Crowdfund Conference in Italy
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Crowdfund Conference in Italy

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  • Microventures, CircleupSoMoLend is debtAngel List – accredited investors
  • Chaos – examples of errors
  • Chaos – examples of errors
  • Registration & Incorporation in the U.S.Name, legal status, address, website, etc.2. Names of directors, officers, and 20%stockholders3. A description of the business and theanticipated business plan of the issuer4. Prior year tax returns5. Financial statements6. Description of intended use of raisedcapital & proceeds7. Target offering amount, deadline, andregular progress updates through the lifeof the offering8. Share price and methodology fordetermining the price9. Description of the ownership and capitalstructure of the issuer, including a lot ofdetail about the terms of the securitiesbeing sold10. Terms of any other outstanding securitiesof the company, including a summary
  • Microventures, CircleupSoMoLend is debtAngel List – accredited investors
  • Not all the requirements but not to be done over night.
  • When it comes to reward-based crowdfunding, while these don’t establish an equity price which can be considered a direct comparable, they serve a very important role in market validation of the execution and scalability of the business model.  Price points, customer traction, sales funnel, order fulfillment, and other critical information can be gleaned from a rewards-based campaign and incorporated in the next iteration of the product, or serve as validation of key business model assumptions.Since many valuations of pre-revenue startups rely on key performance indicators (KPI) and not on financial fundamentals, KPI validation is critical in building investor confidence and can indirectly impact valuations and funding(ESOP) where stock options are issued to early employees and investors with very low exercise prices, which are set to equal the price of common stock at the time the options are issued.  The equity prices flowing through crowdfunding platforms will create a new set of early stage valuation comparables, data that have largely been missing from the public eye before.  This can potentially have huge implications on the pricing of ESOP plans, particularly in the early stages.Read more at http://venturebeat.com/2013/10/08/crowdfunding-101-dont-forget-to-protect-your-idea/#SYYEMlRC8xvTg4s5.99Read more at http://venturebeat.com/2013/10/08/crowdfunding-101-dont-forget-to-protect-your-idea/#SYYEMlRC8xvTg4s5.99When it comes to reward-based crowdfunding, while these don’t establish an equity price which can be considered a direct comparable, they serve a very important role in market validation of the execution and scalability of the business model.  Price points, customer traction, sales funnel, order fulfillment, and other critical information can be gleaned from a rewards-based campaign and incorporated in the next iteration of the product, or serve as validation of key business model assumptions.Since many valuations of pre-revenue startups rely on key performance indicators (KPI) and not on financial fundamentals, KPI validation is critical in building investor confidence and can indirectly impact valuations and funding.Read more at http://venturebeat.com/2013/10/08/crowdfunding-101-dont-forget-to-protect-your-idea/#SYYEMlRC8xvTg4s5.99
  • Pebble Watch campaign was an outlier
  • DNA Zoo Tees. Funding used to fulfill orders and “ramp up production” Infringed on songs.

Crowdfund Conference in Italy Crowdfund Conference in Italy Presentation Transcript

  • Mary Juetten, Founder & CEO Feb 6, 2014 Impact Hub Trieste, Italy EQUITY V. REWARDS BASED: UPDATE US RULE MAKING "TRAKLIGHT", "ID YOUR IP", "IP VAULT", and "IP CLOUD" are registered trademarks of The PIP Vault, LLC. © MMXIII The PIP Vault, LLC. All Rights Reserved.
  • L Crowdfunding Overview REWARDS BASED: Indiegogo, Kickstarter, Rocket Hub EQUITY BASED: Federal not yet legal; some intrastate Georgia, Michigan OTHER: Angel List, Lending Club, Prosper, MicroVentures
  • Equity/Debt Status Equity/Security is not yet Legal (Title III) Rule comment period ended Feb 3rd, 2014 Intrastate live in several states
  • RULES: 585 PAGES
  • 295 Questions
  • 10 Requirements JOBS Act 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Registration & Incorporation in US Names – Directors, Officers, >20% SH Business Description & BUSINESS PLAN Prior years Tax Returns Financial Statements Use of Proceeds Offering Details & Progress Updates Share price & methodology (VALUATION) Ownership & capital Capital (existing, offering & differences)
  • Rules – FORM C Disclosure 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Registration & Incorporation in US Names – Directors, Officers, >20% SH Business Description ONLY Prior years Tax Returns Financial Statements ONGOING & ANNUAL REPORTS Use of Proceeds Offering Details & Progress Updates Share price & methodology (VALUATION) Ownership & capital Capital (existing, offering & differences)
  • GAAP Financial Statements < $100K – CEO  $100K to < $500K Review  $500K = AUDIT by non-PCAOB but licensed Certified Professional Accountant (CPA) Firm Not the same CPA as preparations!
  • EQUITY is not Easy Tough requirements include: Business Plans Financial Statements Use of Proceeds Valuation
  • $ Devil in the Details $XM Valuation/ $X per share price/ Total $XK Spend: $XK Now $XK Next $XK Then MAKE $XK $XK $XK SELL $YK $YK $YK OPERATE $ZK $ZK $ZK
  • Valuation Issues Recent Venture Beat article: - Employee Stock Options - Key Performance Indicators (KPIs)
  • CROWDFUNDING APPROACH IDENTIFY IP PROTECT IP PICK A PLATFORM BUILD SOCIAL CAPITAL CREATE A PITCH
  • CROWDFUNDING APPROACH IDENTIFY IP PROTECT IP PICK A PLATFORM BUILD SOCIAL CAPITAL CREATE A PITCH
  • Rewards Based CHOOSE THE BEST PLATFORM FOR YOU: • ALL OR NOTHING • % BASED ON TYPE • BE REALISTIC
  • CREATE PITCH CAMPAIGN Rewards: Campaign Equity: Business Plan Projections Valuation `
  • Infringement!
  • Education is KEY INVESTORS ISSUERS INTERMEDIARIES
  • Questions? IDENTIFY. PROTECT. SUCCEED. www.traklight.com Mary Juetten mejuetten@traklight.com @traklight