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Crowdfinancing Fundamentals

Why Crowdfinance Is About Brand, Not Product

Want to start crowdfinancing? Creating a well-known, reliable and consistent brand is what makes investors want to give you their hard-earned money.


Secondary Markets

Crowdfunded equity investments are generally illiquid for two reasons: (a) the one-year holding period and (b) the lack of organized secondary markets for Title III shares.


Growth Potential

A History of Crowd Financing

This brief history includes rewards, donation, debt, and equity crowdfunding platforms in the USA, going all the way back to 2003.
Crowdfunding is a method of collecting many small contributions, by means of an online funding platform, to finance or capitalize a popular enterprise. Crowdfunding gained traction in the United States when Brian Camelio, a Boston musician and computer programmer, launched ArtistShare in 2003.


Business Plans, Part One: 10 Questions a Business Plan Must Answer

The business plan is one of the documents that issuers must provide to investors in Title III offerings. Here are the ten critical questions a strong business should answer:


Alternative Investments When Stocks Decline

Assessing the Wisdom of the Crowd in Equity Crowdfunding

On equity crowdfunding portals and platforms, you will have an opportunity to collaborate on deal selection and due diligence with other investors. Like social networks, the portals/platforms will show profiles of the investors who participate in these discussions, so you can assess their expertise and credibility.


Business Plans, Part Two: 4 Business Plan Red Flags

This article takes a different approach from the previous one. Here I tell you about common omissions and mistakes in business plans, any of which should make you cautious about the company’s offering.


How to Avoid Fraud in Equity Crowdfunding

Supporters of crowdfunding acknowledge that some fraud will probably occur, as it does everywhere—including the public securities markets. But they point to the low instance of fraud in rewards-based crowdfunding in the United States, and in equity-based crowdfunding in Australia (since 2006) and the United Kingdom (since 2012), where unsophisticated investors participate in private securities offerings.


Title III of the JOBS Act

Title III of the Jumpstart Our Business Startups (JOBS) Act of 2012 allows all investors, regardless of income or net worth, to invest in startups and growing private companies via funding portals that are registered with the Securities and Exchange Commission.


Title IV (Regulation A+)

Title IV of the Jumpstart Our Business Startups (JOBS) Act of 2012 expands the moribund Regulation A exemption by increasing the raise limit from $5 to $50 million. Non-accredited investors could participate in Reg A offerings before 2012, and they still can under Title IV but with certain limits.


Intrastate Equity CrowdFinancing

The Jumpstart Our Business Startups (JOBS) Act was signed into law in March 2012. Title III of the act, which legalized equity crowdfunding, could not launch until the SEC issued final rules for the operation of funding portals.Meanwhile, some states decided to get their own jumpstart going. Relying on the intrastate exemption from SEC registration, at least 24 states—led by Kansas and Georgia—have enacted legislation or promulgated regulations that allow unlimited numbers of non-accredited investors (everyone) to participate in small private securities offerings.


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