Since the passage of the JOBS Act and the subsequent rulemaking, there has been massive confusion by the general and investing public who often conflate the activities of the regulated investment crowdfunding industry and those of rewards-based or donations-based crowdfunding platforms. Aside from marketplace confusion, there is considerable reputational risk that regulated entities, and the regulated industry as a whole, face by being mistaken for the activities happening in a less regulated environment and by unlicensed actors (e.g. GoFundMe, Kickstarter, IndieGoGo).

Furthermore, while admirable, the efforts by some industry participants to provide clarity through use of other terms (e.g. “online capital raising,” “investment crowdfunding,” or “equity crowdfunding”) are insufficient or, in some cases, potentially misleading.   

By embracing ‘Regulated Investment Crowdfunding,’ we not only clarify our industry's scope but also underline the legal and regulatory frameworks that govern our operations. 

The statement that "investment crowdfunding is for companies who can't raise elsewhere" is largely inaccurate. In fact, investment crowdfunding has become an increasingly popular alternative financing solution for businesses of all sizes and stages of development. Many startups with solid business plans are now turning to online investor platforms as a viable way to save costs, attract more investors that can become customers ("investomers"), and build recognition in the marketplace.

It's true that investment crowdfunding can provide vital capital investments for companies with limited resources or access to banks or venture capitalists and it's also a viable way for established businesses to bypass traditional methods and raise funds with greater speed and efficiency.

For brands that rely heavily on their fans for success or for loyal customers to make repeat purchases, I predict that within 20 years, investment crowdfunding will become THE key competitive lever to building customer loyalty.   

To become a crowdfunding funding portal under the JOBS Act, an entity must register with the Securities and Exchange Commission (SEC) as a "funding portal" and comply with certain regulatory requirements. Here are some of the key requirements:

1: Registration: The entity must register with the SEC as a funding portal by filing Form Funding Portal and must become a member of a national securities association (currently FINRA - the only game in town). Form Funding Portal requires information from the funding portal applicant, including information about the funding portal's business, principals, control relationships, and employees. See: https://www.sec.gov/tm/divisionsmarketregtmcompliancefpregistrationguidehtm

2: Restrictions on Activities: Funding portals are limited in the types of activities they can engage in. For example, they are prohibited from offering investment advice, soliciting transactions, or handling investor funds or securities. They may provide limited communication channels for issuers to communicate with potential investors, but all communication must be conducted through the portal and must be accessible to all investors. IMHO, some restrictions may be tighter than they should be given the capabilities of harnessing the crowd with technology.

3: Investor Protection: Funding portals must take steps to protect investors, including verifying the identity of each investor and limiting the amount of money each investor can invest in a given offering. They must also provide investors with educational materials and warnings about the risks of investing in crowdfunding offerings. It's important to remind investors at every turn that investing is risky - and they can lose all of their investment. Unlike the world of crypto where FOMO is the key selling point, this is REGULATED INVESTMENT CROWDFUNDING so education, disclosures, and caution is warranted.  

4: Disclosure Requirements: Funding portals must provide certain disclosures to investors, including information about the issuer, the terms of the offering, and the risks involved in investing in the offering. They must also provide ongoing updates about the issuer and the offering. When in doubt, build disclosures throughout your platform's workflow.

5: Record keeping and Reporting: Funding portals must maintain records of all transactions conducted through the portal and provide certain reports to the SEC.

Compliance with these requirements is essential for a crowdfunding funding portal to operate legally under the JOBS Act. It is important to note that these requirements may be subject to change as the SEC continues to learn from the experience of industry stakeholders and develop its regulatory framework for crowdfunding offerings.

n...@...l 

Thanks for the great question. With nearly 90 FINRA regulated funding portals and thousands of broker dealers all eligible to facilitate issuers for their crowdfunding raises, you aren't alone in looking for deals that meet certain characteristics (e.g. impact investments). Luckily, there do exist aggregators that collect data about live offerings and sort them into categories. 

KingsCrowd is one such aggregator and you can find companies with live offerings that they've sorted as having "Social Impact" by clicking on this link: https://kingscrowd.com/companies/search/?social_impact=true&status=Active I believe they have a team of analysts that tag issuers with certain labels to make them easier to sort. 

Another place where you can learn more generally about companies operating at the intersection of impact investing and crowdfunding is at the SuperCrowd conference where companies, including impact companies with live offerings, pitch, present, and discuss case studies. It's a major gathering of leaders in this sector and you can find more info here: https://thesupercrowd.com

#impactinvesting #socialimpact @Devin Thorpe @Brian Belley 

Yes, there are websites and companies that aggregate crowdfunding deals that are active (as well as other types of deals).

Some of these primary deal aggregators include:

1. KingsCrowd ("Trusted by over 475,000 investors to vet startup investments from 60+ online investment platforms")

2. so.capital ("Equity Crowdfunding, Donation Crowdfunding, NFTs, Alternative Assets")

3. Vincent ("exempt reporting adviser in the alternative investment space")

4. CrowdLustro ("Reg CF, Collectibles, Real Estate, NFTs, & other alternative assets")

5. Alts.co ("alternative assets" -- more than just crowdfunding)

6. Sharky - ("Discover startups like a pro!")

7. Investibule - ("Investibule opens the door to community investments - aggregating opportunities across 30+ platforms.")

For those looking for deals outside the US, there are other aggregators (e.g. CrowdInvest - "Invest in promising start-ups in India from the UK"). As with any service provider, it's important to verify information listed on these sites with information on the site of the funding portal or provided by the issuer. 

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. 

In the short run, probably not too much. In the longer term, I hope so. There's too much attention on #VCs and how they fuel innovators. Moving forward, at $5 million per raise (per YEAR), Reg CF crowdfunding is poised to fuel more start-ups, be more efficient, and be more founder-friendly than VC investors. 

Don't get me wrong, if you are on the inside track with a VC, stay in that club. They like to pick winners (ie. bet on their friends) and it's not too hard to check the boxes that will free up capital. But for the other 99.95% of founding teams, it's time to take a careful look at crowdfunding. Not rewards or donation based crowdfunding - this isn't a bake sale - but regulated investment crowdfunding. VCs may still co-invest with your crowd -- and the smart ones will start seeing a crowd-raise as market validation. After all, most VCs are just taking the crowd's money through their LP structure anyway. Now the crowd can cut out the middleman.  

Some stats relevant to VCs and startups that every founder show know: 

1. 77% of small businesses rely on personal savings for their initial funds.
2. A third of small businesses start with less than $5,000.
3. The average small business requires about $10,000 of startup capital.
4. Only 0.05% of startups raise venture capital.
5. The average seed round is $2.2 million.
6. The median company running a seed funding round is 3 years old.
7. Of startups that raised seed rounds, 1% reached unicorn status of $1B+ valuation.
8. Startups with two co-founders rather than one raise 30% more capital.

(Source: https://www.fundera.com stats from 2020). 

Given that the average VC seed round is $2.2 million and that the cap on Regulation CF is $5 million PER YEAR, will a founding team want to spend their time chasing lots of VCs trying to get $2.2 million or does it make sense to convince a broad group of strategic investors / early customer adopters to invest early and continue investing as the company hits key milestones? I’m putting my bet on the crowd over VCs. Every prospective customer you get to invest has the potential to serve three objectives:

1. investment capital;  

2. revenue; and 

3. as an enthusiastic "ambassador" or marketing champion of your company.  

Today, VCs are somewhat spoiled with no shortage of quality deal flow – so as the compelling value proposition of crowdfunding becomes better known, VCs will need to differentiate and compete for the same early-stage deals. This is going to change their primary function from being filter bubbles (I’m sure many would argue with this characterization of their role) to providing something value-added, beyond just the capital, to founding teams.   

Crowdfunding won’t take off overnight because there’s still a lot of issuer and investor education that needs to first happen [see the Crowdfunding Professional Association’s (CfPA) and the Crowdfunding Ecosystem for experts, events, and companies that can help with knowledge resources] but in the long run, I expect we’ll all see crowdfunding as the leading method for early phase capital formation and VCs will have to adjust.  

Crowd1 has nothing in common with crowdfunding except for the word "crowd."  Crowd1 presents itself as a high-tech crowd marketing business but they offer a range of dubious products while promising significant returns to its “members.” It has super slick videos and deploys viral marketing packages and they promote themselves with a Yoda-inspired slogan, "impossible is nothing."

Crowd1 is a classic pyramid scheme that has made a fortune for a handful of European scammers (including Renze Deelstra, Johan Von Holstein and Jonas Werner) but it has left a trail of debt and poverty in countries across the developing world and especially in the African countries of South Africa, Kenya and Nigeria. To learn about the ugly deception under the shiny surface of Crowd1, watch the BBC expose by BBC documentary by journalist Ayanda Charlie:  https://www.youtube.com/watch?v=M0EjjArvzXA If you don’t have time to watch the full video, you can read about it here: https://gadgets-africa.com/2020/11/02/crowd1-pyramid-scheme-collapses