Are Current Debt and Revenue-Share Interest Rates Fair for Investors?
While many investors typically feel that debt deals are “lower-risk” than equity deals in investment crowdfunding, I’ve always wondered if that’s really the case. As investors, we have plenty of options for where to put our money — like zero-risk savings accounts at banks currently offering 4.6% or even 5% interest! So, I decided to dig into the data on debt and revenue-share offerings to see if the interest rates are actually compensating investors for the risks they’re taking.
Required annual interest rates and payback multiples over 6.4 years for investors holding a diversified portfolio of debt and revenue-share Reg CF deals to break-even after accounting for failures and risks.
...moreTLDR: to adequately compensate Reg CF investors for risk and opportunity costs, we estimate that the current average debt interest rate should be roughly 11.1% on pre-revenue deals and 10.2% on post-revenue deals. For revenue share notes, the break-even payback mu
KingsCrowd and Radivision® Partner to Support New Startup Funding and Private Market Investing
KingsCrowd
San Francisco, CA (June 12, 2024) Radivision® and KingsCrowd today announced a strategic partnership to give retail investors the tools they need to participate in the growing private markets while delivering a new funding source to startups. This collaboration unites Radivision’s strengths as a streaming and social platform that connects retail investors to startup content and opportunities with KingsCrowd’s unparalleled expertise in private market data and analytics.
The partners’ shared mission is to demystify private market investing and give more people the confidence to participate in startup wealth creation, which has outperformed the public markets by 70% or more for most of the past 25 years. This is an especially vital need today. Shifts in the public markets since 1998 have disenfranchised Main Street investors while funneling outsized gains to the largest players, contributing to the widening wealth divide in the U.S. Radivision will soon offer its members the ability ...more
Crowdfunding From A Data Driven Perspective
When you want to dive deep into the effectiveness of crowdfunding, you go to the guys who wrote the book on it – or at least helped in getting the legislation passed. In this podcast, Woodie Neiss, a partner at Crowdfund Capital Advisors, explains how his company is taking a data-driven approach to equity crowdfunding and explains how investor sentiment has taken crowdfunding from a unknown concept to a $2.5 billion dollar industry!
Listen to "Crowdfunding From A Data Driven Perspective" on Spreaker.
Listen to this podcast as Mr. Neiss talks about how he has created a database on every single company that's raising money online via equity crowdfunding and the impact AI will have in the future - and that includes all the different options these companies have at their exposure thanks to the Jobs Act.
Why is this important? Because there are thousands of companies going the crowdfunding route and before his research, there really wasn't any source that accurately measured the digital foo...more
[CfPA Press Release] CfPA Announces Board Approval of Policy Platform
Crowdfunding Professional Association (CfPA)
Industry trade group representing the Regulated Investment Crowdfunding industry releases major policy platform with recommendations for change
Washington, DC (May 20, 2024) - The Crowdfunding Professional Association (CfPA), the leading trade group representing the Regulated Investment Crowdfunding industry, announced the board's approval of a Policy Platform containing eighteen recommendations for the industry. Through these recommendations, the CfPA intends to advance the fledgling industry, which has enabled over 6,500 companies to raise more than $2.4 billion from millions of non-accredited investors in the eight years since the industry's rules came into effect.
"The CfPA Policy Platform represents the concerns and interests of a wide range of stakeholders in the Regulated Investment Crowdfunding industry," stated Brian Christie, the 2024 President of the CfPA. “Broad adoption of the platform’s recommendations by industry participants, regulators, and lawmakers...more
Why I Support the SEC's Tentative Plan to Raise a Key Crowdfunding Threshold
An SEC Committee Voted to Recommend Raising the Trigger for Reviewed Financial Statements from $124,000 to $350,000
I’m not a financial advisor; Superpowers for Good should not be considered investment advice. Seek counsel before making investment decisions.On Monday, the Securities and Exchange Commission’s Small Business Capital Formation Advisory Committee, a key organization within the financial market’s regulator, voted to recommend raising the threshold for requiring reviewed financial statements under Regulation Crowdfunding from $124,000 to $350,000. Let me explain why I enthusiastically support that recommendation!
What Is a Reviewed Financial Statement?
One of the pernicious problems associated with reviewed financial statements is that the name “reviewed” fails to describe what it is to anyone but a CPA. It sounds a bit like I’ve handed my financial statements to an auditor and asked them to peruse them and then stamp them “reviewed.” That is completely wrong!
Essentials to Know When Marketing a Reg A or Reg CF Capital Raise
The Reg A & Crowdfunding Conference
Regulation A (Reg A) and Regulation Crowdfunding (Reg CF) offer alternatives to traditional financing such as bank loans, venture capital, or initial public offerings (IPOs). While traditional financing typically involves stringent eligibility criteria, a lengthy approval process and substantial fees, Reg A and Reg CF provide greater flexibility for raising capital.
- Marketing a Reg A or Reg CF capital raise involves understanding the target audience, crafting compelling messages, and utilizing multiple channels such as social media, email campaigns, and press releases
- Compliance with SEC regulations is crucial for issuers, including adherence to advertising restrictions and providing accurate and comprehensive information about the offering
- The Reg A & Crowdfunding Conference 2024 hosted June 20 by DealFlow Events promises to deliver valuable insights on marketing strategies, deal activity projections, IP protection, and more
- Companies actively considering Reg A or Reg CF may qual
Grateful for the super people at SuperCrowd24
On behalf of the Crowdfunding Professional Association (CfPA), I would like to express gratitude to @Devin Thorpe and @Chandan Saha for providing CfPA with the opportunity to co-host SuperCrowd24 and for giving the CfPA board and members the opportunity to share their perspectives and expertise and to connect with a community of attendees from all over the world. The event was highly engaging and informative (-- and provided a welcome diversion following the end of this year’s tax season).
The agenda was packed, the speakers were amazing, and the topics were relevant across a wide range of themes. Personally, I was pleased to hear numerous discussions about the possible integration of regulated investment crowdfunding into the full capital stack of various businesses -- from small enterprises seeking SBA loans to major corporations managing complex divestitures – as it points to a future where crowdfunding and community-ownership could be an important pro-social subs...more
SuperCrowdBaltimore
SuperCrowdBaltimore, the event you've been waiting for, is now on March 21, 2024. Learn from top-notch speakers and network with industry experts.
Use code "CfPA" for 30% off your ticket!
Register here: https://thesupercrowd.com/supercrowdbaltimore
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