Preparing issuers for equity based crowdfunding 42513

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The “Preparing Issuers for equity-based Crowdfunding” presentation provides comprehensive information on the various types of crowdfunding available, an overview of the latest legislative …

The “Preparing Issuers for equity-based Crowdfunding” presentation provides comprehensive information on the various types of crowdfunding available, an overview of the latest legislative developments, steps to hit the ground running once the legislation is implemented, information on protecting intellectual property while reaching the masses via crowdfunding, and what due diligence materials are needed in accordance with the federal crowdfunding legislation. This is ideal for any company seeking to raise capital via the imminent crowdfund exemption as well as any professional guiding new crowdfund issuers such as investment bankers, investor-relations professionals, brokers, emerging portals, CPAs and attorneys. The complete webinar can also be viewed at: https://www.brighttalk.com/webcast/9407/72505

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  • 1. NowStreet’s Capitalizing on Financial Innovation Webinar SeriesPreparing Issuers for equity-based CrowdfundingApril 25th 1pm to 2pm ESTRewards-based vs. Equity-based Crowdfunding – which is right for your business?Protect your IP when CrowdfundingGet compliant for equity CrowdfundingThe “Preparing Issuers for equity-based Crowdfunding” webinar is ideal for anycompany seeking to raise capital via the imminent crowdfund exemption as well as anyprofessional guiding new crowdfund issuers such as investment bankers, investor-relations professionals, brokers, emerging portals, CPAs and attorneys.Moderator: Dara Albright, Founder, NowStreet – Panelists: * Liz Kulik, CEO and co-founder of donation-and equity-based crowdfunding incubator ProHatch; *Mary Juetten, Founder of Traklight; *Ruth Hedges,CEO of Funding Roadmap
  • 2. Dara Albright, Founder of NowStreetTwitter: @nowstreetwww.nowstreetjournal.comdalbright@nowstreetjournal.comhttp://facebook.com/nowstreetevents
  • 3. Liz Kulik, CEO and co-founder of donation- and equity-basedcrowdfunding incubator ProHatch, will provide:•Key differences between equity and other forms of crowdfunding,•An overview of the latest developments in equity crowdfunding,•Tips for ways issuers can begin preparing for their crowdfundingcampaigns,•Concrete steps to ensure issuers are ready to hit the groundrunning once equity crowdfunding goes live
  • 4. The ChallengeSocial impact, business and communityentrepreneurs struggle to find access to capital.The SolutionCrowdfunding is people to people capitalpowered by socially networked broadcasting.
  • 5. MarketPotentialUS$300BillionGlobal$1Trillion% Growth/Year$ Growth/Year (millions)Segments$1,47061%72%115%91%274%Source data from Crowdsourcing.org / Massoultions, Halo Report and National Venture Capital Association• 40+% of the projects posted on crowdfundingsites get funded• 2.84 weeks on average to raise first 25% offunding goal. 3.18 weeks on average to raiselast 25% of funding goalExperts Predict $300 Billion market in the USin donation, reward, equity & lending
  • 6. Does a Crowdfunding Strategy Fit?Non-financial rewards are offeredin exchange for a contribution.Returns are experiential & excitingfrom thank you notes to pre-sell offirst run production or a cameo roleDONATIONNon-Financial ReturnsTax deductible contributions to501(c)(3) organizations, All otherbusiness & personal projectcontributions from personal fundersare taxable income to the fundedentity, Returns are intangibleSubject to pending SEC regulation, thegeneral public (accredited and non-accredited) can invest in thesecurities of small businesses andstartups qualified to list on registeredBD/Portals, w/a variety of economicreturn strategies including stock sales,refinancing exits, dividends &customer-owner discountsMicro-finance, peer to peer, local banklending models prevail, withconditions for application based oncommercial or impact lending thatrange from a structured pay-backw/and w/o interest over time.REWARDSNon-Financial ReturnsEQUITYFinancial ReturnsLENDINGFinancial Returns
  • 7. Title 1Reopening US CapitalMarkets to EmergingGrowth CompaniesIPO on-ramp for private cos. w/<$1b revenue, 2 yrs financials,exempt from Dodd-Frank & financial controls audit requirements,decreased Sarbanes/Oxley compliance requirementsTitle IIAccess to Capital for JobCreatorsLifts Reg. D/Rule 505 & 144A ban on general solicitation andadvertising, allows internet access to accredited investorsTitle III CrowdfundingRegistration exemption for start-ups and small companies raisingup to $1m/year/entityTitle IVSmall Company CapitalFormationIncreases the amount of capital that can be raised under a Reg Aexemption from $5m to $50mTitle VPrivate CompanyFlexibility & GrowthMandatory threshold for private co registration raised from 500shareholders to 2,000, as long as less than 500 are non-accreditedTitle VI Capital ExpansionRaises the holders of record numbers required for SECregistration of non-listed bank or bank holding companies from500 to 2,000 and lowers the number of holders of recordrequired for deregistration from 300 to 1,200Pioneering JOBS Act Legislation
  • 8. INVESTORSLimited in the amount he or she may invest in the crowdfunding securities in any12-month period:• If either the annual income or the net worth of the investor is less than$100,000, the investor is limited to the greater of $2,000 or 5% of hisor her annual income or net worth.• If the annual income or net worth of the investor is $100,000 or more,the investor is limited to 10% of his or her annual income or net worth,to a maximum of $100,000.ISSUERSThe aggregate amount sold to “all investors”, may not exceed $1 million in any12-month period. Transactions made through a broker dealer, or through a“funding portal” (a new designation under the Securities Exchange Act of 1934)which meets SEC requirements. Issuers must comply with the disclosure andother requirements that will be fully clarified when rules are promulgated by theSEC and FINRA.Title III Crowdfunding
  • 9. “Must Haves” Company must be registered and incorporated in the US Names of the Directors, Officers, and any Shareholder with more than 20%ownership Business description and anticipated business plan Financial statements with varying levels of attestation depending on theamount of capital being raised;• $100,000 or less, tax returns and financial statements certifiedby principal executive officer• $100-500,000, reviewed financial statements• $500,000 or more, audited financial statements Goal for capital raise and target dates Planned uses of capital raised Share price and methodology for determining share prices Detailed information on ownership and capital structure, including terms forthe shares being offered under crowdfunding Terms of any other outstanding shares and the differences between thoseoutstanding and those being offered Progress reporting required
  • 10. • Enterprise Model & Implementation Plan• Entity structure (corporate, 501c3)o Legalo Accounting• IP / online exposure• Future funding and exit strategies• Disclosure, Documentation and Due Diligence• Brand value• Social marketing commitment• Content/Story/Digital production• Follow through (fulfillment, reporting, funder communication)Consider the Impact of Crowdsourced Capital
  • 11. Prepare for Equity• Equity, following JOBS Act rules is expected in Q3/2013 tocomplete the Crowdfunding donation/reward/equity/lendingcapital ladder.• Equity issuers have time to strengthen offerings and valuation,develop campaign strategies, and increase networks.• In the meantime, Rewards based campaigning is an immediateoption that provides capital loyal customers, brand awareness,media attention, market testing, etc. directly with consumers,and without sacrificing ownership.
  • 12. Thank you for participating in the webinar. To listen to a replayplease visit: https://www.brighttalk.com/webcast/9407/72505We also hope to meet you in person at the 2nd Annual CrowdfundingConvention & Bootcampwww.crowdfundingroadmap.com/bootcampSave $25 use the coupon code: nowstreet