The document discusses the JOBS Act and crowdfunding. It introduces four speakers who are experts in equity crowdfunding and capital formation: Doug Ellenoff, Judd Hollas, Joy Schoffler, and Judy Robinett. It provides brief biographies of each speaker, noting their relevant experience and roles in the crowdfunding industry. The document also contains slides on topics related to crowdfunding such as the regulatory environment, characteristics of crowdfunding campaigns, and how to build a network for crowdfunding.

1. The New Era of Investor Relations
#JOBSAct

2. Doug Ellenoff is a partner at Ellenoff Grossman & Schole LLP. Mr. Ellenoff is a
corporate and securities attorney with a specialty in business transactions and
corporate financing. The firm is involved in various capital market
initiatives, such as, crowdfunding (CrowdESQ.com), SPACs, PIPEs and
Registered Direct offerings. He represents many venture capital investor
groups and corporations involved in the capital formation process and
provides counsel with regard to their respective ongoing regulatory
compliance.
With respect to crowdfunding, he is actively engaged with clients (funding
portals, broker-dealers, technology solution providers, software
developers, investors and entrepreneurs), and has visited both the SEC and
FINRA numerous times to discuss the proposed rules, and presented at a
National Press Club event in 2013.
@douglasellenoff
www.egsllp.com
Douglas Ellenoff | Ellenoff, Grossman &
Schole
#JOBSAct

3. Joy Schoffler is the founder and principal of financial technology services
public relations firm Leverage PR and is an active member within the
crowdfunding industry. Joy sits on the board of the CF50, a global think tank
for the emerging crowdfunding industry and the Crowdfunding Intermediary
Regulatory Advocates (CFIRA) a national advocacy group for implementing
JOBS Act policy. She is also a contributing author for the upcoming DealFlow
Media, Wiley-published book, “Crowdfunding: The Definitive Guide to Raising
Capital on the Internet” and regularly writes for a number of outlets.
As principal of Leverage PR, Joy and her team regularly work with leaders
within the crowdfunding, investment and fintech sectors.
Having a passion for startups, she recently launched CrowdBuilder.co, a PR
and influencer engagement platform that helps crowdfunders and startups
connect with media and influencers.
@joyschoffler
@leverage_pr
www.leverage-pr.com
Joy Schoffler | Leverage PR
#JOBSAct

4. Judd Hollas is a pioneer in the field of crowdfunding with multiple patents
granted for web-based capital marketplace systems. As founder and CEO of
EquityNet, he leads the company's efforts to create and introduce innovative
new products and services and is responsible for its strategic direction and
fiscal and professional integrity. Prior to founding EquityNet in 2005, Judd
served as division manager for Beta-Rubicon, Inc., a consulting firm
specializing in technology assessment and business due diligence services.
Judd has more than 20 years of experience as an independent technology
analyst and investment manager in the private and public domains.
@equitynet
www.equitynet.com
Judd Hollas | EquityNet
#JOBSAct

5. Judy Robinett served as the CEO and president of a publicly-traded biotech
company for eight years. She now works with early-stage companies
developing their business and funding strategies. Her experience ranges from
management positions in large organizations, to serving Board of Directors, to
authoring state legislation, and participating on the team defining
performance criteria for the Malcolm Baldrige Award for Medical Excellence,
for which she received an award from President Bill Clinton.
With her powerful network of senior executives, funding sources, and content
experts, she helps companies identify the things that are often causing them
to stall and brings together the various resources needed to put them on the
right track for success. Whether their needs are a workable funding strategy,
a focused company strategy, or technology resources, Ms. Robinett either fills
the needs herself or calls on her team of internationally renowned experts to
get the job done.
@judyrobinett
www.judyrobinett.com
Judy Robinett | Power Connecting and
Startup Funding Expert
#JOBSAct

6. Disclaimer of Liability
• The information which is being shared with you today seeks and may
answer some questions of yours related to Title II and the
developments which are being observed within the online funding
platform industry, but is not intended as a comprehensive analysis of
the topic or situations directly impacting you and any of your existing
operations. In addition, this information should not be relied upon as
legal advice– these are only general observations of ours. You are
encouraged to speak with your own securities counsel. Your counsel
may analyze the same facts and rules differently and come to
dramatically different conclusions and recommendations for you
• Visit SEC.gov for more information
#JOBSAct

7. What is Crowdfunding?
Types of Crowdfunding
#JOBSAct

8. Donation or rewards-based crowdfunding is where
contributions are exchanged for current or future
of goods or services. Individuals or companies who
launch campaigns may compensate contributors
with the product they are developing or something
like a t-shirt, a copy of whatever they’re building or
even just a thank you.
Kickstarter and Indiegogo are the most popular
donations-based crowdfunding platforms.
Source: Crowdfund Insider
The Ultimate Crowdfunding Guide
Donation/Reward Based Crowdfunding
#JOBSAct

9. Equity crowdfunding is where the exchange is company equity, or
ownership, and not goods or services. The idea is very similar to
how common stock is bought and sold on the stock market.
Equity crowdfunding cannot take place in the U.S. at scale right
now. That isn’t to say it can’t take place at all. It can and does in the
form of “Title II” crowdfunding. There are complex rules in current
law that allow a company to sell stock to accredited investors under
“Regulation D.”
Source: Crowdfund Insider
The Ultimate Crowdfunding Guide
Equity Crowdfunding
#JOBSAct

10. When a crowd lends money to an individual or company with the
understanding that the loan will be repaid with interest. Can also
be called “peer-to-peer lending.”
Companies also use debt crowdfunding to acquire capital from the
crowd. As the individual or company pays back the debt
accrued, subsequent rounds generally come at lower interest
rates. Over time those seeking funding can acquire capital at rates
much lower than traditional credit cards or other types of high-
interest debt.
Source: Crowdfund Insider
The Ultimate Crowdfunding Guide
Debt Crowdfunding
#JOBSAct

11. • Hedges risk
• Can be used as a great
marketing tool
• Provides market validation
• Showcase success
Non-Monetary Benefits of Crowdfunding
#JOBSAct

12. JOBS Act Overview
Title II and III Crowdfunding—What’s the
Difference?
#JOBSAct

13. • An issuer may still choose to conduct a private offering in reliance on Rule 506(b)
without using general solicitation
• The issuer must take reasonable steps to verify that the purchasers of the
securities are accredited investors if it elects to generally solicit
• What is general solicitation and how it’s a departure from 506(b)
• All purchasers of securities must be accredited investors, either because they
come within one of the enumerated categories of persons that qualify as
accredited investors or the issuer reasonably believes that they qualify as
accredited investors, at the time of the sale of the securities
• The anti-fraud rules continue to apply
•
Title II--Generally Solicited Private Placements
#JOBSAct

14. Conceptual Framework of Novel
Crowdfunding Law—Title III
• Any investor, including non-accredited, may invest online in any
available crowdfunding investment opportunity, so long as it is
proportionate to how much they make or are worth
• The concept of limiting investor’s risk exposure, based upon income
and net worth, isn’t typically found in private placement or public
offering statutes– by convention broker-dealers impose such standards
to reduce investor risk and their own liability exposure based upon
“suitability standards” only. Title III is unique in this regard
#JOBSAct

15. Title III (NOT YET LEGAL!)
• Imposes caps for non-accredited investors:
• $2,000 for those individuals making less than $40,000 per annum
• 5% of income from $40,000 up to $100,000
• 10% of income above $100,000
• $100,000 per twelve month rolling period cap on individuals
• Issuers limited to $1,000,000 per twelve month rolling period
• Non-accredited investors broader access investing in exempt offerings
of private placements so long as appropriate and equally novel investor
protection mechanisms are implemented
#JOBSAct

16. • On September 23, 2013, the SEC voted
unanimously to pass proposed rules for
Title II crowdfunding--lifting the 80-year-
old ban on general solicitation.
• October 23rd, 2013 the SEC released
proposed rules for Title III
crowdfunding—aka unaccredited
investor crowdfunding
• Comment period for Title III proposed
rules ended February 3rd
Regulatory Update
#JOBSAct

17. U.S. Equity Crowdfunding Activity
Characteristics of Businesses Using Equity
Crowdfunding
#JOBSAct

18. Geographic Location
#JOBSAct

19. Capital Seeking
#JOBSAct

20. Previous Year Revenue
#JOBSAct

21. Projected Time Profitability
#JOBSAct

22. Industry Sectors
#JOBSAct

23. Navigating The Changing Landscape
The Impact of General Solicitation
#JOBSActSource: SEC.gov

24. General Solicitation
“General solicitation” is the act of publicly advertising or making public
statements regarding the sale of a securities offering.
Examples include but are not limited to:
• Advertisements published in newspapers, magazines, TV, and other
public websites
• Communications during seminars or other events
• The use of an unrestricted, and therefore publicly available, website
• Social media posts and email blasts
#JOBSActSource: SEC.gov

25. Title II – Accredited crowdfunding
• Has no restrictions on the type of general solicitations that may be
made or the media that may be employed to made such solicitations.
This means that a company raising funds via accredited crowdfunding
(an “issuer”) is free to use facebook, twitter, linkedin, youtube and any
other medium to advertise, describe and generate buzz about the
offering.
• However, there are certain considerations that an issuer must be
aware of and precautions that it must take.
#JOBSActSource: SEC.gov

26. No Bad Actors
“Bad actor” disqualification requirements prohibit issuers and others, such as underwriters, placement agents,
directors, officers, and shareholders of the issuer, from participating in exempt securities offerings, if they have
been convicted of, or are subject to court or administrative sanctions for, securities fraud or other violations of
specified laws
The rule includes the following categories of disqualifying events
• Criminal convictions; Court injunctions and restraining orders
• Final orders of certain state regulators (such as securities, banking, and insurance) and federal regulators
• Commission disciplinary orders relating to brokers, dealers, municipal securities dealers, investment
advisers, and investment companies and their associated persons
• Certain Commission cease-and-desist orders
• Suspension or expulsion from membership in, or suspension or barring from association with a member of,
a securities self-regulatory organization (“SRO”)
• Commission stop orders and orders suspending a Regulation A exemption
• U.S. Postal Service false representation orders
#JOBSAct

27. Reasonable Steps
• Underpinning the verification process, the SEC will
take a principles-based approach to the investor
accreditation process
• The SEC has indicated that reasonable efforts to verify
investor status may differ depending on the facts and
circumstances
• The nature of the purchaser
• The nature and amount of information about the
purchaser
• The nature of the offering
#JOBSAct

28. Misrepresentations—Antifraud Rules Still Apply!
A through review of all information regarding the
offering should be done to ensure it is accurate and not
misleading.
Be extra careful with sales and marketing efforts
before and during a raise!
#JOBSAct
The issuer will be liable for any material misstatements it
makes in connection with the offering!

29. Marketing Your Offering –New Rules Apply!
• All advertisements or promotional statements
made, for which compensation is received, must
include disclosure of such compensation, the
type and amount of
• This includes social media likes, retweets, etc. –
major implications for 3rd party marketers
• Compensation could take the form of cash, debt
or equity interests (including options) in the
issuer and other non-cash compensation
#JOBSActSource: SEC.gov

30. Be Careful with Social Media
• Maintain a clear communication policy regarding the promotion of
their crowdfunding offering
• Actively manage social media campaigns
• Have legal review all social media posts and strategies before
campaign
• Monitor social media daily
• Be careful of misstatements and omissions on social
• Report compensation of promoters in advertising/ marketing
#JOBSActSource: SEC.gov

31. The Funding Ecosystem
#JOBSAct
Finding and Securing Investment

32. The Funding Ecosystem
Source: PricewaterhouseCoopers/National Venture
Capital Association MoneyTree™ Report, Data:
Thomson Reuters, Center for Venture Research
#JOBSAct

33. Who Gives?
“Most of my discoveries are made
through Twitter.”
- Matt Haugly
Backed 84 campaigns.
#JOBSAct

34. Bring Your Own Crowd
#JOBSAct

35. Building Your Crowd
#JOBSAct
How to Build a Crowd for Your Crowdfunding Campaign

36. Network Building
“Go out there and get connected.”
- Guy Kawasaki
#JOBSAct

37. Keys to Success
#JOBSAct
• Build your crowd
• Segment your database
• Prepare your network
• Build your digital profile
• Make sure your team is ready

38. • A, B, and C investors
• Remember the 80 / 20
rule
• Spend 80% of your time
with the 20% most likely
to invest
Segment your database
#JOBSAct

39. • Accomplishments
• Client list
• Associations
• Media coverage
• Following
• Speaking engagements
• Online profile
• Website or blog
• Social media profiles
• Quality of search results
Own Your Industry—Build Thought Leadership
#JOBSAct

40. • Have a good idea
• Have reputable co-founders
• Be legally licensed
• Create an executive summary
• Have a business plan
• Have realistic financial
projections
• Create an offering document
• Have a reasonable valuation
Crowdfunding is Pitching Investors
#JOBSAct

41. @douglasellenoff
@equitynet
@judyrobinett
@joyschoffler
Questions?
#JOBSAct

42. A Copy of the slides can be found at
www.crowdbuilder.co/blog
Thank You!