This document discusses equity crowdfunding as a potential funding option for startups. It provides an overview of equity crowdfunding regulations, benefits, challenges, and tips for success. Specifically, it notes that equity crowdfunding is still in its infancy but can centralize and streamline fundraising. However, misconceptions about the process are common and managing investors can be complicated. Rewards-based crowdfunding may be a good stepping stone. To succeed, companies need organization, clear communication, and momentum. Both investors and entrepreneurs can benefit through increased deal flow and networking. Resources for further information are provided.

1. Equity Crowdfunding: Is It a
Good Funding Option for Your
Startup?
Geri Stengel, President / Ventureneer
EARLY
GROWTH
FINANCIAL
SERVICES
8.12.2015

2. EQUITY CROWDFUNDING: IS IT A GOOD FUNDING
OPTION FOR YOUR STARTUP?
● What and why
● Just the facts, ma’am
● Give it to me straight
● What’s it take to succeed
● Both sides of the equation
● Resources
2

3. What Is Equity Crowdfunding?
Regulation D of Title II of the JOBS Act
● 506(b)
● 506 (c)
● Title III, still to come

4. Why Equity Crowdfunding?
● Centralizes
● Streamlines
● Simplifies
● Shortens the fundraising process

5. JUST THE FACTS, MA’AM
5

6. Equity Crowdfunding Is In Its Infancy
Venture Capital Angel Investments
$48 Billion
Real world $24 Billion
Crowdfunding $.5 Billion
Source: MoneyTree, Center for Venture Research and Crowdnetic for 2014

7. Success Rate Among Entrepreneurs Seeking Angel Investments
Real World
19%
Crowdfunding
24%

8. Top 10 Cities for Equity Crowdfunding

9. GIVE IT TO ME STRAIGHT
9

10. Misconceptions Cloud Equity Crowdfunding Reality
● Verifying accreditation
● Managing investors is complicated
● Financial reporting
● Expensive
● Venture Capitalists diss crowdfunding
● If you build it, they will come
● Social media outreach will make your
campaign go viral and the rest, as they
say is history
Photo credit: Flickr, Faungg's Photos, Cloudy Mountain

11. The Ugly of Crowdfunding
Photo Credit: Flickr, Tambako The Jaguar, «I'm ugly, and?»

12. Equity Crowdfunding: To Carpe Diem or Not
Photo credit: Flickr, Hamish Darby, kasplosh
● A large market
● Solving a major pain-point
● Defensible competitive
advantage
● An exit
● A great team

13. Fundraising: No One Size Fits All
● 506(b)
● 506(c)
● Offline
● Rewards
Photo credit: Flickr, David Goehring, Emptily Nested

14. Choosing an Equity Crowdfunding Platform
● Compensation
● Deal structure
● Due diligence
● Exclusivity
● Minimums and maximums
● Products
● Regulation compliance
● Regulatory Profile
● Self service vs. full service
● Stage of company
● Syndicates
● Tools
● Track record
● Value added

15. Success Stories
Wonder Technologies
Crowdfunder
Committed: $800,000
Digitzs
Crowdfunder
Committed: $2 million
ONEVEST
Onevest
Committed: $2 million
Le Grand Courtage
CircleUp
Raised: $400,000
Good Clean Love
CircleUp
Raised: $400,000
Smarty Pants Vitamins
CircleUp
Raised in 2 rounds:
$4.7 million

16. The Benefits of Leading With a Rewards-Based Crowdfunding
● Debt and Equity free
● Market research
● Social proof
● Validation
● Customer engagement
● Marketing

17. Use Rewards-Based Crowdfunding as a Stepping Stone
Other Company Machine
Kickstarter
Goal: $50,000
Raised: $312,000
VROU
Plum Alley
Goal: $30,000
Raised: $32,000
Thinx
Kickstarter
Goal: $50,000
Raised: $65,000
Indiegogo
Goal: $10,000
Raised: $19,000
Website
$25,000
TOTAL: $110,000
Real Food Blends
Indiegogo
Goal: $10,000
Raised: $16,000
Bumbleroot
Indiegogo
Goal: $9,000
Raised: $10,000

18. WHAT’S IT TAKE TO SUCCEED
18

19. Equity Crowdfunding Pointers
● Build your network before you need it
● Get organized
● Segment network, target appropriately
● Communicate clearly
● Focus on solving a pain point
● Highlight the skills of the team
● Make a compelling video
● Emphasize traction: customers,
partners, media mentions, etc.
● Show momentum
● Reach out often using different
● Make the ask and ignore rejection
● Attend to details
Photo credit: Flickr,
Anonymous Account, Where

20. Skills Required
● Organized, diligent
● Marketer
● Story teller
● Clear communicator
● Realistic projections
● Aligns words with actions
● Frank when mistakes happen
● Good follow up
Photo credit: Flickr, Bob Bob, Getting airtime in the women's
boarder cross at The Brits 2010 at Laax, Switzerland

21. BOTH SIDES OF THE EQUATION
21

22. What’s in It for the Investor?
● Make a profit
● Apply their own skills and
experiences
● Give back
● Participate actively in investing
● Join boards of directors,
especially true for women
● Finding like-minded people to
invest in – values driven
Photo credit: Flickr, Simon Cunningham, Return on Investment

23. Why Angels Like Crowdfunding Platforms
● Increased deal flow
● Curated deals
● Centralized/convenient
● Transparency
● Streamlines process
● Saves time
● Diversifies portfolio
● Learn from others

24. RESOURCES
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25. Resources
● Stand Out In the Crowd: How Women (and Men) Benefit From Equity
Crowdfunding
● All Geri Stengel’s articles on crowdfinance
● 6 Common Misconceptions About Equity Crowdfunding
● How to Ensure a Successful Crowdfunding Campaign
● 5 Secrets to a Successful Equity Crowdfunding Campaign
● Study Reveals Secrets to a Successful Crowdfunding Campaign
● Going For it through Crowdfunding
● Women vs. Men: Who’s Better at Crowdfunding?
● How Crowdfunding Is Closing The Funding Gap for Female Founders

26. Questions

27. STAND OUT IN THE CROWD:
How Women (and Men) Benefit From Equity CrowdfundingTHANK
YOU
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