company’s valuation.

CCLEAR collects all this missing data which allows for more detailed analysis of the market including which industries are most popular with the crowd, which regions of the country have the lowest/highest overall valuations, what industries the crowd is most interested in supporting, etc.

An entire section of the report titled “Cost to issuers of undertaking a crowdfunding offering” came directly from research CCA did with issuers successful with Regulation Crowdfunding.

A key finding from our research, which was highlighted in the report, was that “the total cost of creating a campaign page, issuer disclosures, film, and video, and hiring a marketing firm, a lawyer, and an accountant amounts to approximately 5.3% of the amount raised.”

This average was based on feedback from 81 issuers. “This amount is substantially less than what a typical issuer would incur in a Regulation D offering,” says CCA principal Sherwood Neiss “and is a key reason why more companies should be looking at Reg CF as an attractive pathway to raising funds.”

The report provides a detailed look at how Regulation Crowdfunding has performed through December, 2018. (For people interested in data through today’s date, you can find it on CCLEAR’s Daily Dashboard – see below for the latest data).

“Unlike opponents who said regulated crowdfunding would open the floodgates to fraud, we have yet to see fraud materialize,” says Neiss.

“This is because there are easier ways to defraud investors than to come up with an idea for a business, incorporate it under federal laws, convince a funding portal to list you, spend hundreds of hours and thousands of dollars trying to bring your friends, family and followers to the campaign page, and then hitting 100% of your funding target or the commitments get returned.

Add on top of this the hundreds of discerning eyes picking apart a campaign in the comments section. These types of ‘built-in investor protections don’t exist in other parts of the private capital markets.”

Multiple recommendations were included in the report on how to improve Regulation Crowdfunding. The SEC cited a US treasury Report entitled “A Financial System That Creates Economic Opportunities.”

The Report recommends:

  1. Allowing single-purpose crowdfunding vehicles advised by a registered investment adviser;
  2. Waiving certain crowdfunding offering limits for accredited investors;
  3. Amending certain crowdfunding investment limits by other investors;
  4. Modifying the Exchange Act’s Section 12(g) exemption;
  5. And increasing the limit on how much can be raised through crowdfunding from $1M to $5M.

CCA’s principals were interviewed and cited in the Treasury report. The Fed’s recommendations were a summary of CCA’s more detailed recommendations as requested.

“The industry is evolving systematically and responsibly,” ended Neiss. “With the appropriate adjustments to the regulation we can further enable capital formation without risk to investors. The time is now for the SEC to act.”

# # #

Robert Hoskins, a seasoned Front Page PR veteran provides more than twenty-five years of external communications, media relations, digital social media and SEO skills to Front Page PR’s crowdfunding PR and media relations service portfolio.
Robert Hoskins
(512) 627-6622
@Crowdfunding_PR


Mr. Robert Hoskins is a seasoned marketing veteran with a proven track record of helping entrepreneurs, startups, small businesses as well as Fortune 500 corporations launch successful marketing communications campaigns to gain market traction for a wide variety of products and services.
On a regular basis, Mr. Hoskins consults with crowdfunding campaign managers as well as crowdfunding sites, portals and platforms to deliver successful crowdfunding marketing campaigns.
Google search “Robert Hoskins Crowdfunding PR” to see why Mr. Hoskins is considered one of the industry’s foremost crowdfunding experts that has amassed a huge social media following, which is dedicated to supporting donation-, rewards- and equity-based crowdfunding campaigns.
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Real Estate Crowdfunding to Take Center Stage at Crowd Invest Summit in Los Angeles

3 May

Real Estate Crowdfunding to be Major Focus at Country’s Largest Crowd Investment Conference

By Robert Hoskins

Los Angeles, CaliforniaCrowd Invest Summit, the country’s largest crowdfunding investment conference, taking place on September 6th and 7th at the Los Angeles Convention Center, has announced that it will be expanding its focus on Real Estate Crowdfunding.

Since the signing of the JOBS Act in 2012, Real Estate Investing has been the fastest growing segment of the new Crowdfunding Industry. According to CBRE, the real estate has more than a $1.7 trillion dollars worth of dry power ready to be invested in residential and commercial real estate deals.

“We expect over 3,000 attendees at Crowd Invest Summit this September, a significant portion being investors who are looking to learn about new opportunities,” said Alon Goren, co-founder of Crowd Invest Summit. “Real Estate investing has been a major focus at the summit, and because of overwhelming demand, this September we’re expanding on the topic.”

Crowd Invest Summit will feature the crowd investment industry’s top leaders, investors and firms covering real estate investing over the span of two days in September:

“As one of California’s preeminent real estate and business law firms, we are excited to partner with Crowd Invest Summit for its first-ever discussion on the emerging issues and opportunities presented by the ever-growing real estate crowdfunding market,” said Chuck Jarrell, Partner, Allen Matkins. “Crowdfunding has become an integral part of real estate investing and a topic that will resonate well with conference attendees.”

“We are excited to be back at Crowd Invest Summit this September to discuss how we’ve quadrupled our investor base by combining technology and marketing with an institutional approach to real estate investing,” said Michael Episcope, Principal, Origin Investments.

“Commercial real estate is no longer reserved for the wealthy. Now, everyone has the ability to passively invest in multi-million dollar properties, all thanks to crowdfunding,” said Matt Schuberg, CEO, RealCap. “We are very excited to come back to Crowd Invest Summit in September to bring these types of opportunities to the masses.”

“401(k) and IRA accounts provide access to 12 times more investment dollars than checking and savings accounts,” said Todd Yancey, CSO of IRA Services. “We are excited to explain the process to real estate investors at Crowd Invest Summit how to easily access that capital.”

“Now more than ever real estate companies should focus on the fundamentals and principles in mitigating risks to investors capital. Crowd Invest Summit offers both Real Estate Companies and potential investors to engage first hand and learn more about the risks and rewards of investing in Commercial Real Estate,” said Rayaan Arif, CEO, FundingTree.

# # #

How to Use Crowdfunding PR, Social Media, Websites and Email Marketing to Launch Successful Kickstarter, Indiegogo or Title IV Equity Crowdfunding Campaigns

20 Oct

Crowdfunding PR helps crowdfunding sites and their campaign managers plan effective marketing campaigns that give fundraising efforts a higher than average chance for crowdfunding success!

By Robert Hoskins

What’s the best way to get the word out about a crowdfunding campaign?

Build an in-depth website including a well-provisioned press room full of information such as a primary PR contact info, logos, head shots of executives, press releases, press coverage, product photos, graphs, charts, white papers, and anything else that a reporter needs to write a news brief or a feature length article at 4:00 am in the morning without talking to anyone.

Always cover the: who, what, where, when, why and how much. Use the website as an electronic sales person that provides comprehensive FAQs that lead customers, crowdfunders and investors directly down the path that you want them to follow with regard to product/service education. The goal is to remove all fear, uncertainty and doubt from the sales equation.

Next, offer them a free white paper or something worth of value such as early bird discounts, VIP memberships, etc. that makes them want to share their email address and phone number with your team for future fundraising marketing efforts.

Use this process to build up an email list of 5,000 or more customers that have expressed a desire to purchase your products before the crowdfunding campaign launches. This step will be a major factor in determining its ability to achieve crowdfunding success on the very first day of the campaign.

Build an extensive social media network on Facebook, LinkedIn, Twitter and as many other social media networks as possible. Grow your social media network by sharing the content from your developing website as well as distributing leading industry news stories for your industry.

And, as you are tweeting out the leading news articles, begin building a database of the reporters, their twitter handles and any subject matter experts quoted in the articles. Also note the frequently used buzzwords, catch phrases, and learn what formulas a reporter likes to use when they write a story.

Use these terms to SEO your crowdfunding profile so that customers who are searching for similar products and service to buy may find the crowdfunding campaign accidentally.

Follow reporters, industry analysts and subject matter experts and make friends with them, a process known as building media relations. Learn what they care about, what they do for fun, and what subject matters they like to talk about.

There is a huge difference in trying to pitch a reporter with a cold, un-researched email versus building a relationship with them before asking them to write a story for you. This strategy should also be used to target angel investors, venture capitalists, private equity and institutional investors.

The most important thing to let them know is that based on “my” extensive research, the articles that “you’ve” written, and the “buyers” that have invested/purchased my company’s product and services are a “perfect match” for your “editorial environment” or your current “investment portfolio.” And it is important to note, that this process usually takes around two-to-six months and needs to be done prior the crowdfunding campaign’s launch.

Issue well-written press releases on one of the top four paid wire distribution services. To reporters “free” or “cheap” wire services equal a potential fraudulent company since they are not willing to pay to use a real wire service and, if so, they may not be a reputable company.

Think of press releases as an extension of content marketing. Add links in the press releases to content on your website that goes into a much deeper discussion of the press release’s primary message. Include a “call-to-action” that tells readers exactly what you want them to do.

Also, write the press release as if you were writing the press release specifically to fit within a trade publication’s editorial environment. The easier it is for reporters and bloggers to cut and paste a story, the easier it will be for you to get media coverage.

And don’t think for a minute that a reporter will find your release by themselves. Instead email a copy directly to the reporter, which by now should now know who you are if you have been doing a good job of building a good media relations as detailed above.

Only target publications and media outlets that contain a high composition of the desired target audience with the right purchasing authority and a high propensity to buy your product or service. In other words, if you wouldn’t spend any money to place an advertisement in any given publication, don’t waste your time trying to pitch your story to a reporter that writes for an audience that really has no interest in purchasing your type of product or service.

All of these crowdfunding campaign prep-work marketing strategies should be done at least two months prior to the crowdfunding campaign. The more months that are spent on prep-work before the campaign begins the better the company will be positioned to achieve success on their crowdfunding campaign.

This entire process will educate the founders and their crowdfunding campaign managers and allow the whole team to learn about the industry, their competitors and how to effectively position their product/service and make it desirable in a very competitive global marketplace.

Why? When potential donors/investors like a crowdfunding campaign’s product, the first thing they will do is research how many likes it has on Facebook, what kind of professional resume the founders have built on Linked and how many followers they have on Twitter.

Next, they will do Google searches on the founders’ names, the company name and its brand names. If they find very little or nothing when searching for information on the company, the crowdfunding campaign will be doomed because it means the company clearly does not understand marketing, social media or PR.

However, if there are several pages of Google search results with news stories, press releases, product photos and a huge following on social media, this means that the founders are dedicated, hard-working employees that have exemplified a better than average chance of being successful long after their crowdfunding campaign concludes simply because they understand marketing.

If all of these crowdfunding puzzle pieces are in the correct place, potential crowdfunders will be convinced that there is a very good chance of receiving the high-tech gadget they want to pre-order to help the company get off the ground.

 

What is the biggest unexpected problem crowdfunders face?

The single biggest problem that founders and crowdfunding campaign managers face is not putting together a realistic marketing budget. It will cost at least $20k to shoot a great crowdfunding video and spend several months mastering the marketing prep-work outlined above.

For example, if you went and hired someone off the street and paid them $7.25 times 40 hours a week times 4 weeks a month times 3 months in a prep-work marketing program, that would equate a marketing budget of $3,480.

The reality is that most good marketing people will bill out at least $25 per hour and great talent will bill out at $100 or more per hour.

So using this math, crowdfunding campaigns should plan to spend at least $15,000 for marketing, social media, and PR support and another $5,000 to shoot a great pitch video and write a well-written crowdfunding campaign profile with language that sells. The campaigns that are raising millions of dollars are typically spending at least $50,000+ on one or more forms of digital advertising networks.

There is a whole sub-crowdfunding industry that will offer press releases, backer programs, social media posts, etc. for a couple of hundred bucks. The problem is that they simply will not provide the success that crowdfunding campaign managers are hoping to receive.  These companies know that founders don’t have much money, but are willing to take whatever they can get.

The same is true for marketing companies that promise to work for a 35% post-paid commission after the campaign ends. The problem is that several days into a crowdfunding campaign that raises hardly any money, these commission-only companies will sever their ties, move onto the next campaign with a better chance of being successful and leave struggling founders hanging out to dry.

We get calls from angry crowdfunding campaign managers all the time that have gone through this disappointing experience. There is no such thing as a “Free Lunch.”

What do crowdfunders need do to achieve excellent results for their campaigns?

In our four years of working with founders on their crowdfunding campaigns, we have seen a trend that is worth pointing out. The single best strategy to prepare for any type of crowdfunding campaign for any founder, entrepreneur, startup or existing small business is to perform an in-depth competitive analysis on as many competitors as possible.

This means researching a minimum of 100 campaigns on both Kickstarter and Indiegogo. The same is true for equity crowdfunding campaigns. Examine successful campaigns as well as ones that have failed.

  1. How are their crowdfunding pitch videos shot?
  2. How are their crowdfunding profiles written?
  3. What perks sold the best/worst and how were they worded and priced?
  4. What was their original crowdfunding goal?

Even better is to search for companies that failed on their first campaign and then raised millions of dollars on their second campaign, such as the “Coolest Cooler,” and then examine what the changed between the first and second try.

The second most important thing that successful crowdfunding campaigns need to have is enough support from family and friends to raise the first 30% of the crowdfunding goal.

Nothing is worse than a campaign that only raises $100 during the first several days.

This is why smart founders will set their goal as low as possible so that they can raise 50% of the goal on the first day. A low goal doesn’t mean they can’t raise a million dollars!

What is the number one piece of advice for anyone wanting to do a Kickstarter or Indiegogo crowdfunding campaign?

We highly recommend taking out a yellow writing tablet and going to Crowdfunding PR’s free crowdfunding training classes at https://crowdfundingtrainingclasses.wordpress.com.

Crowdfunding PR Offers Crowdfunding Training Classes to Help Campaign Managers Plan Cost-Effective Marketing Campaigns

Crowdfunding PR Offers Crowdfunding Training Classes to Help Campaign Managers Plan Cost-Effective Marketing Campaigns Using Social Media, PR, Email and Content Marketing

Reading through these free tutorials will educate founders on the various components of the crowdfunding process. For each section, founders should write down their thoughts about what they might want to do to raise money for their own crowdfunding campaign.

Next, take advantage of Crowdfunding PR’s free 30-minute telephone consultations for founders that are considering launching a crowdfunding campaign. If they are willing to learn about crowdfunding first and then write down their initial thoughts on what they might like to do with their campaign, it will lead to a much better first conversation on what they want to achieve with their Kickstarter, Indiegogo or Title III/Title IV equity crowdfunding campaign.

Call Crowdfunding PR at (512) 627-6622 to setup a call!

# # #

Robert Hoskins, a seasoned Front Page PR veteran provides more than twenty-five years of external communications, media relations, digital social media and SEO skills to Front Page PR’s crowdfunding PR and media relations service portfolio.
Robert Hoskins
(512) 627-6622
@Crowdfunding_PR


Mr. Robert Hoskins is a seasoned marketing veteran with a proven track record of helping entrepreneurs, startups, small businesses as well as Fortune 500 corporations launch successful marketing communications campaigns to gain market traction for a wide variety of products and services.
On a regular basis, Mr. Hoskins consults with crowdfunding campaign managers as well as crowdfunding sites, portals and platforms to deliver successful crowdfunding marketing campaigns.
Google search “Robert Hoskins Crowdfunding” to see why Mr. Hoskins is considered one of the industry’s foremost crowdfunding experts that has amassed a huge social media following, which is dedicated to supporting donation-, rewards- and equity-based crowdfunding campaigns.

What New Title III Investors Should Be Trying to Learn Before Making Their First Crowdfunding Investment

4 May

Whether You Are One of the 188 Million New Non-Accredited Investors or a Small Startup or Existing Business that Wants to Learn More about Issuing a Title III or Title IV Reg. A+ Equity Crowdfunding Campaign You Should Read through All of the Information Below

By Robert Hoskins

Austin, Texas (May 2, 2016) – The best way to educate yourself on the Title III investment/investing marketplace is to perform a thorough competitive analysis on all of the Top Equity Crowdfunding Sites and/or the Top Reg. A+ Equity Crowdfunding Sites in the United States, the United Kingdom and Israel, which is where most of the top crowdfunding platforms are based.

A Crowdfunding Guide to Risks, Returns, Regulations, Funding Portals, Due Diligence, and Deal Terms

A Crowdfunding Guide to Risks, Returns, Regulations, Funding Portals, Due Diligence, and Deal Terms

Our Top 100 Crowdfunding Lists are based on website traffic, which should be a first step in determining how many eyes are being delivered by every site.  This will highlight how many crowdfunding campaigns are being launched as well as how many investors are visiting the equity crowdfunding site on a monthly basis.

There has been a great deal of content generated that covers that the Title III Equity Crowdfunding rules that will begin on May 16, 2016 so I will skip repeating the basic information. Up until the past 12-months not much has been written about how to evaluate the up an coming Title III equity crowdfunding deals.

So the purpose of this article is provide lots or relevant documentation that has been written by leading university legal departments and law firms that will soon be guiding investors and issuers through the process of issuing Title III and Title IV Reg. A+ equity crowdfunding securities.

Great Equity Crowdfunding Research Articles:

1. The Coming ‘Transformation’ in Private Capital Markets – This article provides a really good overview of the equity crowdfunding industry to date.


2. Duke Law School – The Social Network and the Crowdfund Act: Zuckerberg, Saverin, and Venture Capitalists’ Dilution of the Crowd – This provides really good a good overview of how to avoid stock holder dilution and making sure that early stockholders are included fair and justly in every exit strategy. It also provides examples of how Zuckerberg diluted one of his business partners right out of the Facebook fortune.

TABLE OF CONTENTS

    1. CROWDFUNDING OVERVIEW
      A. The Five Models of Crowdfunding
      B. Examples of Crowdfunding
      C. The Transformative Power of Crowdfunding
    2. POLITICAL INFLUENCES
      A. Securities-Law Prohibitions on Crowdfunding
      B. Democratic Push for Crowdfunding
      C. Crowdfunding under the JOBS Act
    3. THEORETICAL TENSIONS
      A. Paternalistic Impulses: The Rule 504 Lesson
      B. Securities Regulation: Disclosure vs. Merit Review
    4. VENTURE CAPITALIST ELITES AND THE MASSES
      A. Vertical and Horizontal Risks
      B. Downside and Upside Risks
      1. Financing Rounds, Exits, and Protecting Crowdfunders

a. Price-Based Anti-Dilution Protection
b. Shares-Based Anti-Dilution Protection
c. Tag-Along Rights
d. Preemptive Rights

5. QUALITATIVE PROTECTIONS FOR CROWDFUNDERS

A. Contractual Provisions
B. Venture Capital–Deal-Terms Disclosure Table
C. Congressional and Regulatory Action

CONCLUSION


3. Harvard Business Law Review – Equity Crowdfunding: The Real and the Illusory Exemption – This document has a good section that discusses investment syndicates and why novice investors should follow lead angel investors until they get the hang of assessing crowdfunding securities risk.

TABLE OF CONTENTS INTRODUCTION

I. BACKGROUND

A. An introduction to crowdfunding
B. The rationale for a new exemption
C. The legislative history of the retail crowdfunding exemption
D. The quiet compromise

II. TWO CROWDFUNDING EXEMPTIONS COMPARED

A. Affordability in small offerings
B. Access to potential investors
C. Investor protection
D. Summary and implications

III. AN INCENTIVES-BASED THEORY OF INVESTOR PROTECTION

A. The public theory and retail crowdfunding
B. The private theory and accredited crowdfunding
C. A theory to describe the spectrum

IV. ASSESSING POTENTIAL SEC ACTION

A. Pooled investments managed by a lead investor
B. Public company regulation
C. Verification
D. Liquidity risk
E. Integration and aggregation
F. Substantial compliance
G. The accredited investor definition

V. RECOMMENDATIONS

A. Strengthen accredited investor bargaining power
B. Encourage retail investors to piggyback
C. Harmonize the resale and substantial compliance rules
D. Generate empirical data and conduct a special study

CONCLUSION


4. David M. Freedman and Matthew R. Nutting – Equity Crowdfunding for Investors: A Guide to Risks, Returns, Regulations, Funding Portals, Due Diligence, and Deal Termswhich I have not read, but the following paragraph descriptions definitely look worth reading while learning the the Title III equity crowdfunding securities investment process.

Preface: The New Angel Investors

In 1977, Mike Markkula became the first angel investor in Apple Computer. His $80,000 stake in Apple grew into about $200 million when the company went public three years later. Few opportunities can generate personal wealth as profoundly as being a founder or early investor in a startup that achieves that sort of grand success. Before 2012, however, angel investing was strictly limited to wealthy and extremely well connected people. Thanks to Title III of the JOBS Act of 2012, tens of millions of average investors will, for the first time in several decades, have an opportunity to invest in growing startups and early-stage companies via equity crowdfunding portals. This book covers not only Title III crowdfunding, but Regulation D offering platforms and intrastate securities exemptions (in at least 18 states) as well.

Chapter 1: The Foundations of Online Crowdfunding

Internet crowdfunding gained traction around 2003, starting with rewards-based platforms like ArtistShare, Kickstarter, and Indiegogo. They were followed by donation-based platforms like GoFundMe. Securities (debt- and equity-based) offering platforms launched around 2011 in the United States. Equity offering platforms were still open to accredited investors only, however. The JOBS (Jumpstart Our Business Startups) Act of 2012 legalized a new form of equity crowdfunding for all investors regardless of income or net worth. This chapter clarifies the differences between the various kinds of crowdfunding and provides lessons for investors about risk, reward, fraud prevention, and the wisdom of the crowd.

Chapter 2: Equity Offerings under Reg. D

Starting in 2011 in the United States, startups and early-stage companies began offering securities to accredited investors through Web-based offering platforms, under Rule 506 of Regulation D. Issuers could raise an unlimited amount of equity capital via Reg D platforms. Title II of the JOBS Act of 2012 lifted the ban on general solicitation for offerings made under new Rule 506(c). We profile two pioneers in Reg D offering platforms: MicroVentures (focusing on tech startups) and CircleUp (focusing on earlystage consumer products and retail companies).

Chapter 3: Equity Crowdfunding for All Investors

Title III of the JOBS Act of 2012 created a legal framework for equity crowdfunding, whereby all investors (not just wealthy “accredited” investors) can buy securities issued by startups and early-stage companies. The regulations limit the amount of money investors can invest in equity crowdfunding offerings each year, based on their income and/or net worth.

Chapter 4: Intrastate Crowdfunding, Non-accredited Investors

At least a dozen states got a jumpstart on equity crowdfunding, using the “intrastate exemption” to initiate regulatory frameworks for in-state equity crowdfunding. Georgia was the first U.S. state in which an equity crowdfunding portal successfully funded a startup with participation of non-accredited investors.

Chapter 5: Deal Flow

What kinds of companies will offer equity shares on Title III crowdfunding portals? Will they really have high growth potential and be worth investing in? Will there be a big enough supply of offerings to meet the demand of tens of millions of new angel investors? In this chapter we forecast what kinds of companies— in terms of industry, development stage, growth potential, and other characteristics—will represent the most attractive Title III deals for all (including non-accredited) investors.

Chapter 6: Angel Investors

In depth, we discuss the benefits, returns, costs, and risks of investing in startups and early-stage companies via equity crowdfunding. The possibility of earning spectacular return on investment (even if not very likely) is one attraction of angel investing. We discuss how the emergence of equity crowdfunding creates a new class of angel investors, with some of the same motives and benefits as traditional angels but some new ones, too—especially social benefits.

Chapter 7:  How to Navigate through Title III Offerings

This chapter offers a glimpse behind the scenes of equity crowdfunding portals—how they are regulated, the difference between “funding portals” and broker-dealer platforms, how they decide whether to approve or reject issuers’ applications, how investors communicate with each other, and using an investor dashboard.

Chapter 8: How to Invest, Part 1: Portfolio Strategy

A three- to five-year plan for building an equity crowdfunding portfolio Investing in private securities, including Title III offerings, is one way to diversify your investment portfolio. This chapter helps you decide what percentage of your portfolio assets should be devoted to “non-correlated” alternative assets like Title III offerings; identify your primary motives for investing in startups and early-stage companies so you can narrow down the kinds of offerings that you consider; create an equity crowdfunding budget, pinpointing the amount of money that you can invest each year over three to five years; and build a diversified equity crowdfunding portfolio.

Chapter 9: How to Invest, Part 2: Identify Suitable Offerings

How narrow down your choice of Title III offerings, based on your selection criteria—the first of which is identifying your social, personal, and/or financial motivation for investing in startups and early-stage companies.

Chapter 10: Equity Crowdfunding Securities

Title III equity offerings are predominantly C corporation stock, limited liability company membership units, and convertible debt. This chapter covers the fundamentals of each of those securities (including both common and preferred stock), and their advantages and drawbacks for both issuers and investors.

Chapter 11: Deal Terms

We provide concise explanations of the terms of private securities deals, in four categories: economic terms (like price per share, minimum investment, fully diluted valuation, etc.); control terms (protective provisions, veto power, etc.); terms relating to liquidity events and future financing (liquidation preferences, anti-dilution provisions); and other terms (conversion rights, dividends, redemption rights, right of first refusal, etc.).

Chapter 12: How to Invest, Part 3: Due Diligence

How to research an issuer’s management team, financial reports, revenue projections, business strategy, regulatory compliance, and other key indicators. You have the option of conducting due diligence independently, relying on a sophisticated “lead investor,” hiring a professional adviser, and/or collaborating with members of the crowd through on-platform discussions and Q&A forums.

Chapter 13: How to Invest, Part 4: Funding and Post-funding

We talk about the on-platform investment transaction, your rights and obligations as a shareholder, and how to monitor and manage your equity crowdfunding portfolio.

Chapter 14: Liquidity and Secondary Markets

Equity crowdfunding securities are relatively illiquid, especially in the first 12 months that you hold the investment. Secondary markets will probably develop over the next few years to provide liquidity to Title III securities. We look back at how secondary markets developed for accredited investors in the past 10 years, and project how they might develop for all investors in the near future.


5. Charting a New Revolution in Equity Crowdfunding: The Rise of State Crowdfunding Regimes in the Response to the Inadequacy of the Title III JOBS Act – Good analysis of intrastate crowdfunding exemptions.

6. The Next British Invasion is Securities Crowdfunding: How Issuing Non-Registered Securities through the Crowd Can Succeed in the United States – Good analysis of equity crowdfunding in the U.K.

7. Breaking New Ground: The Americas Alternative Finance Benchmarking Report – Research report on peer to peer lending, another form of alternative finance.

# # #

Robert Hoskins, a seasoned Front Page PR veteran provides more than twenty-five years of external communications, media relations, digital social media and SEO skills to Front Page PR’s crowdfunding PR and media relations service portfolio.
(512) 627-6622
@Crowdfunding_PR


Mr. Hoskins is a seasoned marketing veteran with a proven track record of helping entrepreneurs, startups, small businesses as well as Fortune 500 corporations launch successful marketing communications campaigns to gain market traction for a wide variety of products and services.
Hoskins is one of the crowdfunding industry’s foremost crowdfunding advocates and has amassed a huge social media following that is dedicated to supporting donation-, rewards- and equity-based crowdfunding campaigns. Due to the overwhelming demand from the general public for crowdfunding information, he empowers entrepreneurs with some of the internet’s most affordable ($20) online crowdfunding training classes, which provide insight to startups around the world on a 24 x 7 basis.
Hoskins adamantly believes that the crowdfunding industry will empower everyone in the United States to rediscover the possibility of living the American dream with a little hard work, a great business idea and the dedication to researching, planning and launching a well-thought-out crowdfunding campaign. He consults on a regular basis with crowdfunding campaign managers as well as crowdfunding sites, portals and platforms to deliver successful crowdfunding marketing campaigns.

Paid Mentorship Management Consulting Fees Can Help Fund College University Incubator and Accelerator Programs

14 Mar

Allowing Mentors to Earn Revenue while Colleges/Universities Collect a Commission for Facilitating the Knowledge Transfer is Great Way to Bring Leading Expertise to Remote Areas

By Robert Hoskins

Paid Mentor Management Consulting Fees

Another option for schools to generate funding is to create a management consulting practice in tandem with college and university incubators and accelerators. Many sources of mentorship can be attracted by allowing the subject matter experts to generate revenue by providing mentoring services for a consulting fee. 

Incubators/accelerators could take a 15% commission out of the consulting fee to add monthly recurring revenue to their incubator and accelerator programs. Payments for services can be paid in cash and/or might include an option to purchase equity shares in the first class of equity shares being offered during the seed fundraising round.

Using this strategy, schools with video conferencing capabilities can tap into talent on a worldwide basis. Using teleconferencing and distance learning applications schools can access the world’s leading entrepreneurs, venture capitalists, and private equity investors, even in remote locations.

A single community college might not able to afford a speaking engagement with Guy Kawasaki, Elon Musk or Richard Branson, but working with numerous community colleges in any given state they could launch a rewards-based crowdfunding campaign to solicit enough cash to pay for an event that could be broadcast to a network of participating schools.  These single session tutorials, mentoring sessions or consulting engagements could be setup in a very similar manner to the very popular TedX talks.

Other sources of revenue can be earned by hosting conferences, trade shows, pitching competitions and/or training classes.

Learn more about crowdfunding:

 

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Want to learn more about setting up a college/university crowdfunding ecosystem?

Please fill out this form to get started:

 

1st Texas Equity Crowdfunding Community Outreach Event to Unveil Texas Crowdfunding Portals at Texas St. University

11 Feb

Learn How to Raise Money for Startups and Businesses with Texas Equity Crowdfunding Sites and a Crowd of 20 Million Accredited & Unaccredited Investors


Texas Equity Crowdfunding Event Agenda

Mission: To educate entrepreneurs, startups and any existing Texas-based business on how they can utilize a Texas Crowdfunding Portal (TCP) to market a Private Placement Memorandum (PPM) to over 20 million non-accredited and accredited Texas investors to raise startup venture capital.

Tonight’s guest speakers will cover the following information:

  1. Information on the new Intrastate Texas Crowd Exemption Rules
  2. What information needs to be filed with the Texas State Securities Board
  3. What type of disclosures are required by every Texas crowdfunding platform
  4. What type of marketing can be used to raise awareness for equity investment opportunities
  5. What qualifications need to be met before investing on Texas crowdfunding platforms
  6. What precautions should be taken prior to making any financial investments

Crowdfunding Platforms:

Crowdfunding Escrow Service:

Question & Answer Session:

  • Panel Discussion Q&A

Research Links:

Texas State Securities Board (TSSB) Crowdfunding Rules:
http://www.ssb.state.tx.us/Important_Notice/Texas_Intrastate_Crowdfunding.php

Texas Crowdfunding Network:
http://www.meetup.com/austin-crowdfunding-network

Texas Crowdfunding Blog:
https://crowdfundingpr.wordpress.com

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Contact:
Robert Hoskins

(512) 627-6622
@Crowdfunding_PR

Positive Letters Needed to Support the SEC’s Ability to Crowdfunding Pass Title III Guidelines for Small Business

8 Sep

The SEC Claims that It Does Not Have Sufficient Positive Industry Support to Implement Title III Crowdfunding. Let’s Change that Today by Sending in 10,000 Letters and Tweets from American Entrepreneurs and Small Businesses that Want Access to Small Business VC

By Robert Hoskins

Washington, D.C. – I’d like to start off by saying “Hats off” to Justin Ryan and Terell Jones for putting on an awesome Kickercon crowdfunding event in Houston last month. It was, by far, the best crowdfunding conference we have attended to date! All of crowdfunding subject matter experts were there, but this conference did a much better job than most because they addressed where the crowdfunding industry is headed instead of just rehashing the old facts and figures of the JOBS Act.

There were numerous tracks on the Texas Intrastate Crowdfunding Exemption, an excellent Crowdfunding Boot Camp put on by InventIt2Day’s Conley Giles, and great panel discussions on the up and coming real estate crowdfunding industry, but the most important event by far was a presentation by Ron Miller, who has been meeting with numerous officials the SEC in an attempt to try and understand the SEC’s hesitation to implement Title III crowdfunding rules, which are now way overdue.

 

Please Retweet - I suppport Title III Crowdfunding

Please Retweet – We support Title III Crowdfunding to Start Small Businesses!

 

Mr. Miller gave a convincing presentation based on comments from SEC Commissioners and many of its staff members.  The SEC is basically saying that in 560+ pages of public comments, the negative comments outweigh the positive comments supporting the implementation and communicated that if they had a lot more positive support from Americans then they would be more motivated to pass the final guidelines.

In the Crowdfunding Industry we pride ourselves on utilizing the crowd to accomplish many objectives such as raising money for crowdfunding campaigns and helping crowdfunding platforms police potential equity investment deals.

Unlike many established industries, members of the crowdfunding industry have very advanced social media capabilities and very large networks of contacts on Facebook, LinkedIn, Twitter, YouTube and other important social media networks. One of Mr. Miller’s main points was that the crowdfunding industry should begin working together to leverage these social media networks to drum more support.

During the event’s Q&A session, with an after show audience of almost 500 crowdfunding enthusiasts, several comments suggested developing a Title III Crowdfunding Support Form Letter and providing the contact information on where to mail or email these positive Title III Crowdfunding support letters.  Others suggested creating HeadTalker or ThunderClap campaigns.

In addition, the audience and the event hosts suggested contacting your U.S. House of Representatives and U.S. State Senators to let them know that support for Title III Crowdfunding Rules will be an important factor when considering who to vote for this fall.

Please show the SEC your overwhelming support for Title III Crowdfunding and let them know that the general public, entrepreneurs and small businesses are 100% behind creating a Title III equity crowdfunding industry in the United States. Please download a copy of this Form Letter, add your contact information and then send it the SEC. It will take less than 5 minutes, but can make a difference for the crowdfunding industry.

Please repost, retweet and reblog this story.  All copyrights are waived on both the text and the image. Please retweet and republish at will!

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Feel free to mention these handles in your tweets:

 

Top Cities in the United States to Start a Crowdfunding Training Class, Seminar or Workshop Business

18 Apr

Top Crowdfunding Training Classes Available throughout the United States


Searching for an affordable crowdfunding training class, workshop or seminar to learn more about how to launch a crowdfunding campaign to start a new business and start bringing entrepreneur’s and inventor’s creative business ideas to life?   States below with a number have at least one scheduled crowdfunding training class. Those with a zero have none planned.

If you a true entrepreneur and there is a zero listed for your state, you should consider starting your own crowdfunding training business.  We supply the instructor training and class materials. All you need to do is find a venue and start setting up local training classes.  Click on any state with a zero for more information.

States that are listed in Bold Type have already approved Equity Crowdfunding for unaccredited investors. If you want to receive information on where to take a crowdfunding training class or to sign up up to become a certified Crowdfunding Training Instructor, please fill out this form:

Reward-Based Crowdfunding Seminar: Everything You Need for Success! – Presented by the NYC Crowdfunding Meetup Group in New York

24 Mar

Crowdfunding Subject Matter Experts Will Be Covering the “A-to-Zs” of Crowdfunding Strategies Including Important Case Studies, Research Strategies, Buzz Generation Techniques, Shooting Viral Pitch Videos as Well as How to Protect Intellectual Property

By Robert Hoskins

New York, NY – To meet the demand from entrepreneurs, startups, and small businesses, the NYC Crowdfunding Meetup Group will be hosting a special Crowdfunding Seminar on April 1, 2014 at 6:00 pm to 9:00 pm. The event will be held on the 60th floor of the Empire State Building in the 1800 Accountant Office, which is located at 350 5th Avenue, New York, NY 10118.

Lucy Norris is a British correspondent who is now based in NYC. She freelances at a variety of media outlets including Alleywire, Millennium Magazine, the TV show “On Deck With Lucy”

Lucy Norris is a British correspondent who is now based in NYC. She freelances at a variety of media outlets including Alleywire, Millennium Magazine, the TV show “On Deck With Lucy”

Alex Feldman, the event organizer, has assembled an excellent team of crowdfunding subject matter experts that will be sharing tips, tricks and strategies on how to research, plan, and launch successful Rewards-based Crowdfunding campaigns. The event will be videotaped by the Reality Crowd TV crew.

Featured Speakers:

  • 6:00 pm – 6:30 pm
    Registration
  • 6:30 pm – 6:40 pm
    Introduction to Reward-Based Crowdfunding Campaigns
    Alex Feldman, CEOCrowdsUnite
  • 6:40 pm – 6:50 pm
    Crowdfunding Case Study: How I raised over $22,000!
    Alicia HansenNYC Salt Founder & Photographer
  • 6:50 pm – 7:00 pm
    How to Research Existing Crowdfunding Projects
    Helen Donnelly, CMO, CrowdFunding4All
  • 7:00 pm – 7:10 pm
    How to Create a Successful Crowdfunding Campaign
    Brian Meece, CEO, RocketHub
  • 7:10 pm – 7:20 pm
    How to Make a Viral Crowdfunding Pitch Video
    Lucy Norris, Managing Editor, AlleyWire
  • 7:20 pm – 7:30 pm
    How to Create Buzz for Crowdfunding Campaigns
    Howard Sherman, President, CrowdFundBuzz
  • 7:40 pm – 8:30 pm
    Crowdfunding Question & Answer Session
  • 8:30 pm – 9:00 pm
    Social Mixer & Business Networking Event

Reservations:
Tickets are $50, but early birds who sign up before Wednesday, March 26th will receive a $20 discount. The event is open to the general public, but seating is limited, so sign up ASAP at: http://www.meetup.com/NYC-CrowdFunding-Networking/events/171128902/.

Media:
Reporters get in free, but need to RSVP prior to the event with Crowdfunding PR Campaigns by sending Press RSVP request in order to enter the Empire State Building and proceed to the 60th floor. Members of the press should email rhoskins@frontpagepr.com for more information.

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Reality Crowd TV’s Jessica Sun Interviews Crowdfunding Service Provider CrowdCrux’s Salvador Briggman

4 Feb

Reality Crowd TV Interviews Sal with CrowdCrux

Jessica Sun, the CEO of Reality Crowd TV, a Reality TV Series, Show, and Program about the Crowdfunding Movement, interviews Salvadore Briggman, Crowdcrux and Kickstarter Forum, on his thoughts related to the growing Crowdfunding movement.

Company Websites:

Pitch your story to the Reality Crowd TV Show:

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