In the dynamic realm of crowdfunding, different models have emerged to cater to different fundraising needs. However, a common pitfall lies in the tendency to conflate "donations crowdfunding," "rewards crowdfunding," and "regulated investment crowdfunding." While these models share a common term - “crowdfunding” - they are very different and serve distinct purposes. 

Donations Crowdfunding is typified by platforms like GoFundMe and involves raising funds for personal causes without an obligation to provide a product. Someone has a hospital bill and they appeal to donors. “Donors” not “Investors.” In other words, there is not the expectation or obligation of a “return” of any kind with donations crowdfunding. 

Rewards Crowdfunding is a popular model exemplified by platforms like Kickstarter and Indiegogo and it allows creators to pre-sell a product or service to backers. “Backers” not “Investors.” In other words, contributors or backers receive tangible rewards in return for ...more

Increasingly, companies are turning to Regulated Investment Crowdfunding as a strategy to raise capital and convert their customers into investors or “investomers” as many have coined the phrase. As companies consider this business strategy, it’s important they understand the concept of Lifetime Value (LTV) and its impact on Enterprise Value (EV). LTV, short for Lifetime Value of a Customer, quantifies the total revenue a business can expect to earn from a single customer throughout their entire relationship with the company. EV, on the other hand, represents the total value of a business, including its debt and equity. These crucial metrics help businesses assess their long-term profitability and overall worth.

Investment Crowdfunding is not only a way to enhance LTV but also a way to drive up EV.  I recently read a white paper by the company Dealmaker entitled “The Bottom-Line Value of Turning Customers into Shareholders” which cited research and s...more

The DeRosa Group is a family-owned business that invests in residential and commercial properties, with a mission of "Transforming Lives Through Real Estate." It was founded by Matt and Liz Faircloth in 2004. Their journey began with the purchase of a modest duplex just outside of Philadelphia, fueled by a $30,000 private loan. Since then, they have mastered the art of optimizing properties for their highest and best use, revolutionizing single-family homes, multi-family residences, apartments, mixed-use spaces, and retail outlets, as well as offices. This interview was conducted with Herve Francois.

INTERVIEW

Cost of Investor Acquistion

Creating institutional capital investment pools with funding portals is hugely important. Honeycomb Credit has trailblazed that with a foundation. You can go to pension funds, banks, insurance companies, credit unions, etc with these kinds of proposals. Point to HoneyComb's success story, differentiate your portal.

Side-note: would love to start seeing partnerships between niche portals.

If you aren't ready to do that yet, and are starting off with founders in your direct network, I would fill your relevant social media channels (that you send to people) with accessible and engaging demos of your product from the investor's perspective. Of course, content for business owners is important too... but think about it this way: fundraising businesses will be sending your social media content to their investors as to explain how the process is going to go.

Educational content on why your niche and portal serve a critical need. Explain to investors, why their investm...more

Disclaimer: (1) the issuer is considering an exempt offering, but has not decided upon any particular exemption; (2) the issuer is not soliciting any money or other consideration and, if sent, will not be accepted by the issuer; (3) the issuer will not sell securities or accept commitments to purchase securities until the issuer decides on which exemption it will pursue and satisfies any required filing, disclosure or qualification requirements; and (4) all indications of interest made by solicitees are non-binding.

To calculate Global #TotalAddressableMarket, we needed to understand how much Raiseway will charge users in each country.

We developed a global parity-pricing model to figure that out.

According to our most recent calculations, our yearly Annual Recurring Revenue (ARR) in the US will be $575, accounting for churn.

(^This isn't exactly right, we need to update the model. When we do, the TAM numbers will move by a n million, not sure which direction. 🤡 )

Dear colleagues at Crowdfunding Professional Association and beyond. We all love saying that the industry is doing great.

Math says "that's bs; CF industry is broke and dealflow is the problem." I am using funding portal data because transparency is forced upon these intermediaries.

Please don't shoot the messenger. I would like to be proven otherwise.

There are 70,000 startups in the United States within 33,000,000 small businesses. How many active Regulation Crowdfunding deals are there right now? 450.

Let's say that the average salary for a portal employee is $75,000 ($6 250 per month). Sounds like an OK living in the U.S. (unless you are in New York, San Francisco, Los Angeles, etc).

I went onto each of their LinkedIn pages and counted the number of employees. I assumed - rather generously - on average, only 50% of these "employees" are paid. The rest are advisors, investors, partners, etc.

I tried to count how much money each of the platforms will have left after receivi...more

The investment crowdfunding landscape can be confusing.

And one of the main reasons it's so confusing is because many of the key terms and labels were created by lawyers and legislators, who aren't really known for their ability to keep things simple. 

That means navigating and deciphering the nearly inscrutable alphabet soup of the relevant crowdfunding regulations, rules, laws, and requirements is about as much fun as …. well, navigating and deciphering an alphabet soup of laws, rules, and regulations.

So before trying to parse the fine print of crowdfunding regulations, here’s some overall context that should help.

In 2012, the Jumpstart Our Business Startups Act (get it? “JOBS”? Isn’t that clever…) was signed into law, and it did two important things:

1. Amended the Securities Act of 1933 (that's the set of laws passed after the 1929 stock market crash)
2. Required the SEC to update several of its Regulations

It’s helpful to think about crowdfunding regulations...more