Leading Crowdfunding Industry Analyst Firm, Crowdfund Capital Advisors, States Now is the Time to Update the Regulation to Further Enable Capital Formation
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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).
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Robert Hoskins
(512) 627-6622
@Crowdfunding_PR
Chinese Entrepreneurship Global Study Shows Staggering Increase in Shenzhen and Hong Kong Entrepreneur Activities Compared to 64 Competitive Countries Worldwide
16 FebExperts advocate the two cities join force in formation of complementary advantages to foster international competitiveness for entrepreneurship
Hong Kong, China – New research released by the professors of The Chinese University of Hong Kong (CUHK) Business School’s Center for Entrepreneurship (CfE) and Hong Kong Baptist University (HKBU)’s School of Business shows that entrepreneurship in Hong Kong and Shenzhen is on the rise.
A collaborative effort by CUHK CfE, HKBU School of Business, the University of Hong Kong’s Faculty of Business and Economics, Shenzhen Academy of Social Science and Savantas Policy Research Institute, the research titled “Global Entrepreneurship Monitor (GEM) Hong Kong and Shenzhen Report 2016-17” provides a detailed analysis of the current status of entrepreneurship in Hong Kong and Shenzhen.
The GEM Study Compares the Results with Past Indicators for Ecosystems and Provides an International Benchmark with 64 Other Economies Worldwide
The study compares the results with past indicators for both ecosystems and provides an international benchmark with 65 economies worldwide. It is part of the global initiative, 180-page Global Entrepreneurship Monitor (GEM) Research Report, the world’s foremost comparative entrepreneurship study and a trusted resource on entrepreneurship for key international organizations such as the United Nations, World Economic Forum, World Bank and more.
In the recent few years, Hong Kong and Shenzhen have experienced an explosive growth in the start-up support ecosystem. The GEM Hong Kong and Shenzhen Report 2016-17 shows that the start-up rates recorded a staggering increase in Hong Kong and Shenzhen from 2009 to 2016. In mid-2016, the early-stage entrepreneurial activity among the adult population was estimated at 9.44 percent (3.64 percent in 2009) in Hong Kong and 16.04 percent (4.8 percent in 2009) in Shenzhen.
The growth has been driven by a rapid increase in Shenzhen’s new (+284 percent) and Hong Kong’s growth in nascent businesses (+206 percent) in comparison with 2009 statistics. The prevalence rates of established businesses recorded an increase as well: +389 percent for Shenzhen and +109 percent for Hong Kong. It is worth noting that while entrepreneurship rates are on the rise in Hong Kong and Shenzhen, they are declining in other places in China. Both cities have developed a separate start-up culture and entrepreneurial ecosystem that operate independently from the rest of the Mainland.
The positive changes were not limited to early entrepreneurship rates only. The research team also observed a major shift in attitudes and entrepreneurial intentions. In particular, 56.8 percent of the adult population perceives start-up opportunities in Hong Kong. In Shenzhen, the same proportion of individuals who declared they possessed necessary skills and knowledge to start a new business (35.8 percent), also reported their intention to start a business in the next two years (36 percent).
Comparing to 2009, the population with entrepreneurial intentions in Hong Kong grew from 7.3 percent to 19.7 percent in 2016, representing an impressive increase of +170 percent. Similarly, in Shenzhen the intentions grew from 17.6 percent to 36 percent, an increase of +105 percent. According to the study, cultural conditioning and attitudes towards entrepreneurship, perception of own skills, and exposure to entrepreneurship practices all had a positive impact on intentions to start businesses. Successful entrepreneurs are also regaining their high status and are promoted by local media in Shenzhen and Hong Kong.
In terms of financial support, Hong Kong early-stage firms have lower capital requirements than that of their Shenzhen counterparts, which may be related to the lower technological intensity of Hong Kong firms. 92 percent of nascent entrepreneurs in the two cities declared that their principal source of financial support was their own savings. The role of the family in financing new ventures is still significant in Shenzhen, but not so much in Hong Kong.
Banks are also more supportive of startups in Shenzhen than in Hong Kong and so are venture capitalists, which could be explained by a higher prevalence of start-ups with profound market impact. In Hong Kong, on the other hand, crowdfunding is more prevalent as the source of capital for early-stage businesses, a sign of a more established product innovation.
Aligned with higher entrepreneurship rates, the research team also found a growing culture of informal investors developing in both cities. Shenzhen observed a much higher informal investment prevalence rate (20.5 percent) than Hong Kong (6.5 percent) of the adult population. In fact, Hong Kong and Shenzhen informal investors were two of the most generous among all economies in the study with a contribution of US$70,565 and US$76,112 respectively.
The study has also recorded a dramatic change in investment patterns for Shenzhen. While in 2009 individuals were rather investing in family members, in 2016, friends and neighbors had been the first choice which was aligned with that of Hong Kong.
In addition, the research team interviewed 39 Hong Kong and 37 Shenzhen experts in the field of entrepreneurship about their opinions on how the cooperation between Hong Kong and Shenzhen that would increase the cities’ international competitiveness. The most frequent recommendation was to leverage the natural industry compatibilities between Hong Kong and Shenzhen. Other recommendations include:
- Joint development of industries such as Internet-of-Things, Smart City, Health Tech, Edu Tech, Fintech or E-commerce
- Joint R&D initiatives aiming at cross-border innovation, sharing of talents and intensification of knowledge exchange
- Introduction of joint or cross-border education to develop a shared cultural understanding of each other through opening more world-class academic institutions catering to students from both sides of the border
- Coordinating government policies for entrepreneurship between the two economies, e.g. joint visas for entrepreneurs that would facilitate cross-border operations of many start-ups
“If Hong Kong and Shenzhen join forces in the formation of complementary advantages on entrepreneurship, it would strengthen the international and Mainland competitiveness for both,” said Prof. Kevin Au, Associate Director of CUHK CfE and Associate Professor of the Department of Management at CUHK Business School. “This can be the first step towards the development of the Hong Kong-Shenzhen megalopolis.”
“Hong Kong and Shenzhen are facing a fantastic opportunity: that of being in the perfect position to build a highly unique and internationally competitive start-up hub with an unparalleled ecosystem compatibility between the two cities and a supportive informal investment culture,” said Dr. Marta K. Dowejko, Research Assistant Professor in Entrepreneurship of the Department of Management at HKBU School of Business. “While Shenzhen’s start-ups are well geared to deliver innovative ideas with high growth potential, Hong Kong’s entrepreneurs possess the know-how in taking ideas to the next level and ensuring their long-term sustainability. The results from this year’s GEM report give testament to this unique setup that no other place in the world has.”
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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 MayWhether 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
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
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
- CROWDFUNDING OVERVIEW
A. The Five Models of Crowdfunding
B. Examples of Crowdfunding
C. The Transformative Power of Crowdfunding - POLITICAL INFLUENCES
A. Securities-Law Prohibitions on Crowdfunding
B. Democratic Push for Crowdfunding
C. Crowdfunding under the JOBS Act - THEORETICAL TENSIONS
A. Paternalistic Impulses: The Rule 504 Lesson
B. Securities Regulation: Disclosure vs. Merit Review - 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 Terms, which 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.
# # #
(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.
Top 10 Tips for Selecting Crowdfunding PR Firm for Promoting/Marketing a Crowdfunding Campaign
4 MayHiring an Experienced PR Firm with Strong Media Relations Experience and a Strong Database of Developed Crowdfunding Media Contacts Can Make or Break a Serious Crowdfunding Campaign Drive
Robert Hoskins, Director, Crowdfunding PR/Media Relations
By Robert Hoskins, Front Page PR
Follow these simple tips to find the best Crowdfunding PR firm to help launch a successful Crowdfunding PR campaign for fundraising platforms, portals, websites and individual Crowdfunding campaigns:
- Check to see how many years the PR firm has been in business and examine what industries they have served
- Review their Crowdfunding activity on popular social media sites such as Linkedin.com, Twitter.com, etc. to see how knowledgeable they are on popular Crowdfunding news trends in the media
- Make sure they include a wide variety of written press materials in their monthly retainer, such as a Crowdfunding campaign profile, at least four press releases for a 30-day campaign, a Frequently Asked Question (FAQ) sheet, a short white paper, online press room, and media training/message maps for executive interviews, etc.
- Make sure that you will be working with a media relations expert that has at least 10+ years of media relations experience. The more media relations experience the better your publicity results will be.
- Beware of PR firms that recommend signing up for expensive online tutorials, which then later pressures clients to buy more expensive PR services when they realize that they simply do not have enough time, experience or media skills to pitch stories to reporters successfully
- Beware of PR firms that want to use free or cheap news wire distribution services. Always use a premium news wire service such as Businesswire.com, Marketwire.com, PRNewswire.com or PRweb.com.
- Make sure the PR firm adheres a strict no conflict of interest policy meaning they do not represent two companies or Crowdfunding campaigns that would be considered competitors at the same time.
- Ask for a PR publicity guarantee and a clip report that shows clients all the news stories that their Crowdfunding PR campaign generated
- Ask the PR firm what other types of value-added marketing services are available such as press conferences, community outreach, email marketing, Google advertising/analytics, building fundraising donor databases, data mining, trade show speaker placement, product launches and perks fulfillment.
- Last, but not least, make sure the PR firm is thinking long term with initial Crowdfunding PR campaign. This means they need to completely understand building brand share awareness as well as business distribution channels for your products and services.
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Click here to setup a conference call to learn more about launching a Crowdfunding Campaign!
Related articles:
- Five Tips on How to Get Great Publicity for Crowdfunding PR Campaigns in Media Outlets Everywhere
- Top 10 Value-Added Business Marketing Programs that Every Crowdfunding Platform, Portal or Fundraising Website Needs to Attract Potential Investors and Fundraising Profile Managers
- New FilmFunder Crowdfunding Website Targets Hollywood Film & Entertainment Professionals
- Crowdfunding Expected to Drive Alternative Financing Market to More than $150 Billion by End of Year 2015
- Free Crowdfunding Webinar on Green For All
- Bellevate Launches Boutique Crowdfunding Site for Women Entrepreneurs, Startups and Inventors with Great Ideas
- Big-Concepts Launches New Crowdfunding Platform in Virginia to Fund Creative Projects
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Five Tips on How to Get Great Publicity for Crowdfunding PR Campaigns in Media Outlets Everywhere
16 AprLooking for a cost-effective way to get some positive publicity for your Crowdfunding Platform or Crowdfunding PR campaign to reach potential donors/investors?
Front Page PR is the #1 Crowdfunding PR firm in America for Fundraising
Follow these simple directions:
- Hire a Crowdfunding PR firm to help you write a search engine optimized press release
- Release the news via a professional, paid newswire service (free news wires are ignored by reporters)
- The same Crowdfunding PR firm should also conduct a media relations campaign to contact all reporters that cover your Crowdfunding subject matter
- Post the news wire URL link from your press release into one of the following vertical business Crowdfunding PR categories so donors, investors and members of the press can find it
- Make sure to include a picture of the product, an executive headshot or your company’s logo. Stories with a picture/logo/infographic are picked up 50% more by the press.
Select one of the following categories and post your press release: Business , Cities, Communities, Crowdfunding Platforms, Education, Film, Music, Entertainment, Games, Videos, Social Good, Solar, Renewable Energy and Software, Hardware, and Technology Gadgets. Don’t see your category listed? Tell us to add it and we will.
Both Crowdfunding platform owners and Crowdfunding campaign managers and PR staff can post their news and press releases into these free discussion forums to promote maximum social media exposure. Don’t forget to include hashtags (#), which Linkedin.com is now linking to people and companies with Linkedin.com profiles.
Crowdfunding reporters scan news these Crowdfunding PR campaign categories on daily basis looking for new and exciting Crowdfunding news stories to cover. The same is true for donors and investors that are looking for cool new Crowdfunding campaigns to invest. Post it for free so anyone and everyone on LinkedIn.com can find it.
To learn more about the Crowdfunding industry and startup local Crowdfunding community outreach programs, please join our free American Crowdfunding Center on LinkedIn.com or Meetup.com and don’t forget to follow us on Twitter.
Become a Crowdfunding Advocate by starting up a Crowdfunding Meetup in your city or town and promote Crowdfunding as a social and economic development finance tool.
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Please click here to help us Crowdfund this website’s editorial development
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- Fundly Promotes #Crowdfunding-for-Good Platform to Nonprofit Technology Conference in Minneapolis
- Leading Research Study Shows Crowdfunding Industry Soared at an Amazing 105% Growth Rate in 2012
- Crowdfunding & the JOBS Act: What Does This Mean For You?
- The Evolution of Crowdfunding
- National Radio Talk Show Invites Crowdfunding Pitches for the “Good Day Crowdfunding Show”
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Architects Turning to Crowdfunding to Save Stalled Real Estate Projects
6 FebCrowdfunding, the practice of investing in projects through the use of a crowd-supported web based fundraising campaign, shows significant promise for attracting investors to smaller real estate projects and getting them off the architect’s drawing board, according to a report issued today by the American Institute of Architects.
According to the white paper, “Crowdfunding Architecture,” the increasingly popular tool is being used to leverage dedicated internet fundraising websites to spur community support and financing for an assortment of infrastructure ventures that would ordinarily have difficulty finding money due to their smaller size.
The report, compiled for the AIA by massolution, inc., concludes that “donation-based crowdfunding” holds the most potential as a financing tool for beleaguered developers and architects. According to massolution’s May 2012 “Crowdfunding Industry Report,” the amount of money generated by crowdfunding was close to $1.5 billion in 2011, of which almost half was raised via donation-based crowdfunding.
That’s because the donation-based crowdfunding campaign model relies not on providing tangible returns for its success, but rather the enthusiasm of a local community for causes such as covering an individual’s medical expenses, political campaigns or community projects that would otherwise require municipality or government funding for completion, the report concludes.
For the architect, who is often the primary catalyst for new projects and construction, the crowdfunding concept holds special promise. Usually architects’ role in funding projects is limited. But crowdfunding increases the role of architects in the funding cycle by providing investment models and communications tools for a broad array of self-selected projects, from pedestrian bridges to urban skyscrapers, the report notes.
“Crowdfunding Architecture” details specific examples where crowdfunding has already had an impact in providing financial support for community projects that were too small to get started with traditional financing methods. Click here to download a database of AIA’s stalled projects.
CircleUp Explored: Crowdfunding Insight from Co-Founder, Rory Eakin
6 Febby Jonathan Sandlund, The Crowdfund Cafe
I had the pleasure to sit down with Rory Eakin, co-founder and COO of CircleUp. Rory gave a wealth of insight into the pioneering equity crowdfunding model him and his team have built to fund underserved companies in a targeted industry vertical (emerging growth consumer product and retail companies). I’ve distilled and summarized key themes below for convenience, but the full interview offers far more depth. So make sure to carve out 20 minutes to give it a view.
Currently only open to accredited investors (as legislation permits), CircleUp is a front-runner in the investment crowdfunding space. It’s one of a handful of platforms “crowdfunding” (personally defining as executing transactions entirely online) from accredited investors today; to date eight companies have raised a total of ~$7.5 million on CircleUp’s platform.
I’ve paid acute attention to CircleUp because (i) it has traction, i.e. data exists, and (ii) i’m a big believer in the merit its crowdfunding model is proving out. Broadly, it couples domain expertise and curated partnerships with technology to efficiently and transparently deliver high-quality, shepherded deal-flow to investors. It’s a model championed by many other platforms—e.g. RealtyMogul and Fundrise attacking real estate—and I have no doubt it will be applied to nearly many other industry verticals in time. It just makes tremendous sense; on so many levels.
Private Equity Fund Formation
3 Febby Scott W. Naidech, Chadbourne & Parke LLP
Private Equity Fund Formation by Scott W. Naidech, Chadbourne & Parke LLP
This white paper provides an overview of private equity fund formation. It covers general fund structure,fund economics, fundraising,fund closings and term, managing conflicts and certain US regulatory. It also examines the principal documents involved in forming a private equity fund.Private funds are investment vehicles formed by investment managers, known as sponsors, looking to raise capital to make multiple investments in a specified industry sector or geographic region.
Private funds are “blind pools” under which passive investors make a commitment to invest a set amount of capital over time, entrusting the fund’s sponsor to source, acquire, manage and divest the fund’s investments. The key economic incentives for sponsors of funds are management fees and a profit participation on the fund’s investments. The key economic incentive for investors is the opportunity to earn a high rate of return on their invested capital through access to a portfolio of investments sourced and managed by an investment team that is expert in the target sectors or geographies of the fund.
This document does not cover the new SEC guidelines governing Equity Crowdfunding, but it does give a 20-page summary of forming private equity funds.
Front Page PR offers SBA Free Crowdfunding Consulting Service
25 JanHelps Setup Training Programs to Teach Startups How to Raise Money on Crowdfunding Kickstarter, Indiegogo and RocketHub Sites
By Robert Hoskins, Front Page PR
Front Page PR announces a free Crowdfunding consulting service for any Small Business Administration (SBA) office nationwide that wants to learn how to start a Crowdfunding training program to teach local businesses how to raise money from people in the crowd who like their business ideas and want to donate money to help them get their business off the ground.
The SBA helps direct small businesses to 7(a) Loans, Short-term Microloans, Export Loans, Rural Business Loans and 504 Loans that offer small business financing, but in many cases, startups with no track record and few assets fail to qualify for bank loans.
Crowdfunding campaigns can serve as a very useful tool when small businesses have tried everything and have zero options left. Crowdfunding also serves as more than just a finance tool. It affords small business owners a chance to build a crowdfunding profile for their products /services to see if there is a real market demand instead of investing everything they have and hoping that it works.
Small towns are great places for Crowdfunding new businesses because everyone knows everyone. Once people fund a new business they like they can also help make it successful on a local basis because everyone has already indicated they want to buy its inventory.
One resource the firm offers SBA administrators is the Crowdfunding Press Center (https://crowdfundingpr.wordpress.com), which provides a repository of useful Crowdfunding news articles, case studies, research reports and white papers that local SBA advisors and counselors can read to increase their knowledge of Crowdfunding and learn how it can be leveraged to turn brilliant ideas into new businesses that create local jobs.
Once people have attended an SBA training program and have decided to launch a Crowdfunding campaign, Front Page PR offers a low-priced, two-hour Crowdfunding consulting service to teach new entrants how to leverage PR and social media to maximize their fundraising success for only $999.
Contact:
Robert Hoskins
Front Page PR
www.frontpagepr.com
East Coast: (512) 627-6622
West Coast: (602) 326-0940
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Front Page PR Rolls Out Crowdfunding PR Service for Crowdfunders Who Want to Launch Successful IndieGoGo, Kickstarter or RocketHub PR Campaigns; Opens Crowdfunding Press Center
15 JanCrowdfunding Services Advise Entrepreneurs, Small Businesses and Inventors on How to Prepare Profiles With SEO, Public Relations, Media Training, Media Relations and Social Networking in Mind
AUSTIN, TX–(Marketwire – Jan 15, 2013) – Front Page PR, the industry’s #1 crowdfunding PR firm, rolled out a new “Crowdfunding Press Center” (https://crowdfundingpr.wordpress.com) to help reporters, industry analysts as well as entrepreneurs, small businesses and accredited investors get acclimated to the new equity crowdfunding industry which is about to skyrocket in the United States.
Regardless of whether clients want to raise money successfully using donation-, lending-, perks-, rewards- or equity-based crowdfunding portals, Front Page PR can advise clients on how to build crowdfunding profiles, shoot introductory videos, provide attractive rewards and perks, schedule event and email marketing campaigns to boost the middle of the campaign lull as well as setup campaign fulfillment houses to ensure rapid crowdfunding campaign fulfillment after the deal is done.
“Beginning Crowdfunders usually have a limited marketing budget, which is one of the reasons they turn to Crowdfunding to help them raise enough money to pursue their dreams and bring their creative ideas to fruition,” said Robert Hoskins, Front Page PR’s Director of Media Relations. “Instead of paying $10,000 to $20,000 to hire a cost-prohibitive PR firm, our team of media professionals will share our expertise, PR templates, strategies, databases and media pitching secrets, which have generated more than $30 million worth of positive publicity for our clients over the past 20 years.”
Many people think that securing positive stories in the press necessitates a miracle, but in reality it is really just a simple process of understanding what the media needs to do their job. The media is always searching for a great story that teaches their readers something important.
The crowdfunding industry is expected to grow rapidly into a $300 billion investment industry. Front Page PR is currently seeking seasoned marketing professionals to fill PR, media relations, investor relations, social media networking and digital content management roles to help us scale to meet the skyrocketing market demand for professional crowdfunding marketing and PR experts. Forward resumes to the email below.
In addition, we provide white-labeled marketing programs for all crowdfunding portals that want to increase their platform client’s crowdfunding success rate.
# # #
Contact:
Robert Hoskins
Front Page PR
East Coast: (512) 627-6622
West Coast: (602) 326-0940
rhoskins[at]frontpagepr.com
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