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Title 3 Overview
Crack the Crowd

1387 E. 3010 S.
Salt Lake City, UT
Speaker
Dan Baird
“Never doubt that a small group of thoughtful,
committed citizens can change the world; indeed, it's
the only thing that e...
Dan BairD
!
" dan@crackthecrowd.com
LinkedIn.com/danbaird
twitter.com/whistln
#
Crack the Crowd was founded to address an ...
' !info@CrackTheCrowd.com
CrowdFunding Consulting
Get access to experts in strategic innovation, branding, human-oriented
...
(
' !info@CrackTheCrowd.com
“Crowdfunding” 5
“Crowdfunding is a method of financial
intermediation, enabling efficiency in...
(
' !info@CrackTheCrowd.com
Regional Share 2014 6
$3.2
Billion
LendInvest, UK RE in
the UK,($240m)
$9.4
Billion
145% Growt...
' !info@CrackTheCrowd.com
7
The Global Aggregate-
.
~270,000 Jobs
Fundable
-
$96 Billion
by 2025
World Bank 2013
$200B
$6....
' !info@CrackTheCrowd.com
Title 3
ETA: January
Title 4 / Reg A+
Bankroll & Many Others ()
8
The Regulatory Rollout(
/
0
$
...
' !info@CrackTheCrowd.com
Better deal economics
Solicitation + Marketing & PR
Transparent = Higher Returns
Streamline Onli...
' !info@CrackTheCrowd.com
10
Intrastate3
4
5
+
6
majority exclude and may include RE
Holding / Development Companies
“Inve...
' !info@CrackTheCrowd.com
11
Reg A+ The Mini IPO(
1
2
Tier 1
-$20MM Max
-Any Investor @ 10% of Income
-No Audits
-Blue Sky...
' !info@CrackTheCrowd.com
12
Title 3…What Matters?(
• Attention to Business Model Viability
• Max of $1 MM p/year > $5MM
•...
' !info@CrackTheCrowd.com
13
Title 3 - Company(
Musts
•U.S.-based
•No disqualificaoon under Regulaoon Crowdfunding
•No comp...
' !info@CrackTheCrowd.com
14
Title 3 - Investor(
Individual investors may, over a 12-month period, can invest in the aggre...
' !info@CrackTheCrowd.com
15
Title 3 - Platforms(
•Must register with the commission & become a member of a naoonal securi...
' !info@CrackTheCrowd.com
16
Example Campaign Rollout2
/0 1 1 7 8
Hire an accounong firm and
securioes lawyer to prepare
fin...
' !info@CrackTheCrowd.com
2015
17
Predictions9
: ; < =
Real estate crowdfunding expands
to over $2.5B, a 250% increase ove...
' !info@CrackTheCrowd.com
???
18
9
<>=
Multi-family and rehab offerings,
again largely in the US, will see
moderate growth...
(
' !info@CrackTheCrowd.com
Paths to Market
19
Single Issuer ButtonBuild White Label
(
' !info@CrackTheCrowd.com
Platform 20
' !info@CrackTheCrowd.com
21
What They’re Saying(
“Crack the Crowd has produced some of the best crowdfunding strategy I’v...
' !info@CrackTheCrowd.com
22
Our Partners In Crowdfunding4
Our network has unrivaled access to crowdfunding’s best, which ...
' !info@CrackTheCrowd.com
23
Our Guiding Process: Lean &Strategic(
We’ll take full inventory of your existing tools to
avo...
' !info@CrackTheCrowd.com
24
Integrated Marketing & CRM Configuration(
4 Conversion is critical, so our practical executio...
' !info@CrackTheCrowd.com
25
White-Label & BRANDED Content+
There is no berer R.O.I. for a plaqorm than kickstarong a high...
' !info@CrackTheCrowd.com
26
Case Study?
During the briefing phase it was apparent that this was a
special project that wou...
(
' !info@CrackTheCrowd.com
Campaign A La Carte Services 27
5
+
4
2
@
A
Our team has launched millions of dollars worth of...
' !info@CrackTheCrowd.com
28
Marketing Strategies & Plans(
Awareness
Consideration
Preference
Purchase
Partner / Re-up
Ema...
' !info@CrackTheCrowd.com
Content and social media
planning over 5 sessions
Six Month Strategy
29
Unknown to Influencer
Si...
"
1387 E 3010 S Salt Lake City, UT
+1 (801) 316 - 3564
! '# E info@CrackTheCrowd.com/CracktheCrowd@crackthecrowd/CracktheC...
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Crack the Crowd, Title 3 Crowdfunding & JOBS Act Overview

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An overview of crowdfunding, the JOBS act, Title II and Title III. What this latest legislation means, and how small businesses can use it to raise capital.

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Crack the Crowd, Title 3 Crowdfunding & JOBS Act Overview

  1. 1. Title 3 Overview Crack the Crowd
 1387 E. 3010 S. Salt Lake City, UT Speaker Dan Baird
  2. 2. “Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it's the only thing that ever has.” - Margaret Mead
  3. 3. Dan BairD ! " dan@crackthecrowd.com LinkedIn.com/danbaird twitter.com/whistln # Crack the Crowd was founded to address an all-too-common problem: business owners found themselves spending thousands of dollars hiring consultants or managers without crowdfunding experience, who despite good efforts, made avoidable mistakes. For that reason, I created an agency specifically tailored to crowdfunding. With our services, tools, and practical execution plans, we can maximize your team’s productivity without losing your authenticity. We’re here to highlight your expertise, streamline your operation, and impart the insights on crowdfunding and launching new ventures. We’re excited to be a part of your success. - Dan Baird, CEO
  4. 4. ' !info@CrackTheCrowd.com CrowdFunding Consulting Get access to experts in strategic innovation, branding, human-oriented design, and of course, crowd-engagement. Our team has collaborated on dozens of white-label equity, real estate, and reward platforms; we can help you launch your platform, put it in the spotlight, and ensure you will be able to scale, grow, and succeed. Platform Strategies $ • Branding • Quick launch Guides • White Label Materials • UX Testing Portal Creative % • Marketing Automation • Social Media • SEO & PPC Campaigns • Email Marketing Ads & Promotion • Launch Coordination • Marketing Automation • CRM Management • Sales Consulting Growth &
  5. 5. ( ' !info@CrackTheCrowd.com “Crowdfunding” 5 “Crowdfunding is a method of financial intermediation, enabling efficiency in the identification, participation and funding of investment opportunities” “The use of small amounts of capital from a large number of individuals to finance a new business venture.” Crowdfunding has the potential to increase entrepreneurship by expanding the pool of investors from whom funds can be raised beyond the traditional circle of owners, relatives and venture capitalists. ) * $ GoFundMe.com Donations Kickstarter / Indiegogo Rewards & Product Validation Social capital > Marketing Word of Mouth Marketing + Prosper, Lending Club Peer-to-Peer Lending ⋆ Realty Mogul, Patch of Land, Carlton, CBRE Equity / Debt (
  6. 6. ( ' !info@CrackTheCrowd.com Regional Share 2014 6 $3.2 Billion LendInvest, UK RE in the UK,($240m) $9.4 Billion 145% Growth $3.4 BillioN 320% GrowthEU N. America Asia
  7. 7. ' !info@CrackTheCrowd.com 7 The Global Aggregate- . ~270,000 Jobs Fundable - $96 Billion by 2025 World Bank 2013 $200B $6.1 - $16 - $34.4 North America retains first place Lending: $11B $0B $1.75B $3.5B $5.25B $7B Art Publishing M usic & RecordingScience & Tech Property Film & Perform ing ArtsSocialCauses Business/ Entre 2013 2014 Source economist / Massolution
  8. 8. ' !info@CrackTheCrowd.com Title 3 ETA: January Title 4 / Reg A+ Bankroll & Many Others () 8 The Regulatory Rollout( / 0 $ 1 Revenue equivalent crowdfunding No Guarantees Mini IPO Seed (vs Angel) Round Investor Limits No Funds Test the Waters (Then only go Tier II) Unlimited Raises Limited Population Psychological Friction to Invest General Solicitation & Advertising Rules in Rule 506 & 144A SPV’s for CF on Cap Table REAL Crowdfunding $5MM Limit Investor Limits 100K No Funds Test the Waters Title 2 Angel List, Gust, Patch of Land Carlton Group Perks / Donations / Pre Sales Kickstarter, Indiegogo, gofundme
  9. 9. ' !info@CrackTheCrowd.com Better deal economics Solicitation + Marketing & PR Transparent = Higher Returns Streamline Online 24/7 Fundraising STRENGTHS Regular Accreditation The Psychological Friction to invest WEAKNESSES Mortgage Institutional Secondary Markets OPPORTUNITIES Proposed Rules revise Accredited investor to $500K and $2.5MM shrinks population 75%+ THREATS 9 Title II Of the Jobs Act2 -No limits on Raises -No Per Investor Limits -General Solicitation -Low Cost -Exempt State Registration -Up to 2000 Accredited Investors -No Audited Financial Status -Investor Verification -Requires Bad Actor Check -No Ongoing Reporting -No PreSale Approval -Limited Population -General Solicitation & Advertising Rules in Rule 506 & 144A -SPV’s for CF on Cap Table -Available to Foreign Issuers Overview %
  10. 10. ' !info@CrackTheCrowd.com 10 Intrastate3 4 5 + 6 majority exclude and may include RE Holding / Development Companies “Investment Company” Exclusion Varies, but most are $1MM and $2MM with audited Financials. Caps & Financial Audits Geographical and income-based investment limits Investor Restrictions Ensure Business Portal, escrow provider are also intrastate Authorized or Chartered Vendors As of August of 2015, twenty-nine (29) states have either enacted separate intrastate crowdfunding exemptions, or have enacted amendments to their existing blue sky laws to permit some type of intrastate crowdfunding. Source: CrowdfundingLegalHub.com / crowdfundinsider.com Proposed Enacted Rejected
  11. 11. ' !info@CrackTheCrowd.com 11 Reg A+ The Mini IPO( 1 2 Tier 1 -$20MM Max -Any Investor @ 10% of Income -No Audits -Blue Sky Applies -No State Override “If you need non-accredited investors and live in a state with intrastate Crowdfunding, think about that.” -Mark Roderick -$50MM Max -Any Investor @ 10% of Income -2 Years Audited Financials -$75k+ $20k Ongoing -6+ Months to File -Pre-Empt State Oversight -Different Investors P/Asset -Investors on Cap Table (No SPV intermediaries) Tier 2
  12. 12. ' !info@CrackTheCrowd.com 12 Title 3…What Matters?( • Attention to Business Model Viability • Max of $1 MM p/year > $5MM • Investor max (per issuer) $100,000 • Issuers aren't required to file tax returns, but must disclose specific info from their returns • Provide optional Q&A format that issuers could use in disclosures • Audited financial statements + review by an independent accountant auditor > First time would be permitted to provide review rather than audited financial statements • Information about officers and directors as well as 20%+ owners • Required to file an annual report with the commission and provide it to investors • Curation
  13. 13. ' !info@CrackTheCrowd.com 13 Title 3 - Company( Musts •U.S.-based •No disqualificaoon under Regulaoon Crowdfunding •No companies that failed to comply with the annual reporong requirements during two years preceding •Specific business plan, or must have indicated that the business plan is to engage in a merger or acquisioon with an unidenofied company or companies (no blank check companies) •A company can conduct its offering exclusively through one intermediary plaqorm at a ome •Max of $1 MM p/year > $5MM •Investor max (per issuer) $100,000 Disclosure Requirements •A descripoon of the business and the use of proceeds from the offering •Price and pricing method of the securioes and the targeted offering price •Audited financial statements + review by an independent accountant auditor •A company offering more than $500,000 - $1 million for the first ome would be permired to provide reviewed rather than audited financial statements •Informaoon about officers and directors as well as 20%+ owners •Required to file an annual report with the commission and provide it to investors
  14. 14. ' !info@CrackTheCrowd.com 14 Title 3 - Investor( Individual investors may, over a 12-month period, can invest in the aggregate across all crowdfunding offerings up to: •If income / NW is less than $100,000, than the greater of: $2,000 or 5 percent of the lesser of their annual income or net worth. •If both annual income and net worth are equal to or more than $100K, 10 percent of the lesser. •Securioes may not be resold for one year. •Holders of these securioes would not count toward the threshold that requires a company to register its securioes under Exchange Act Secoon 12(g) if the company is current in its annual reporong obligaoons, retains the services of a registered transfer agent, and has less than $25 million in total assets as of the end of its most recently completed fiscal year. •All transacoons relying on the new rules would be required to take place through an SEC-registered intermediary, either a broker-dealer or a funding plaqorm. • Take measures to reduce the risk of fraud, including having a reasonable basis for believing that a company complies with Regulaoon Crowdfunding and that the company has established means to keep accurate records of securioes holders. •Investor max per issuer $100,000.
  15. 15. ' !info@CrackTheCrowd.com 15 Title 3 - Platforms( •Must register with the commission & become a member of a naoonal securioes associaoon (currently, FINRA). •One intermediary plaqorm at a ome. •Provide investors with educaoonal materials for the process for invesong on the plaqorm, and the types of securioes being offered and informaoon a company must provide to investors, resale restricoons, and investment limits. •Take certain measures to reduce the risk of fraud, including having a reasonable basis for believing that a company complies with Regulaoon Crowdfunding and that the company has established means to keep accurate records of securioes holders. •Offer company disclosures to the public 21 days prior to the raise and throughout the offering period. •Provide communicaoon channels to permit discussions about offerings on the plaqorm. •Provide disclosure to investors about the compensaoon the intermediary receives. •Accept an investment commitment from an investor only ater that investor has opened an account. •Have a reasonable basis for believing an investor complies with the investment limitaoons. •Provide investors nooces once they have made investment commitments and confirmaoons at or before compleoon of a transacoon. •Comply with maintenance and transmission of funds requirements. The rules also would prohibit intermediaries from engaging in certain acCviCes, such as: •Providing access to companies that have a reasonable basis for believing there is potenoal for fraud or other investor protecoon concerns. •Having a financial interest in a company that is offering or selling securioes on its plaqorm unless the financial interest is compensaoon for the services. •Compensaong any person for providing the intermediary with personally idenofiable informaoon of any investor or potenoal investor. •Funding plaqorms would also be prohibited from providing investment advice or making recommendaoons.
  16. 16. ' !info@CrackTheCrowd.com 16 Example Campaign Rollout2 /0 1 1 7 8 Hire an accounong firm and securioes lawyer to prepare financial statements / offering docs. Review & prep contacts. Offering Prep Get a team with verified industry connections to offering. Create draft media, video, & promotion strategy. Hire Industry + Financial PR Firm Update Site, Social, Landing Pages, Prep PPC + Paid Promotion. Prep Digital Presence Draft the script and campaign digital assets, video, & two rounds of feedback from target investor audience. Build Assets & Get Feedback Choose a partner with existing accredited investor base, verify bad actor checks, upload tools & verify accreditation. Select Platform Secure pre-launch investor commitments and ongoing campaign press opportunities. Pre-funding Outreach Crack the Crowd does not engage in the offer, sale or transfer of securities and securities may not be offered, sold or transferred via our team or affiliated business contractors. Securities may not be offered or sold in the United States absent (i) registration under the U.S. Securities Act of 1933, as amended (the Securities Act) or (ii) an available exemption from registration under the Securities Act. Please consult legal counsel in the appropriate jurisdiction before offering, selling or buying securities as registration under the Securities Act or similar state legislation. Crack the Crowd is not guaranteeing any information as reliable or accurate, and that it's subject to change at anytime. Please consult with your own attorney before engaging in any equity crowdfunding activity. 
  17. 17. ' !info@CrackTheCrowd.com 2015 17 Predictions9 : ; < = Real estate crowdfunding expands to over $2.5B, a 250% increase over 2014 and 2013’s 156% growth. (Massolution) Mortgage players e.g., SOFI ($1T market) enter the space and disrupt beyond a $2.5B estimate. Title III makes new “equity” mortgages interesting. Title III arrives, estimates are revised further upward. Reg A+ lies largely untouched. Jeb, Hillary, adopt Title III fixes as a part of their platform. Dozens of CFPs launch. Dozens, that never had a chance, fail. Single issuer platforms fragment the market further. Strategic players invest.
  18. 18. ' !info@CrackTheCrowd.com ??? 18 9 <>= Multi-family and rehab offerings, again largely in the US, will see moderate growth of up to 150% for the coming year, with most projects amounting to less than $500,000. Cum sociis natoque penatibus et magnis dis parturient montes, nascetur ridiculus mus. Commercial remains the darling of institutional investments; greater adoption & viable investors drive real estate. Predictions
  19. 19. ( ' !info@CrackTheCrowd.com Paths to Market 19 Single Issuer ButtonBuild White Label
  20. 20. ( ' !info@CrackTheCrowd.com Platform 20
  21. 21. ' !info@CrackTheCrowd.com 21 What They’re Saying( “Crack the Crowd has produced some of the best crowdfunding strategy I’ve seen.” — Richard Swart, PHD, Scholar-in-Residence at UC Berkeley, Author, Crowdfunding Thought- leader “I can’t tell you how much time this has saved me in research...Thanks for some very concrete content in this space!” — Shad Vick - Chief Software Architect, Lunasoft “Their ability to create and identify a solid business strategy, regardless of the industry, is second to none. Whether in need of pitch coaching, business strategy, crowdfunding campaigns, or all of the above; Crack the Crowd is essential to your brand’s success.” — Frank Day - Founder, Krma Golf "Crack The Crowd solves the biggest problem crowd finance platforms face today: how to become relevant. Through applied analytics and a network of marketing professionals, CTC helps to let your platform stand tall among your peers. — Colton Riley - Executive Vice President, Tieback Realty Finance
  22. 22. ' !info@CrackTheCrowd.com 22 Our Partners In Crowdfunding4 Our network has unrivaled access to crowdfunding’s best, which enables us to pair you with a dedicated portfolio of companies that match your needs, and enables you to take advantage of opportunities: technology, operations, media, and legal support. Proven experts meet high-growth teams
  23. 23. ' !info@CrackTheCrowd.com 23 Our Guiding Process: Lean &Strategic( We’ll take full inventory of your existing tools to avoid overlap. We’ll conduct a discovery, audience segmentation, and review existing assets for your offering. Project Exploration & Discovery We’ll ideate & rapidly prototype several concepts within our team and gather feedback on several possible strategies to create a plan that incorporates the best elements of several approaches. Idea Generation & Strategic Plan We’ll launch a controlled experiment to your target audience, build statistically reliable feedback (and refine), while selectively seeding launch partner commitments. Beta / Validation We’ll help you launch using proprietary crowdfunding and traditional media methods with a focus on key performance indicators that scale & refine your operations. Hard Launch / Scale Tactics & Qualitative Validation Working with your target audience, we’ll capture qualitative data and compare several strategies side by side to create a beta product and rollout plan that incorporates the best of each concept, and maximizes viability. Review & refine Process
  24. 24. ' !info@CrackTheCrowd.com 24 Integrated Marketing & CRM Configuration( 4 Conversion is critical, so our practical execution and data driven approach minimizes waste and maximizes impact. 1 2 3 4 1 /5 Our creatives will create targeted ads and closely monitor your campaigns and content in a practical six- month package that includes monthly course-corrections to ensure efforts aren't wasted. Creative and Campaign launch We’ll fix data leaks and existing flaws to mitigate any gaps in our plan, and configure recurring snapshots. Configure & Align After we establish benchmarks, we’ll optimize channels to lower your cost per lead / customer, and scale high-performing tactics. Optimize and Scale Review goals, existing resources, and engagement to customize strategy and tactics. One size does not fit all. Assess $
  25. 25. ' !info@CrackTheCrowd.com 25 White-Label & BRANDED Content+ There is no berer R.O.I. for a plaqorm than kickstarong a high- quality campaign. We can build custom, beauoful, instrucoonal materials to help your campaigns raise more, close more quickly, and reduce customer support needs. Branded content Quick-Start Guides, Campaign Best Practices, White Papers, and more…
  26. 26. ' !info@CrackTheCrowd.com 26 Case Study? During the briefing phase it was apparent that this was a special project that would need a high-level of customizaoon. CrowdEngine was already growing fast, and we were able to accelerate growth and turn their vision into reality, on ome and on budget. We built the brand, markeong plan, site copy and design revisions that elevated their percepoon from one of many, to the premier provider of white label sotware soluoons in the space. Crowdengine White Label Crowdfunding Software
  27. 27. ( ' !info@CrackTheCrowd.com Campaign A La Carte Services 27 5 + 4 2 @ A Our team has launched millions of dollars worth of innovation. We know the techniques to capture and engage users. Product Generation & Refinement There is no need for guesswork when it comes to setting a target raise or rewards price. Our strategy will get you realistic targets and often higher margins. Pricing and Raise Target Analysis Services We work bootcamp-style to get as much work done in a single session as possible. You’ll learn what matters and how to execute as quickly as possible. 1-on-1 Campaign Consulting and Advisory Services Save hundreds of hours. We’ll help you through the first 80% of your work so you can launch faster without compromising quality. Outreach, Tools, and Templates With teams and partners that can cover everything from research, prototyping, to email marketing, we can simplify the campaign dramatically. Implementation: Fulfillment & Support Ask any crowdfunder, it’s no where near as easy as it looks. If your campaign has already launched and needs a boost, we can help to get it back on track. Launch Revival
  28. 28. ' !info@CrackTheCrowd.com 28 Marketing Strategies & Plans( Awareness Consideration Preference Purchase Partner / Re-up Email SEO/SEM Inbound Social PPC/Ads Different channels will outperform others in different stages of your conversion funnel. By mapping each through our integrated marketing system, we’ll optimize and scale your marketing mechanisms to get you the best bang for your buck.
  29. 29. ' !info@CrackTheCrowd.com Content and social media planning over 5 sessions Six Month Strategy 29 Unknown to Influencer Six Month Content and Social Strategy 4 % : 2 B C D Works with you one-on-one to customize your plan A dedicated content expert Engage with strategically developed content Targeted messages Periodic check-ins ensure you focus on what works Monitoring & Alerts Execute yourself or have our team manage for you D.I.Y. & Pro Options Content blueprints simplify the creative process Templates & Packages What could you do with a thousand more brains working for you? With Unknown to Influencer, you’ll get the roadmap that makes sense of social marketing so you can focus your time on what matters. Learn: how, who, and what matters, build clout, and engage your audience.
  30. 30. " 1387 E 3010 S Salt Lake City, UT +1 (801) 316 - 3564 ! '# E info@CrackTheCrowd.com/CracktheCrowd@crackthecrowd/CracktheCrowd Go Ahead, Ask Us Anything. Office, Social Media and e-Mail

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