Nicole Moss is an attorney with the law firm of Campbell & Riggs, P.C., where she focuses on taking startup companies from inception to liquidity, as well as other corporate matters including mergers and acquisitions and private securities transactions. Previous experience includes: serving as General Counsel to a small investment fund in Houston; advising private equity and venture capital clients in fund formation and M&A activities as an attorney in the Boston office of Weil, Gotshal & Manges LLP; and serving as marketing and programs manager at the Massachusetts Institute of Technology Entrepreneurship Center. Prior to that, Nicole founded and ran BluePrint, a provider of non-core services to startups in and around Boston and also recruited founding team and advisory board members for startups at Cambridge Incubator. Nicole is a guest lecturer for the Wolff Center for Entrepreneurship at the University of Houston. She is licensed in Texas and Massachusetts.
2. Disclaimer
The information presented herein and the surrounding
discussion are provided for educational or informational
purposes only. The information presented herein is not
necessarily applicable to any particular situation herein or
discussed in the course of this presentation. By providing this
information and engaging in discussion, no legal advice is
provided hereby and no attorney client relationship or privilege
is being established. Every business and every issue is unique
and legal questions or issues should be directed to your
attorney.
3. Historical Overview
•First Public Stock Issued 1602
Dutch East India Company (VOC)
•1933 Act
• Regulates Issuances (Unless Exempt )
• Not a “public offering”
• Accredited Investors, Affiliates
•1934 Act
• Regulates Securities Trading
4. Accredited Investors
•>$1M Net Worth (excluding house)
•>$200k/yr Salary
• Last 2 Years & This Year
• >$300k w/ Spouse
•Officers, Directors of Company
6. What is Crowdfunding
Umbrella term including:
•Microfunding
•P2P Lending
•P2P Investing for Non-Cash Returns
•P2P Donations
•P2P Investing for Equity/Debt Returns
(but not for everyone just yet)
7. Microfunding
•Small grants (no strings)
•Usually $, can be in-kind
•Startup focused (not non-profit)
•See: The Awesome Foundation
8. P2P Lending/Microlending
•Startups can borrow from startup-
friendly lenders
•Individuals can lend/invest
• For now, just AIs and F&F
• Soon anyone can lend
•See SoMoLend, Prosper, Mosaic
9. P2P Non-Profit Campaigns
•Host campaigns for multiple causes
•Raise funds, awareness, other
projects
•Not all 501(c)(3)
•Startups only if cause-based
13. How it Works
•Create a Campaign Page
•Determine Goal Amount, Length,
Rewards
•Provide Description, Video
•Launch & Advertise
(OK for non-securities)
•Pay Funding Portal
25. Issuer Restrictions
•Must be US-based entity
•Raise up to $1M/Year
•Registration w/ SEC
•Use Qualified Crowdfunding Portal
•Make Disclosures
•No Advertising
26. Issuer Requirements
•Set Funding Goal
•Set Dates of Fundraise
•Price the Offering
•Provide Regular Updates
•Ongoing Reporting Compliance
27. Investor Restrictions
Investor Net
Worth/ Salary
Investment
Restriction
Maximum
Investment
<$40k $2k/year $2k
<$100k 5% $5k
>$100k 5% $100,000k
… & Hold the Investment for at Least One Year
28. Portal Restrictions
•Subject to SEC Rules
•No Advertising/Promotion
•No Compensation Based on Funding
(Internally, Externally)
•No Investment Advising
•No Conflicts
32. What’s Now … What’s Next
•Determine Mode of Campaign
• Rewards, Equity, Debt-based
•Create Campaign/Apply to AI Portals
•Get Legal Help if You Need to…
• Create Company
• Allocate/Issue Equity
• Protect/Assign IP
• Review Investment Documents