This post was originally shared here by Devin Thorpe

Recently, the Crowdfunding Professional Association issued a list of policy positions taken by its Board of Directors. I’m proud to serve on the Board. We started work on this official set of recommendations last year while I served as President. Crowdfunding lawyer Jenny Kassan has led the effort from its beginning. CfPA President Brian Christie now champions the policies.

Under Brian’s leadership, the CfPA will be hosting a Summit in Washington, DC, on October 22nd and 23rd. The first day of the event will be devoted to meetings with policymakers in their respective offices. We’re targeting meetings in four different Congressional offices, along with meetings with the Securities and Exchange Commission and the Financial Industry Regulatory Authority (FINRA). Conference registrants will be invited to participate in the meetings they choose.

Drawing on my personal experience working on Capitol Hill, I’ll lead the team meetings there.

The policy positions are intended to make small offerings easier and more affordable, enhance disclosure requirements to benefit both issuers and investors and create tax incentives for investors, benefitting small businesses.

What follows is my take on several of the policy recommendations that I find especially important and personally champion.

Reform of Requirements for Financial Reporting

The reporting requirements for Regulation Crowdfunding offerings are remarkably complex. Offerings up to $124,000 require certified GAAP financial statements. Offerings up to $1,235,000 require a financial review (much more formal and expensive than that word implies), and those above $1,235,000 require a formal audit. There is no exemption for newly formed businesses with no operating history.

The CfPA is recommending three key changes, all of which I support strongly:

1. Raise the $124,000 to $250,000. The CfPA has informally expressed support for the Securities and Exchange Commission’s Small Business Capital Formation Advisory Committee’s proposal to raise that threshold to $350,000. I’ve previously expressed my support.

2. Allow Tax Return Disclosure. Rather than require small businesses to prepare a new set of financial statements based on GAAP, CfPA recommends allowing them to disclose the tax returns they are already required to prepare. This eliminates the need to pay to have a second set of financial statements prepared. This is consistent with the SBA’s requirements for small business loans.

3. Exempt Newcos from Financial Statement Requirements. A rather obvious step for simplifying offering requirements and reducing expenses will be to eliminate the need for newly formed businesses to provide financial statements, regardless of the scale of the offering. The CfPA and I support this change.

These changes would have a rather dramatic impact on the cost of and time required for a Reg CF capital raise. This will benefit both entrepreneurs and investors. When issuers save time and money on a raise, it is easier to raise more money and increase the chances of success, benefiting investors, too.

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This post was originally shared here by Devin Thorpe

Today, I’m going to dig into a fairly nuanced area of crowdfund investing. If you’d like to make more money with your money by investing directly in private companies—and who doesn’t—please invest the time to learn more about SAFEs.

What Is a SAFE?

A SAFE is a Simple Agreement for Future Equity. The idea gained traction after the prestigious Y-Combinator accelerator began using a standard form of the instrument for its early-stage Silicon Valley startups.

The Securities and Exchange Commission published this definition with an embedded caution:

A SAFE is an agreement between you, the investor, and the company in which the company generally promises to give you a future equity stake in the company if certain trigger events occur.  Not all SAFEs are the same and the very important terms governing when you may get the future equity may vary across the SAFEs being offered in different crowdfunding offerings.  Despite its name, a SAFE may not be “simple” or “safe.”

Note that the emphasis is in the original document.

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https://www.youtube.com/watch?v=7FkBk9KlRJM

Explore transforming your community connections into capital to start or grow a small business through regulated investment crowdfunding. Learn more about how this type of crowdfunding works and the benefits and challenges of raising capital from the crowd.

About Presenter: Author and journalist Devin Thorpe has over 25 years in finance and a rich background as a former CFO and investment banking firm founder. He’s also a champion for social good, publishing his Superpowers for Good newsletter and show.

https://www.youtube.com/watch?v=7FkBk9KlRJM

Angela Barbash of Revalue Is Featured Today at the Monthly SuperCrowdHour Webinar—Don't Miss It

Live YouTube Link: https://www.youtube.com/watch?v=wOGsms6oeNY

Today, at 1:00 Eastern, Angela Barbash will be our SuperCrowdHour webinar expert. She is a financial planner who helps people move their financial assets from traditional places to local investments. Today, she’ll tackle “Overcoming Challenges When Moving from Wall Street to Main Street.”

You can watch the webinar right here in the YouTube video player above or join us in Zoom. We track attendance in Zoom and reward those who attend ten times with a $100 reimbursement for a crowdfund investment. Those participating via Zoom can also ask Angela questions! Join us there to claim your reward.

Angela Barbash

Angela is a mom, anthropologist, entrepreneur, and an unabashed challenger of the status quo. She has dedicated 20 years in service as a values-driven investment advisor in the Metro Detroit region, including founding Revalue as a values-driven investment firm in 2013, and was one of the first to obtain the Chartered Sustainable Responsible Impact Investing Counselor (CSRIC) designation in the U.S. Angela has contributed countless hours to field building, public education, and infrastructure development to help build a more empathetic finance industry. You will often find her educating on the topics of financial resiliency, community capital, and conscious business management.

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We are thrilled to announce the upcoming edition of SuperCrowdHour, scheduled for April 24th, 2024, at 1:00 PM Eastern Time. As always, we are dedicated to bringing you insightful discussions and expert perspectives on topics that matter.

Event Details:

Event Name: SuperCrowdHour April 2024

Date and Time: April 24, 2024, at 1:00 PM Eastern Time

Place: Online

Topic: "Contributing to Positive Peace Through Impact Crowdfunding"

Host:

• Devin Thorpe

Panelists:

• Chip Hauss
• Emily M. Evans
• Nick Zuroski

This edition of SuperCrowdHour will delve into the transformative potential of impact crowdfunding in fostering positive peace. Our esteemed moderator, Devin Thorpe, will guide us through insightful discussions with our expert panelists: Chip Hauss, Emily Evans, and Nick Zuroski. Together, they will explore how crowdfunding initiatives can contribute to building a more peaceful and sustainable world.

How to Participate: Participating in SuperCrowdHour is simple:

1. Register: Secure your spot by registering for the event here.
2. Mark Your Calendar: Set a reminder for April 24th, 2024, at 1:00 PM ET.
3. Join the Discussion: On the day of the event, log in to the virtual platform using the provided link.

Special Reward: As a token of appreciation for your commitment to learning and engagement, we are excited to offer a $100 reward to those who register for and attend ten SuperCrowdHour webinars. Don't miss this opportunity to expand your knowledge and contribute to positive change.

Join us for an enriching conversation on April 24th as we explore the intersection of crowdfunding and peacebuilding. Together, let's harness the power of collective action to create a brighter future for all.

Upcoming SuperCrowd Event Calendar

If a location is not noted, the events below are virtual.

• Impact Cherub Club Meeting hosted by The Super Crowd, Inc., a public benefit corporation, on April 23, 2024, at 1:00 PM Eastern. Each month, the Club meets to review new offerings for investment consideration and to conduct due diligence on previously screened deals. Everyone is welcome to join these free events.
• SuperCrowdChicago, June 12, 2024. This in-person event at Columbia College Chicago features some of Chicago’s prominent citizens and community leaders, along with crowdfunding experts. Use the discount code “SuperCrowd” to save 30 percent!
• SuperCrowdHour, April 24, 2024, at 1:00 Eastern. We’ll talk with Chip Hauss and other peacebuilders about the role of investment crowdfunding in community building.
• Recently, we created an AI GPT to help you learn more about The Super Crowd, Inc., a public benefit corporation, and our upcoming events. Click here to try it.