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MediaShares' History of Crowdfunding


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This Presentation on the History of Equity Crowdfunding was presented by Gene Massey, MediaShares CEO in the Atlanta Nowstreet Conference in 2012

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MediaShares' History of Crowdfunding

  1. 1. All Companies need funding,but lately it is hard to come by…
  2. 2. There is a new way for companies to get the funding they need: “Crowdfunding”
  3. 3. MediaShares provides a methodology for companies to get the funding they need by selling their stock on their ownWebsites to their fans, customers, users, or affinity group. We call our system a “Crowdfunded IPO”
  4. 4. CrowdfundingUsually thought of as getting smaller amounts of money from a large crowd of investors.
  5. 5. Crowdfunding in 1606 – A Copy of the World’s First Share of Stock
  6. 6. Dutch East India Company lasted 200 Years –At one point had 4785 Ships
  7. 7. May 17, 1792 – Buttonwood Agreement – Signed due toStockmarket crash in March of 1792!
  8. 8. The Birth of the New York Stock Exchangeand Crowdfunding in the U.S.A.
  9. 9. Tickertape - First used in 1870Enabled Communication with More Shareholders
  10. 10. Tickertape helped the stockmarket, but did very little for ladies fashions.
  11. 11. Telephone Invented in 1876 – The Crowd Got Larger
  12. 12. The Internet Grew!
  13. 13. 1991 – First Online Brokerage - The Crowd Got Much Larger! September 4, 1998 Google Incorporated
  14. 14. Entrepreneurs outside of the U.S. began touse the Internet for crowdfunding…
  15. 15. Justin Wilson, Formula One Driver, financed his Team by selling stock to his fans
  16. 16. Trampoline Systems, first London technology company financed by Crowdfunding
  17. 17. Sell-A-Band: Invest $10 online, finance the group, and get the band’s album
  18. 18. Online Crowdfunding in the U.S. Today:• Crowdfunding as Donations (Exempt from SEC investment regulations): – – –
  19. 19. Kickstarter – Some huge successes:
  20. 20. Word got out that Pabst Beer Company was for sale
  21. 21. Pabst Beer and Others Proved that Crowdfunding Works
  22. 22. New IPO Rules in the JOBS ActNew category of issuers:“Emerging Growth Companies” – Under $1Billion •Relaxed disclosures for EGCs (No SOX 404) •Confidential S-1 Submissions •Relaxed rules on analyst activities •“Testing the waters” •These changes are effective immediately
  23. 23. Stock Trading - Perception
  24. 24. Stock Trading - Reality
  25. 25. Stock Trading - Reality
  26. 26. Algorithmic Stock TradingAmount of stock trades as a percentage of the overall volume of trading: 70 % done by machines (computers) Source: Tabb Group
  27. 27. IPO’s Have Become An Exit Strategy, Not For Growth Capital• At one time, an IPO was for growth capital• Intel, Microsoft, and Apple received capital to grow• Various factors changed everything• Underwriters now looking for easy sell – high profile companies like Facebook, Twitter• Insiders want to cash out and dump to others• “Popsters” not Investors now• Secondary Churning/Trading by machines (computers)• Growth investors are VC’s, Angels, and Private share buyers• IPO’s now come too late in the growth cycle• Crowdfunding can fix the problem
  28. 28. MediaShares and Crowdfunding can fix the problem…
  29. 29. MediaShares Uses a System Already in Place: •Direct Registration enables stock sales from a company’s own Website or Facebook Page •S-3 Filing – Shelf Offering •No need to open and pre-fund an brokerage account •Stock purchase uses an ACH checking account debit •Held in book-entry for issuer •Very small transaction charge ($1.00 to $3.00)
  30. 30. Direct Registration
  31. 31. Simple Form to Buy StockQwikShares eliminates pre-fundingthe typical brokerage accountStock is purchased through an ACHchecking account debit, credit card,or other electronic paymentDirect Registration Supplier holds stockin book entry for company & purchaser
  32. 32. Form satisfies FINRA “suitability”requirements for “know your customer”Company gains valuable demographics oneach shareholderCompany and broker now have paymentinfo for future purchases!Purchase as little as one shareVery small fee: $1 to $3 for transaction
  33. 33. Thank You!Gen