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Hi Mr. Huston, I am a law school graduate and interested in getting into crowdfunding. Any suggestions or recommendations? Thank you, Ray Hill
Hi Ray,
Congratulations on your graduation from law school. I always recommend to someone new to investment crowdfunding to start by visiting a platform looking around, finding a company you like, and investing in the company. Experiencing a crowdfunding campaign as an investor is a significant firs... more
Hi Ray,
Congratulations on your graduation from law school. I always recommend to someone new to investment crowdfunding to start by visiting a platform looking around, finding a company you like, and investing in the company. Experiencing a crowdfunding campaign as an investor is a significant first step. Going through the due diligence process reviewing the form C to get a better understanding of the required compliance and then experiencing the marketing and investor acquisition process reading campaign page updates, asking questions, reading the responses from the founders and reading your emails, attending founder webinars, and engaging the investor community with your questions and insights. This would be the first step in better understanding the process as an investor. I find the larger platforms do a great job of providing regulatory information for both investors and founders so digging into the FAQ section will provide some deep practical insights into the process. If you enjoy the process begin looking for your place in the industry connecting with the platforms and securities attorneys to learn that aspect of the business.
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How might regulated investment crowdfunding evolve in 2023?
It is difficult to predict exactly how regulated investment crowdfunding will evolve in 2023, as it depends on a variety of factors such as changes in the regulatory environment, technological developments, and market trends. However, here are a few potential developments that could shape the future... more
It is difficult to predict exactly how regulated investment crowdfunding will evolve in 2023, as it depends on a variety of factors such as changes in the regulatory environment, technological developments, and market trends. However, here are a few potential developments that could shape the future of regulated investment crowdfunding:
1. Increased use of blockchain technology: Blockchain technology could potentially be used to streamline the crowdfunding process, making it faster and more secure.
2. Development of new regulatory frameworks: Governments around the world may develop new regulatory frameworks to address the unique challenges and opportunities presented by crowdfunding.
3. Growing popularity of alternative forms of financing: Crowdfunding may become more popular as an alternative to traditional forms of financing, such as bank loans or venture capital.
4. Increased competition: As crowdfunding becomes more popular, more platforms may enter the market, leading to increased competition among platforms.
5. Greater focus on investor protection: As the industry evolves, there may be a greater focus on protecting the interests of investors, including through the use of measures such as disclosure requirements and investor education.
Overall, it is likely that regulated investment crowdfunding will continue to grow and evolve in the coming years, with a focus on using technology to improve the efficiency and effectiveness of the process.
*Written by OpenAI's ChatGPT*
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What are the three types of crowdfunding?
There are three main types of crowdfunding:
1: Rewards-based crowdfunding: This type of crowdfunding involves individuals contributing money to a project or business in exchange for a reward, such as a product or service, rather than a financial return on their investment.
2: Donations-based crowdfu... more
There are three main types of crowdfunding:
1: Rewards-based crowdfunding: This type of crowdfunding involves individuals contributing money to a project or business in exchange for a reward, such as a product or service, rather than a financial return on their investment.
2: Donations-based crowdfunding: This type of crowdfunding involves individuals donating money to a cause or project without receiving any financial return on their investment.
3: Equity-based crowdfunding: Also known as regulated investment crowdfunding, this type of crowdfunding involves the sale of securities, such as stocks or bonds, to raise capital for a business or project. Investors receive a financial return on their investment, either through the sale of their securities at a later date or through the receipt of dividends or interest.
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What are the estimated costs to run different types of crowdfunding campaigns (e.g. Reg CF vs Reg A+) etc.? What are the estimated costs to run different types of crowdfunding campaigns (e.g. Reg CF vs Reg A+) etc.?
Hi Manny this is a great question
we have a detailed on how much companies should budget for RegA+ for USA and Canada based companies
https://www.koreconx.com/what-is-estimated-budget-for-rega-issuance/
... more- Regulations & Compliance
- Reg A+ Fundraising Platform
- Cap Table Management
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What is the difference between donations crowdfunding and investment crowdfunding?
Donations-based crowdfunding and investment crowdfunding are two different types of crowdfunding. In donations-based crowdfunding, individuals make contributions to a project or cause without expecting anything in return, other than the satisfaction of knowing they have helped support something they... more
Donations-based crowdfunding and investment crowdfunding are two different types of crowdfunding. In donations-based crowdfunding, individuals make contributions to a project or cause without expecting anything in return, other than the satisfaction of knowing they have helped support something they care about. In investment crowdfunding, individuals invest money in a project or venture with the expectation of receiving a financial return on their investment. *Written by OpenAI's ChatGPT*
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What is the Howey test?
The Howey test is a legal test used to determine whether an investment contract exists and, therefore, whether certain securities laws apply. The test is named after a U.S. Supreme Court case called SEC v. W.J. Howey Co., in which the Court set out a four-part test to determine whether an investment... more
The Howey test is a legal test used to determine whether an investment contract exists and, therefore, whether certain securities laws apply. The test is named after a U.S. Supreme Court case called SEC v. W.J. Howey Co., in which the Court set out a four-part test to determine whether an investment contract exists.
The four elements of the Howey test are:
- There is an investment of money.
- The investment is made in a common enterprise.
- There is an expectation of profits from the investment.
- The profits are to be derived from the efforts of others.If all four elements are present, the investment is considered to be an investment contract and is subject to securities regulation. The Howey test is used by the U.S. Securities and Exchange Commission (SEC) to determine whether a particular investment is a security and whether it must be registered with the SEC. The test is also used by the courts to determine whether a particular investment is a security and whether it is subject to securities laws.
*Written by OpenAI's ChatGPT - Not Legal Advice*
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Is it possible for a company like North Capital to offer the infrastructure for a white label ATS?
North Capital does operate an Alternative Trading System that allows clients to leverage our API technology in order to create their own Order Management System (OMS). We have a few clients that implement our secondary services through their own user interface by integrating with our API solution. Y... more
North Capital does operate an Alternative Trading System that allows clients to leverage our API technology in order to create their own Order Management System (OMS). We have a few clients that implement our secondary services through their own user interface by integrating with our API solution. You can always reach out to a North Capital representative in order to discuss in more detail.
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What is the difference between rewards crowdfunding and investment crowdfunding?
Rewards-based crowdfunding and investment crowdfunding are two different ways that people can use crowdfunding platforms to raise money for a project or venture. In rewards-based crowdfunding, backers of the project receive a reward, such as a product or service, in exchange for their support. In in... more
Rewards-based crowdfunding and investment crowdfunding are two different ways that people can use crowdfunding platforms to raise money for a project or venture. In rewards-based crowdfunding, backers of the project receive a reward, such as a product or service, in exchange for their support. In investment crowdfunding, backers receive equity in the company or a financial return on their investment.
*Written by OpenAI's ChatGPT*
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Why is FINRA the entity responsible for granting Reg CF portal licenses?
The Financial Industry Regulatory Authority (FINRA) is responsible for regulating the securities industry and overseeing broker-dealers in the United States. Part of this responsibility includes granting licenses to firms that want to operate as crowdfunding portals under Regulation Crowdfunding (Re... more
The Financial Industry Regulatory Authority (FINRA) is responsible for regulating the securities industry and overseeing broker-dealers in the United States. Part of this responsibility includes granting licenses to firms that want to operate as crowdfunding portals under Regulation Crowdfunding (Reg CF), which is a set of rules issued by the U.S. Securities and Exchange Commission (SEC) that allows small businesses to raise capital from a large number of investors through the internet. Because Reg CF is a federal regulation, it is up to FINRA to ensure that firms seeking to operate as crowdfunding portals meet the necessary requirements and are in compliance with the rules set forth by the SEC.
*Written by OpenAI's ChatGPT*
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Could AI have an impact on the field of investment crowdfunding?
Yes, it is possible that AI could have an impact on the field of investment crowdfunding. AI can be used to process large amounts of data quickly and accurately, which could be useful for analyzing potential investment opportunities and making predictions about their success. Additionally, AI could ... more
Yes, it is possible that AI could have an impact on the field of investment crowdfunding. AI can be used to process large amounts of data quickly and accurately, which could be useful for analyzing potential investment opportunities and making predictions about their success. Additionally, AI could be used to automate many of the tasks involved in managing a crowdfunding campaign, such as identifying potential investors and tracking progress toward fundraising goals. However, it is also important to consider the potential drawbacks of using AI in this context, such as the potential for bias in decision-making and the need for effective regulation to protect investors.
*Written by OpenAI's ChatGPT*
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