Are Current Debt and Revenue-Share Interest Rates Fair for Investors?

Brian Belley Brian Belley
Posted at Jun 24

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.

TLDR: 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

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Categories: Investor Education  |  Reg A+  |  Reg CF
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KingsCrowd and Radivision® Partner to Support New Startup Funding and Private Market Investing

KingsCrowd
Posted at Jun 12

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

Categories: Investor Education  |  Reg CF
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Grateful for the super people at SuperCrowd24

Brian Christie Brian Christie
Posted at Apr 19

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

Categories: Impact Investing  |  Investor Education  |  Issuer Education  |  Reg A+  |  Reg CF  |  Regulations & Compliance
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Dive into the World of Crowdfunding Excellence with SuperCrowdHour February 2024!

Chandan Saha Chandan Saha
Posted at Feb 18

Attention all crowdfunding enthusiasts and aspiring changemakers! The highly anticipated SuperCrowdHour event for February 2024 is just around the corner, and we couldn't be more thrilled to welcome you!

Countdown Begins: With the event date fast approaching, mark your calendars for February 21, 2024, at 1:00 PM Eastern. Get ready to dive deep into the world of crowdfunding excellence!

https://www.youtube.com/watch?list=TLGGSFSdz8WDyigxODAyMjAyNA&v=HoQyB5CFHLA

Meet the CFPA Leaders: Join us as we host the esteemed Crowdfunding Professional Association (CFPA) leaders:

  • Brian Christie, CFPA President
  • Jenny Kassan, CFPA Vice President
  • Brian Belley, CFPA Secretary
  • Scott McIntyre, CFPA Chair

What to Expect: Gain exclusive insights, connect with industry experts, and learn how you can make a difference in the crowdfunding community. SuperCrowdHour is your gateway to unlocking new opportunities and achieving crowdfunding success!

Special Incentive: Remember, attendees who register for an...more

Categories: Investor Education  |  Reg A+  |  Reg CF
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Join me in the Inaugural Cohort for the Qualified Accredited Investor Certification

Andrew Savikas Andrew Savikas
Posted at 9/27/2023

I wanted to share an interesting new program that I recently learned about - the Qualified Accredited Investor (QAI) certification from Doriot Venture Labs and IU Kelley School of Business.

The goal of this new certification is to evaluate an individual's expertise in venture capital and startup investing. It involves passing a FINRA exam and completing an investment simulation. Notably, this program is under review by the SEC to establish itself as a viable alternative to the traditional wealth-based Accredited Investor standard.

QAI has the potential to help level the playing field in the venture world. As the program materials mention, currently the top 20% most knowledgeable investors receive 80% of the gains. QAI could help provide a way for more people to demonstrate their sophistication.

I'm such a strong believer in what Doriot Venture Labs is doing that I invested in the company, and I'll also be participating in the first cohort for the new QAI certif...more

Categories: Investor Education  |  Regulations & Compliance
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How funding portals can reduce CAC & CIC:

Peter Rostovsky Peter Rostovsky
Posted at 8/14/2023

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

Categories: Equity (RIC)  |  Featured  |  Funding Portals  |  Impact Investing  |  Investor Education  |  Issuer Education  |  Reg CF  |  Regulations & Compliance
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How we calculated Raiseway's Global Total Addressable Market

Raiseway
Posted at 7/28/2023

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. 🤡 )

 

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Categories: Accounting  |  Impact Investing  |  Investor Education  |  Issuer Education  |  Reg CF  |  Regulations & Compliance
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Decoding the Alphabet Soup of Investment Crowdfunding

Andrew Savikas Andrew Savikas
Posted at 6/6/2023

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

Categories: Investor Education  |  Issuer Education  |  Reg A+  |  Reg CF
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