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Are there any helpful crowdfunding events coming soon?
Glad to learn of your interest in regulated investment crowdfunding (#RIC).
Yes, there are a few upcoming events in the space ...
SuperCrowd22 will include a Who's Who in regulated crowdfunding and will examine the intersection of crowdfunding and impact investing. It is a web-based event bein... more
Glad to learn of your interest in regulated investment crowdfunding (#RIC).
Yes, there are a few upcoming events in the space ...
SuperCrowd22 will include a Who's Who in regulated crowdfunding and will examine the intersection of crowdfunding and impact investing. It is a web-based event being co-hosted by the Crowdfunding Professional Association (CfPA), Brainsy, and many other impactful organizations September 15-16 (registration link is here: https://www.supercrowd22.com/httpssupercrowd22comtextandpercent20otherpercent20experts-register-joinpercent20thepercent20supercrowd ) For more info, follow up with Devin Thorpe
Equity Crowdfunding Week is another event that takes place a week later in person in LA (September 21-23) or online - https://www.startupstarter.co/ecw For more info, follow up with Etan Butler
Silicon Prairie Crowdfunding often hosts webinars on Wednesdays on various topics related to crowdfunding (for beginners to experienced hands) and you can see a list of their events at: https://www.meetup.com/silicon-prairie-fundraising For more info, follow up with David Duccini
Stay tuned on the CfPA ECO as CfPA often hosts events or promotes the events of members organizations.
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Form C-TR question on timing of filing.
Answering a question with a question: how would engaging a transfer agent reduce the number of holders of record?
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Do you think DAOs could replace the funding portals and investment crowdfunding?
Yes to funding portals (and probably should) and no to replacing investment crowdfunding. Rather, DAOs will most likely use investment crowdfunding to fund its projects.
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Good day, As a group of crowdfunding expertsI am hopeful you can steer me in the right direction. We are looking to crowdfund an Arizona permitted approved gold mining opportunity for $1,000,000, which is our immediate concern, and the next tranche would be for about...
Jordan, this is a great question. Thanks for coming to the CfPA Ecosystem for insights.
Of course, there is no industry or sector that can be thought of as traditionally raising money via crowdfunding. The industry is too new, implemented just six years ago and really gaining scale only in the past ... more
Jordan, this is a great question. Thanks for coming to the CfPA Ecosystem for insights.
Of course, there is no industry or sector that can be thought of as traditionally raising money via crowdfunding. The industry is too new, implemented just six years ago and really gaining scale only in the past two years. We're all learning.
There is no reason you can't crowdfund for a gold mining operation. Obviously, this is a great time to be investing in gold.
FINRA-registered portals are required to do some screening to prevent fraudsters from attempting to raise money on their platforms. Portals are allowed to do some additional screening to curate a theme. They are not allowed to imply that they have done thorough underwriting of an offering. Broker-Dealers, like Start Engine, that operate portals are allowed to do more and charge more than the other portals, including offering more help raising money.
Some platforms focus on serving small business, real estate, tech or other niches. While I haven't spotted a portal focused on extractive industries, one may exist. However, you can test out the large players (Wefunder, Republic and StartEngine) where you are most likely to find admission.
You want to remember that there is no magic crowd; the money you raise will come from your networks primarily.
Good luck!
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What are key differences between a Crowdfunding SAFE and a "Traditional" SAFE?
For the complete answer we drafted to answer this, please read our complete blog post on Traditional SAFE vs. Crowdfunding SAFE.
A brief summary of some of the key differences include:
1. Crowdfunding SAFEs may have optional conversions: in some crowdfunding SAFEs (such as Republic’s Crowd Safe), sh... more
For the complete answer we drafted to answer this, please read our complete blog post on Traditional SAFE vs. Crowdfunding SAFE.
A brief summary of some of the key differences include:
1. Crowdfunding SAFEs may have optional conversions: in some crowdfunding SAFEs (such as Republic’s Crowd Safe), shares convert at the next equity financing round at the discretion of the issuer (i.e the startup). While most traditional SAFEs are forced to convert at the next qualified financing round, many crowdfunding SAFEs give the company the option to either convert to equity or defer conversion until a later time.
While this may sound like a bad thing for investors at first, there are situations when investors can actually benefit from this delayed conversion (e.g. they may actually experience less dilution due to follow-on raises than other equity investors).
2. Crowdfunding SAFEs may convert to Shadow Series shares: in the Republic Crowd Safe, the SAFE may convert to shadow shares, which means the same class of shares (e.g. Common vs. Preferred) as other investors, but with limited voting and information rights.
3. Crowdfunding SAFEs Investing via an SPV: When you invest in a SAFE on Wefunder, you’ll often be investing in a Special Purpose Vehicle (SPV). While this is typical for angel investors on sites like AngelList, this means you’ll actually be investing in the SPV (e.g. “Company X, a Series of Wefunder SPV LLC”), and not be directly investing in the company itself.Investing in an SPV may have potential tax implications (because the SPV is an LLC). Furthermore, investing in an SPV may have implications in terms of the potential future liquidity of that investment due to complications when listing SPV shares on a secondary market.
4. Many Crowdfunding SAFEs are still Pre-Money: while the standard Y-Combinator SAFE was changed to convert based upon post-money valuation in 2018, many of the SAFEs used on crowdfunding sites today are still using pre-money valuation for the conversion price.
5. Some Crowdfunding SAFEs may have repurchase rights: something that most VCs and angel SAFEs would never have is a “repurchase rights” or “redemptive clause”. These terms allow the company to buyback SAFE investors at the company’s discretion, which typically happens if a later-stage VC wants to “clean up” the cap table (i.e. get more control and ownership for themselves) or when the company is doing well and wants to buy out early investors. It's my personal opinion that investors should typically avoid SAFEs with these terms. These terms put the company’s best interests at odds with that of the investors’.
The good news is that I personally have not seen any SAFEs recently with these repurchase terms (although I have seen some Common Stock offerings on some platforms with repurchase rights, so be careful!). It seems that crowdfunding portals have realized that these repurchase rights often end poorly for investors and are used by issuers who might not have their crowdfunding investors’ best interests at heart.
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I would like to know if there is any other distinctive crowdfunding model other than the four basic crowdfunding models that include donation-based, reward-based, equity-based, and debt-based models? Excluding the hybrid, of course.
Hello Kiko,
There is also revenue-sharing and royalty crowdfunding. Those two are similar but each has its own nuance depending on how you structure your unique deal.
Just keep two things in mind:
1. Investors will want good investment terms
2. Crowdfunding doesn't actually r... more
Hello Kiko,
There is also revenue-sharing and royalty crowdfunding. Those two are similar but each has its own nuance depending on how you structure your unique deal.
Just keep two things in mind:
1. Investors will want good investment terms
2. Crowdfunding doesn't actually raise you money, marketing does. Gotta market your deal.
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I'm very new to investments an startups. I'm behind on my updated progress with companies I've invested in through Republic. I just need to be pointed in the right direction to who could help me get up to speed with all 8 investments of mine? I'd appreciate the help greatly.
Hi Derrick,
If you invested on Republic.co, you should be able to check your investments if you:
1. Log in
2. Hover over your click the drop-down in the top right
3. Select "My Portfolio"
4. You can then click on any of your investments to read updates.
You can also hover over the lightning bolt nex... more
Hi Derrick,
If you invested on Republic.co, you should be able to check your investments if you:
1. Log in
2. Hover over your click the drop-down in the top right
3. Select "My Portfolio"
4. You can then click on any of your investments to read updates.
You can also hover over the lightning bolt next to your picture, which will display all the updates for companies you follow, have invested in, etc.
Hope this helps!
Best,
Brian
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What's the number one piece of advice you would give to a founder or entrepreneur who is looking to use equity crowdfunding to raise capital?
Have an MVP (minimal viable product).
Having an MVP does a few things:
1. You can engage in Triangle Financing and make your investment crowdfunding an easier journey.
2. Having a product lets your potential investors know you're serious and further ahead tha... more
Have an MVP (minimal viable product).
Having an MVP does a few things:
1. You can engage in Triangle Financing and make your investment crowdfunding an easier journey.
2. Having a product lets your potential investors know you're serious and further ahead than just having an idea.
3. The hardest part of crowdfunding is attracting the crowd. When you have a product don't just attract the crowd to invest, invite them to buy your product. That is called generating revenue. Revenue is the best capital in the world.
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What are the minimum revenues that a company would usually have before considering a "Slow PO" on OTC?
There are a number of pre-revenue companies that have gone this route. So the answer is there is no “Minimum” per se.
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