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Crowdfunding Update for VVREO - JOBS Act; Lessons Learned Crowdfunding Campaigns.

Crowdfunding Update for VVREO - JOBS Act; Lessons Learned Crowdfunding Campaigns.

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  • Chaos – examples of errors
  • Chaos – examples of errors
  • Microventures, CircleupSoMoLend is debtAngel List – accredited investors
  • 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
  • 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
  • Not all the requirements but not to be done over night.
  • +DNA Zoo Tees. Funding used to fulfill orders and “ramp up production” – Weak request – no emotional+No Social Media engagement+No pre-work – GO!G3Researched Platform:Social Capital Planning and preparation beforehand. Spending a lot of time at the beginning of the campaign and throughout it making individual/personal connections with people   Having a strong presence on social media – FB Campaign for 500 likes BEFORE started campaign Educated followers on Indiegogo BEFORE campaign friends/networks to post to their social media pages PitchVideo – Team members were featured – know who you’re supportingSocial capitalHeavy on Facebook and TwitterNetworkshoutout & support $5000 corporate donation within the first weekintroductions to local reporters in order to get the word out through the news and print materials Promotedhastags, Links BEFOREEDUCATED followers on what crowdfunding/Indiegogo was beforeRequested ideas/suggestions on rewardsCampaign updates 1/weekIndiegogoRespond to Indiegogo comments, FB, TwitterPhotosSet weekly goals to encourage more supportRewards$25 – SM Thank you!, Mother’s Day Shout Out$50 – Access to photo journey$100 Handmade keychain from Kenya$250 Personal thank you from someone benefiting from clinic$500 Printed photo book$1,000 Plaque in clinic & dinner with team$5,000 – Co logo printed in clinicSeasonal PromotionMake Donation for Mother’s Day – Social Media Shout OutsFeatured on Indiegogo’s Blog 2 days Mother’s DaySurpassed goal of $17,650 and ended with $20,175Mother’s Day campaign allowed them to make an emotional connection with audienceEnjoy your day tomorrow and now that there are Kenyan women who will have hope because of this clinic.make your mom feel special while at the same time working to ensure that another mother in Kenya can have a safe Mother's Day.Increased social media presence and connections; donors, media contacts, networkProvided opportunity for donations beyond campaign – reason to follow – supported campaign and emotional connections
  • Ask Audience what IP for each Case.Maria’s restaurant example - Have the name, working on the signage and everything, do not use yet but want to save money and wait to file until in use (means offered for sale) BUT someone else files – they win – explain Common Law TM but you do not have because not offered (explain Breanna’s pool concept – know your rights). Trade secrets need to be protected – process or recipes – have employees sign off and mention trade secrets specifically – also trade secret is different every state but need to take reasonable steps to protect something of value.Inventor – Phillip with Smart Focus, the need to document in proper inventors’ notebook and file patents but WAIT you infringed on a TM, any funding presentation, competition (crowdfunding will end up with a huge issue because Enabling Public Disclosure – all 3 are needed. Make sure all inventors’ listed – remember that if listed do NOT have to consult with you. Example from PGCC where the first guy said he did not have IP protection and was there seeking help and the second guy left an important piece at home.Website – copyright every 3 months for blog, careful re copyright taking others’ photos – just because no C does not mean that not still copyright issue. Also if you have videos done, make sure you have the copyright.Software created by outsiders – if they violate copyright and put into your code, can be a problem if not shown (open source read the T&Cs regardless). Need to have all IP assigned. Have business attorney check documents.DO NOT FORGET ABOUT managing IP – need to look for dates, renewals, maintenance fees etc.
  • Infringement is real issues

Traklight slides VVREO Traklight slides VVREO Presentation Transcript

  • Mary Juetten, Founder & CEO Jill HowardAllen, COO Feb 21, 2014 VVREO "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 (JOBS Act): Debt or Security OTHER: Angel List, Lending Club, Prosper, MicroVentures
  • RULES: 585 PAGES
  • 295 Questions
  • Equity/Debt Status Equity/Security is not yet Legal (Title III) Rule comment period ended Feb 3rd, 2014 Intrastate live in several states
  • 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!
  • $ 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)
  • EQUITY is not Easy Requirements include: Business Plan Financial Statements Background Checks Valuation
  • CROWDFUNDING APPROACH IDENTIFY IP PROTECT IP PICK A PLATFORM BUILD SOCIAL CAPITAL CREATE A PITCH
  • Case Study: Lessons Learned
  • What they do. • • Genetic Art – Ts – Portraits Channels – Obsessed pet owner – Animal organizations • Convert Steel shipping containers into medical clinics • Cooling/Heating installed • Most of medical equipment needs/electric and sink • Durable • Quickly Installed
  • A Tale of Two Campaigns 2
  • Seriously?... Try again? • • • • Lessons learned New plan of action New cause New business opportunity
  • The new plan. • Pre-Selling • HEAVY PR – Social Presence – Local media • • • • Partnering Get it in writing New rewards structure SCHEDULE
  • Results?!
  • STEP 5: CREATE PITCH ONLINE ` Campaign Business Plan Projections
  • Ignorance is NOT a Defense Be Careful: Video Copy Business Plans
  • READ READ READ Read License & Permission to Use Check out CreativeCommons.org
  • Questions? IDENTIFY. PROTECT. SUCCEED. www.traklight.com TAKE OUR FREE RISK QUIZ USE CODE THANK YOU FOR FREE ID YOUR IP REPORT Mary Juetten Jill HowardAllen mejuetten@traklight.com jhowardallen@traklight.com @traklight @traklight