Part of Karen Rands' Money Hunt series of educational topics for entrepreneurs seeking knowledge about raising capital and gaining access to capital. This presentation provides a basic understanding of crowdfunding and how it compares to traditional methods for raising capital. This is the intellectual property of Karen Rands, all rights reserved.

1. The Money Hunt
Raising Capital from the Crowd
Karen Rands Presents

2. Goals for Today
• Understanding the opportunity and risk with CrowdFunding
• The different options
• How it fits with traditional equity
• What you need to succeed
The Money Hunt Series | © 2007:: 2018 | All Rights Reseved | Karen Rands | HTTP://KarenRands.co 2

3. About Karen Rands
• Book Learning & Life Learning
• An Opportunist
• The Compassionate Capitalist Movement
• Serving our Customers
• Strategic Advise and Consulting on Capital Strategy & Financing, Investor Readiness, Business Planning,
Go-To-Market, Acquisition Readiness
• Investor Relations Platform for Reg D 506c, Reg A+
• National Advertising on all Media at a significant discount
The Money Hunt Series | © 2007:: 2018 | All Rights Reseved | Karen Rands | HTTP://KarenRands.co 3

4. Origins
• Crowdfunding is a form of crowdsourcing of alternative finance
• Non-Equity Crowd Funding
• Kickstarter
• 397K projects on Kickstarter alone, 3,777 live today
• $3Billion
• 36% success rate
• Great Recession > JOBS Act 2012
The Money Hunt Series | © 2007:: 2018 | All Rights Reseved | Karen Rands | HTTP://KarenRands.co 4

5. Crowd Funding
• Non-Equity Reward Based
• Intrastate
• JOBS ACT 2012
• Type II - Reg D 506c 2013
• Type IV - Reg A+ 2015
• Type III – Reg CF 2016
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6. Stages of Capital
Stage of
Business
Amount of
Capital
Sources of Capital
Concept $100K to $300K
Balance Sheet
Seed Capital: Founder Financing,
Friends & Family, Affinity Group, Crowd
Funding
Start – Up / Early
Stage
$500K to $3M A Round: Friends & Family sourced,
Angel Groups, Individual Angels, Direct
Public Offering, Traditional and
Alternative Financing
Emerging $5M to $15M B Round: Angel Groups, Crowd Finance,
Venture Capital, Institutional Capital
Growth $20M to $50M C Round: Reg A+, Venture Capital,
Institutional, Traditional Finance
Expansion $20M to $100M D Round: Venture Capital, Private Equity
Funds, Institutional, PIPE
The Money Hunt Series | © 2007:: 2018 | All Rights Reseved | Karen Rands | HTTP://KarenRands.co 6

7. Stages of Capital
Stage of
Business
Amount of
Capital
Sources of Capital
Concept $100K to $300K
Balance Sheet
Seed Capital: Founder Financing,
Friends & Family, Affinity Group, Crowd
Funding
Start – Up / Early
Stage
$500K to $3M A Round: Friends & Family sourced,
Angel Groups, Individual Angels, Direct
Public Offering, Traditional and
Alternative Financing
Emerging $5M to $15M B Round: Angel Groups, Crowd Finance,
Venture Capital, Institutional Capital
Growth $20M to $50M C Round: Reg A+, Venture Capital,
Institutional, Traditional Finance
Expansion $20M to $100M D Round: Venture Capital, Private Equity
Funds, Institutional, PIPE
The Money Hunt Series | © 2007:: 2018 | All Rights Reseved | Karen Rands | HTTP://KarenRands.co 7
REWARD BASED
CROWDFUNDING
AND REG CF
REG D 506c
REG A+

8. The Money Hunt Series | © 2007:: 2018 | All Rights Reseved | Karen Rands | HTTP://KarenRands.co 8

9. The Money Hunt Series | © 2007:: 2018 | All Rights Reseved | Karen Rands | HTTP://KarenRands.co 9

10. The Money Hunt Series | © 2007:: 2018 | All Rights Reseved | Karen Rands | HTTP://KarenRands.co 10

11. Always a Pitch
The Money Hunt Series | © 2007:: 2018 | All Rights Reseved | Karen Rands | HTTP://KarenRands.co 11

12. Traditional
• You are the Video
• Power Point
• Executive Summary, Business Plan
• Offering Documents
• Due Diligence
The Money Hunt Series | © 2007:: 2018 | All Rights Reseved | Karen Rands | HTTP://KarenRands.co 12

13. Validating Your Business
More Likely to Attract Investment Capital
• Proven Business Model -- Positive Cash Flow and Annual Growth
OR
• Product Solves a Problem for your Target Market
• Know your Competition
• Valid Financial Forecast – No Hockey Stick
• Investor or Bank Ready Documents - A Complete Operating Plan
• Strategy to Execute once funding has been received
The Money Hunt Series | © 2007:: 2018 | All Rights Reseved | Karen Rands | HTTP://KarenRands.co 13

14. What Type of Offer
• Convertible Note
• SAFE Note
• Revenue / Royalty Financing
• No Equity – Multiple on Money Paid from Revenue
• Straight Equity – Preferred / Common
• Valuation
The Money Hunt Series | © 2007:: 2018 | All Rights Reseved | Karen Rands | HTTP://KarenRands.co 14

15. Filling the Funnel
Kugarand Theory of Private Equity
1 x 3 x 15
SO…..
$1M in $25K increments means
40 Check Writers
120 sweethearts
600 To have Seen it & Thought about it
The Money Hunt Series | © 2007:: 2018 | All Rights Reseved | Karen Rands | HTTP://KarenRands.co 15

16. Handling the No’s
• Many Reasons for a No
• Lack of Liquidity
• Not their thing
• Gaps in the Business Plan
• No Trust, Disbelief
• Conversion to Maybe
• Communication over time
The Money Hunt Series | © 2007:: 2018 | All Rights Reseved | Karen Rands | HTTP://KarenRands.co 16

17. Handling the “Maybe’s”
• Not a NO until it is NO
• Respectful and Consistent Communication
• Over come the Objection
• Addressing their Fears
• Losing the Money
• Why “Management Team”
Conscious
Hope
Subconscious
Fear
The Money Hunt Series | © 2007:: 2018 | All Rights Reseved | Karen Rands | HTTP://KarenRands.co 17

18. Intrastate Crowd Funding
The Money Hunt Series | © 2007:: 2018 | All Rights Reseved | Karen Rands | HTTP://KarenRands.co 18

19. Intrastate CrowdFunding
• In-State - Income Based
• Create Situations to Pitch
• Local Pitch Events
• Social Media
• PR
• Direct Mail Invites
The Money Hunt Series | © 2007:: 2018 | All Rights Reseved | Karen Rands | HTTP://KarenRands.co 19

20. Amplify the Pitch
The Money Hunt Series | © 2007:: 2018 | All Rights Reseved | Karen Rands | HTTP://KarenRands.co 20

21. “Crowd” Funding
• Marketing Strategy
• Mirrors a Customer Acquisition Strategy
• Authority Marketing
• Social Media
• Traditional Advertising
• All the other stuff
The Money Hunt Series | © 2007:: 2018 | All Rights Reseved | Karen Rands | HTTP://KarenRands.co 21

22. Key Difference
• Eyeballs - Volume
• Relationship - Influence
• Qualification
• Budget
• Handling the Nos
The Money Hunt Series | © 2007:: 2018 | All Rights Reseved | Karen Rands | HTTP://KarenRands.co 22

23. The “I didn’t Think Of That” Stuff
• Consistency
• Cashflow & Burn Rate
• Escrow
• Customer Acquisition
• Authentic Customer
• Ask for Right Amount of Money
• Or Have a Thought Out Strategy
The Money Hunt Series | © 2007:: 2018 | All Rights Reseved | Karen Rands | HTTP://KarenRands.co 23

24. Capital Strategy
The Money Hunt Series | © 2007:: 2018 | All Rights Reseved | Karen Rands | HTTP://KarenRands.co 24
Seed
Stage
• Friends & Family
• Full Strategy & Validation
Startup
• Intrastate
• Reg CF
Growth
• Reg D 506c
• Reg A+
Replaces Angel Group Syndication
Replaces VC

25. Platforms
• Intrastate Portals
• Reg CF Portals
• Seed Invest
• TruCrowd
• SEARCH
• Reg 506C & Reg A+
• No Broker Dealer/ Portal
• Transfer Agent
The Money Hunt Series | © 2007:: 2018 | All Rights Reseved | Karen Rands | HTTP://KarenRands.co 25

26. Wrapping Up
• Work the numbers
• Understand your potential ROI
• Build your funnel
• Offline and Online
• Do the Work
• No Shortcuts
The Money Hunt Series | © 2007:: 2018 | All Rights Reseved | Karen Rands | HTTP://KarenRands.co 26

27. Thank You & Questions
http://KarenRands.co Facebook: BusinessInvestorGrow
twitter: @karen_rands Facebook: TheKarenRands
Sign up for free investor “video tips” – The Compassionate Capitalist Coffee Break
http://bit.ly/CCCB-signup
Sign up for all the Meetup Workshops at
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Get Started With – Business Plan Review and Consultation Session
Entrepreneur Capital Mastery Coaching Program
“Bucket of Hours”
The Money Hunt Series | © 2007:: 2018 | All Rights Reseved | Karen Rands | HTTP://KarenRands.co 27