Advertisements
Tag Archives: Texas Incubators

Front Page PR Seeks Startups at Texas Incubators Accelerators that Would Like to Try a New Method of Raising Seed Investment Capital via Texas Equity Crowdfunding Sites

23 Feb

Equity crowdfunding campaigns have the ability to help entrepreneurs raise enough seed capital to pay for a co-working space and put together marketing and business development plans to gain market traction

By Robert Hoskins

Austin, Texas – Front Page PR, in tandem with the Texas Crowdfunding Network, is now offering entrepreneurs, startups and businesses in Texas the opportunity to learn how to use top Texas crowdfunding sites to raise enough seed investment capital to get their companies up and running. Anyone interested in a free 30-minute crowdfunding consulting session to learn more about crowdfunding should call Robert Hoskins at (512) 627-6622 or send a tweet to @Crowdfunding_PR.

Front Page PR Helps Startups and Small  Businesses  Plan Successful Texas Equity Crowdfunding Campaigns

Front Page PR Helps Startups and Small Businesses Plan Successful Texas Equity Crowdfunding Campaigns

“Various Texas incubators and accelerators offer attractive deals that promise to provide $50,000 of matching funds and another $50,000 from venture capital partners for any company as long as they can bring their own $50,000 to the table,” said Robert Hoskins, the Texas Crowdfunding Network’s Executive Director. “The problem is that most startups are bootstrapping their companies and do not have enough money to qualify for these types of expensive cash-up-front accelerator programs.”

“Even though incubators/accelerators have the best intentions of helping startups,” Hoskins added. “There are simply too many startups and not enough seed investment capital to go around. According to a leading Austin Accelerator Research Report even the top Texas accelerators rarely invest more than a total of $150,000 per year in startups. At $50k per deal that means only enough funding for three companies per year.”

Recognizing this widespread problem, the Texas State Securities Board created a new source of alternative financing calledEquity Crowdfundingthat provides businesses, including Texas incubators and accelerators, with a new way to raise enough seed investment capital to fund more companies, create more jobs and stimulate more economic development in Texas.

Equity crowdfunding sites now allow businesses to build an online business pitch called a “crowdfunding profile,” which can be viewed by prospective investors 24-hours-a-day, 7-days-a-week. Investors that like deals they find can purchase equity shares via online Texas crowdfunding sites in a similar manner to how Kickstarter and IndieGoGo or ecommerce sites work.

It is completely free to build a crowdfunding profile. And spending as little as $5,000 to $20,000 to produce the necessary pitch deck/video, disclosure documentation and targeted marketing campaigns to drive investors to crowdfunding profiles makes it possible for any Texas business raise up to $1,000,000 of seed investment capital per year.

Every adult in Texas can now invest up to $5,000 per year in equity investment deals they like. At $5,000 each, a small business only needs 200 investors to raise up to $1 million per year. Marketing campaigns with an average 3% response rate have the potential to drive up to 600,000 Texas investors to a company’s crowdfunding profile. And then, it only takes a very small conversion rate of those investors investing anywhere from $500 to $5,000 each to reach the desired crowdfunding goal.

When trying to raise seed capital most angel investors like to see some sort of traction in the marketplace. Smart companies will only try to raise enough money to deliver a finished product/service that can be sold as well as some marketing programs to begin customer acquisition.

After a successful first round, companies that spend their money wisely and build a solid customer base will be able to raise larger secondary and tertiary rounds as they gain momentum in the marketplace.

“Raising multiple rounds of funding to stair step their way into a successful business model is a good strategy to develop a loyal base of customers and crowdfunding investors,” Hoskins commented. “It is also a great way catch the eye of angel investors and venture capitalists who will be watching Texas Crowdfunding sites for rising stars that are still at an early stage, but growing quickly.”

Front Page PR has a 25-year track record of helping small startups launch their businesses and begin rolling out their products and services to local, regional, national and global markets. Using integrated marketing campaigns that harness the power of targeted content marketing, email marketing, PR and social media, Front Page PR can help any small business build a loyal customer base and begin preparing for a successful equity crowdfunding campaign. Front Page PR offers up to a 50% discount on various marketing services for qualified members of Texas-based co-working spaces, incubators and accelerator programs.

If your business would like to learn more about the Texas Equity Crowdfunding industry, please join our free Texas Crowdfunding Network Meetup Group or visit our Texas Equity Crowdfunding Blog to read more about how to setup a Texas Crowdfunding Portal or Issue a Texas Equity Crowdfunding Offering. We can also help setup Equity Crowdfunding Community Outreach Programs and Crowdfunding Training Programs to educate members of chambers of commerce, SBDC offices, economic development councils and large business associations on how to capitalize on equity crowdfunding to fund startups that need access to seed investment capital. 

# # #

Contact:
Robert Hoskins

Front Page PR
(512) 627-6622
@Crowdfunding_PR
www.linkedin.com/in/roberthoskins

Advertisements

Texas Crowdfunding Rules Pass Unanimously 4-0 in Austin; Texas Becomes Largest Equity Crowdfunding Market in the United States

22 Oct

More than 20 million unaccredited investors in Texas will soon be able to invest $5,000 per year in equity investments for small businesses raising under $1 million

By Robert Hoskins

Austin, Texas – Texas, the 2nd largest state by population in America, formally approved an  Intrastate Texas Crowdfunding Exemption Rule, on October 22, 2014, in Austin, Texas with a resounding 4-0 unanimous vote.  Why? Texas has been an economic engine because our state government officials have always understood how to provide an environment where businesses can make money, even during tough economic times.

Texas Approves Equity Crowdfunding Exemption for Non-Accredited Investors

Texas Approves Intrastate Equity Crowdfunding Exemption for Non-Accredited Investors in Texas

Even though the Texas State Securities Board doesn’t like tout this fact, Texas has around 26 to 29 million people living here, with around 20 million residents over the age of 18. The fact that the new Texas Equity Crowdfunding Rule allows these people to invest up to $5,000 per year in private equity investments is significant.

Do the math. What is 20 million times $5,000? To keep it simple, we’ll do the math for you, but we’ll be honest and let you know the number was too big our Smartphone’s calculator.  We had to break out an Excel spreadsheet to make sure this figure was correct.

The pool of potential investment capital that will be available in November 2014 to start new businesses or expand existing ones will be around $100 billion per year.  So over the next 5 years, Texas has pretty much said to the rest of America, we love business so much we have put together an economic development slush fund of $500 billion.

And guess what? It won’t cost taxpayers a single cent. Even better is the amount of small businesses that entrepreneurs will be able to launch during that time frame.

And guess what? It won’t be Wall Street investment bankers that will be controlling or driving the growth of Texas. It will be hard-working ranch hands, oil & gas field workers and blue-collar construction laborers who  understand what the value of a hard-earned dollar is and who will certainly be able to decide what types of products and services they want to see brought to market.

Why is this important?  Ft. Worth is booming. Dallas survived a telecom meltdown. Houston has never been short on energy. Austin is a technology mecca second only to Silicon Valley in California. What do you think $500 billion worth of investment capital will do the Texas economy?

It won’t happen over night, but neither did the oil boom. It was one thing to drill for oil and find it. It was another for the country to figure out what to do with oil and a wasteful substance called gasoline that no one knew what to do with because it was so volatile. But when Henry Ford won the right mass produce affordable Model T’s, Texas benefited from its early risk taking and bold move to start exploring and drilling for oil.

Did a lot of people drill wells that were dry where investors lost a lot of money? Yep. But the industry adjusted quickly on the fly and learned how to harness engineering, technology and sheer will power to weed out bad investments.

The same will be true of Equity Crowdfunding.  The power of the crowd to perform due diligence and the need for all equity investments to be done through a registered crowdfunding platform or portal will make it very hard for the Wolf of Wall Street types to do business. It won’t take the industry long to populate itself with crowdfunding classes, investment training programs and crowd checking services that investors can use to educate themselves and learn quickly how to vet deals.

What kind of deals can Texans expect? Franchises, high-technology, bio technology, clean technology, financial technology, real estate, oil and gas, defense technology, space exploration technology, etc.

Will people always make money? No, but deals like Oculus Rift might become common place.  In 2012, Oculus needed to raise money to bring a new type of 3D virtual reality computer gaming goggles to market. They did so successfully by raising $2.4 million via a Kickstarter campaign by pre-selling goggles for $300 a pair.

In May 2014, Facebook bought Oculus for $2 billion. There was an immediate uproar from Oculus supporters because they didn’t benefit from the buyout because supporters didn’t own any private equity stock.  It was a true crowdfunding dream come true. News stories say that a $300 investment for a pair of 3D goggles and one equity share would have paid return on investment of ~$45,000, but after two years of waiting equity investing is still not legal in the United States for unaccredited investors.

Who was to blame for supporters getting screwed? The bullseye can be pointed nowhere else but squarely on the Securities Exchange Commission (SEC), who has been holding America hostage during one of the biggest economic depressions America has ever seen.

The SEC can defy the President of United States and both Houses of Congress, but they are no match for hardworking Americans who are tired of watching the government run our country into the ground.

Honestly, can American’s skip four games of golf or quit buying scratch off lotto tickets for a month to take a wild risk on a crowdfunding investment? We sure can. And with some careful consideration, due diligence and investing in only products/service we understand, a new generation of micro venture capitalists will rise.

Why go to Las Vegas or continue to buy lotto tickets when you can shop for cool products and businesses online that you’d be willing to bet a couple of hundred bucks in order to make a fortune?  Suddenly the American dream will become a reality again.

Maybe not in the rest of America, but in Texas, entrepreneurs and startups will be able to go straight to the public with their investor decks and business plans. Just as Texas oil money, real estate and telecom/computer technology had a heavy influence in the development of the United States, so will the influence of crowdfunded millionaires that are sure follow the same rise to power as risky, gutsy Texas-based entrepreneurs such as Mark Cuban and Michael Dell.

# # #

 Texas Equity Crowdfunding Exemption:

Passed 10/22/2014 – Texas State Securities Boards Approves Texas Crowdfunding Exemption Rules

Texas Crowdfunding News:

10/25/14 – Ft. Worth Star Telegram – Texas sets the stage for crowdfunding

10/23/14 – Austin Business Journal – State Securities Board OKs new Texas crowdfunding rules

10/23/14 – San Antonio Business Journal – Texas greenlights new rules for equity-based crowdfunding

10/23/14 – Silicon Hills – Texas Approves Equity-Based Crowdfunding Rules

10/23/14 – Dallas Morning News – Texas OKs rules allowing small businesses to raise funds online

09/23/14 – San Antonio Express News – Texas Crowdfunding for the little guys

09/16/14 – Times Realty News – Texas Crowdfunding Investments Set for Vote in September

08/12/14 – Ft. Worth Star Telegram – Texas set to allow crowdfunding investments for small businesses

08/27/14 – Houston Chronicle – Texas crowdfunding conference hopes to draw a crowd

07/21/14 – Crowdfunding PR News – Front Page PR Offers Texas Crowdfunding Sites Advertising, PR and Social Media Marketing Campaigns to Market Equity Shares to Potential Investors

List of States with Intrastate Exemption for Equity Crowdfunding:

         State                          Population

  1. Texas                           26,059,203
  2. Michigan                       9,883,360
  3. Georgia                           9,919,945
  4. Washington                   6,897,012
  5. Indiana                           6,537,334
  6. Tennessee                      6,495,978
  7. Maryland                       5,884,563
  8. Wisconsin                      5,726,398
  9. Alabama                         4,822,023
  10. Idaho                                1,595,728
  11. Kansas                             2,885,905
  12. Maine                                1,329,192

If you were a new company planning to launch a business, what state would you pick?

%d bloggers like this: