2018 CfPA Chairman's year-end address
Wednesday, January 9, 2019
Dear members, friends and colleagues,
Unlike students “getting back to school” each fall, the best work of our association’s many volunteers tends to commence at the start of each new calendar following a frenetic year-end rush both professionally and personally. So, welcome back—I hope your 2018 was prosperous, and your holiday break inspirational and renewing.
Before outlining our goals for 2019, I need to first thank and congratulate all for a pivotal year that commenced with the necessary and successful recruitment of what many have confessed to me is an enviable assembly of alternative finance pioneers and thought leaders—over 34 remarkably generous board members, advisors and committee members, tripling all previous leadership. I am humbled to have gained your mindshare and commitment toward pursuing the CfPA’s noble mission. However, I emphasize “toward” because, as an organization, our ultimate fulfillment remains just over the horizon—we have much to...more
Why Reg.A is the Superior Crowdfunding Choice over Reg.D or Reg.CF
Despite being around for years now, there’s still major confusion from issuers regarding the benefits and drawbacks of Regulation A (Reg.A), Regulation CF (Reg.CF), and Regulation D (Reg.D) crowdfunding offerings. What option is right for you? In this podcast, Mike Brette, the CEO and Founder of Small Cap Equity Advisors goes over why he believes Reg.A is the superior choice in most instances, plus provides advice as to what issuers should be doing (and what they shouldn’t be doing as well) in order to achieve a successful capital raise.
Reg.A, Reg.D, Reg.CF… What’s best for you and/or your company? And how much will it all cost you? Based on the reasons Mr. Brette provides in this podcast – both pro and con, he makes a strong case that regardless of the size of your raise, you should strongly consider the Reg.A option right from the start.
Restricted stock, “dead money”, valuation determination, accreditation of investors, liquidity issues, possible advertis...more
Calling All Social Entrepreneurs: Urgent Reminder
COVID Relief Easing Certain Crowdfunding Rules Ends on August 28!
This week, I’m traveling to Puerto Rico to cover the Bluetide Caribbean Investment Summit for Impact Entrepreneur Magazine. (See a related story here.) As a result, I didn’t have time to produce a podcast for today’s newsletter. I’ll also be sharing the podcast I would typically share on Thursday on Friday—it’s a special one.
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Big News! I’ve confirmed with the smartest people I know that an important bit of COVID relief expires on August 28, 2022. If you are a social entrepreneur looking to change the world for good, read on!
One of the biggest barriers to investment crowdfunding is the requirement for financial disclosure. Under the rules that return to full effect on August 28, you must provide financial statements reviewed by an auditor if you hope to raise more than $107,000. An auditor must complete a review before the offering can begin. And it is pricy. A review can easily cost $10,000.
If you raise mor...more
Stop Launching Crowdfunding Portals
Dear Future Lords of Venture Capital,
Stop launching RegCF crowdfunding portals.
Morning Beautiful People! That sentence is the TLDR version of this article. The next line is, “Partner with existing portal owners as the hardest part of crowdfunding is the crowd.”
The three reasons why you should partner with an existing RegCF portal vs building your own are:
Affinity Crowd - you’ve never heard of that portal because in 2016 Founder’s egos imploded it before it even got off the ground. That lesson in why entrepreneurship is so hard I only recommend it to my enemies, cost me a mere $500k. Fortunately, since I’ve paid that iron price you don’t have to. Learn from my mistakes, don’t repeat them.
$3M for 18 months of runway. If you try to launch your own RegCF crowdfunding portal it’ll cost you at least $3M. I know. I know. No one believes this number. Download this excel sheet and play with the numbers and remember, if you’re only charging 3% to 8% of the rais...more
When it Comes to Investment Crowdfunding - Compliance Matters!
What to Know Before You Take the Plunge
The investment crowdfunding marketplace is growing faster than ever before, and is projected to grow by $196.36 billion from 2021 to 2025.
Unfortunately, industry watchers have observed an alarming level of non-compliance with the most basic rules of Regulation Crowdfunding by both companies raising capital and the platforms hosting the campaigns.
Non-compliance can result in regulatory enforcement action and/or investor lawsuits. So if you’re considering dipping a toe into the crowdfunding world, compliance should be at the top of your list.
In 2016, the SEC completed its rulemaking process for Regulation Crowdfunding. It suddenly became possible for a business to list an investment offering on a platform, and anyone in the United States could invest in the offering. But before doing that, the business, as well as the platform, must comply with some basic rules of the road.
According to a recent analysis, only a small minority ...more
