When it Comes to Investment Crowdfunding - Compliance Matters!

Jenny Kassan Jenny Kassan
Posted at 8/13/2021

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

Categories: Featured  |  Funding Portals  |  Regulations & Compliance
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Crowdfunding works best with Marketing

Samson Williams Samson Williams
Posted at 7/21/2021

Crowdfunding doesn't actually raise you money, marketing does. Gotta market your deal. 

Every Founder is looking for the same thing a) Customers b) "the right investor". You achieve both through marketing. Because at the end of the day its up to YOU to let the world know your business exist, what your vision for it is and how they're going to benefit from supporting you as either a customer, an investor or as an #Investomer.

To be clear, #crowdfunding doesn't HELP you raise money. It ENABLES you to raise capital from all levels of investors from VCs, Institutions, Angels and Retail Investors. It is still up YOU to market your deal, regardless of which type of investor you're looking for.

Hence another reason George Pullen and I are so pumped about GoingPublic.com as it is a marketing (and Distribution) engine for startups.

So, if you want to increase your odds of success for your funding campaign (RegCF, RegA or RegD) remember to be ready to tell your story and market your ass off...more

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What is the best place to launch a crowdinvesting product?

Samson Williams Samson Williams
Posted at 7/12/2021

Question from Aaron:

Happy Sunday Samson! I’m definitely enjoying and appreciating all your posts and article on the power of crowdfunding and crowdinvesting to help gain market share and loyal customers for the long haul. I had a question about the best place to launch a crowdinvesting product on a platform to gain the most views from future customers/investors, as I’ve been working on a project for the last year that revolves community development. I’d love to get your feedback and opinions on this at your best convenience if would be that great of a human! Thanks and happy Sunday! 😊

 

Answer from Samson
TODAYSamson Williams sent the following message at 8:52 AMView Samson’s profile Samson Williams  8:52 AM
 
 
Morning Aaron!

You have 3 options:  

  1. Book time on my calendar so for $500 an hour an I explain why it doesn't matter which platform you select here: https://www.milkywayeconomy.com/schedule-a-call
  2. Just take my word for it. 
  3. Stop believing platform
...more

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What are startup's options for securing $50k - $5M in financing?

Samson Williams Samson Williams
Posted at 7/7/2021

Generally it is assumed that the options for startups and businesses to pursue  financing are as follows:  

  • Option A - VCs
  • Option B - Angels
  • Option C - Broker Dealers / PE / Hedge Funds
  • Option D - Crowdfunding 

In truth the options are: 

  • Option A - Crowdfunding / Angels / VCs / BDs / PE/ Hedge Funds
  • Option B - Bootstrap then crowdfund


The reason that Crowdfunding is every startup’s first option is simple: 

  • Crowdfunding enables Founders to set investment terms
  • With these universal crowdfunding terms, Founders can solicit investments from investors at all levels (accredited, non-accredited, institutional)
  • Currently, Founders and Entrepreneurs exhaust themselves pitching to ONLY 4% of the accredited investor population; which is well known to have a 99% failure rate.
  • Less than 1% of Startups receive VC funding.
  • Crowdfunding enables Founders and Entrepreneurs to take the same pitch deck, due diligence, financials and disclosures and literally cast a wider net
...more

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The top 5 reasons every Founder should be crowdfunding.

Samson Williams Samson Williams
Posted at 6/30/2021

By Samson Williams

 

TL;DR

  1.    Investment crowdfunding enables you to set terms on your terms
  2.    60% of investors in crowdfunding campaign are already accredited
  3.    Crowdfunding platforms make managing your cap-table and communicating to investors easier  
  4.    Increase in sales revenue while running your investment crowdfunding campaign
  5.    Increase in the lifetime value of your customers, as Investomers

 

Any discussion about raising money should start off with the obvious. Raising money is hard AF and sucks. Too, there is no guaranteed way to raise capital for your business or startup. That said, if you are considering offering your Startup baby to Sharks for capital, here are a few things you should know about why Investment Crowdfunding should be your first option.

 

1.   Setting The Terms

So, you are looking to raise capital? But on whose terms? Yours? Or Sharks? The primary benefit of crowdfunding is that i...more

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Founders > Funding Platform Brand

Samson Williams Samson Williams
Posted at 6/22/2021

“Silicon Prairie is pushing the industry so that it is less about whose platform you use (because investors will go directly to the Founder’s “own” website) and more about the Founders/Issuers themselves. Which means, CF portals are headed to the plumbing side of things, a la Internet Service Provider (“ISP”).  No one cares who your ISP is and no one will care who provides their funding portal’s plumbing.”  Samson Williams, internal email on Silicon Prairie’s new “private portal” offering. 

Investment Crowdfunding turned 5 years old in May 2021. Why do you care about what this VC killing kindergartener is up to? Simple, the ability for Founders to raise up to $5M via RegCF is changing the culture, perception and reality of venture investing. How? This article will shed light on how and why this matters to you as a Founder, an Investor and more importantly as an Investomer. 

 

Founders are the Future of Funding 


Investment Crowdfunding is “new”. As such the...more

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Crowdfunding isn't static

Samson Williams Samson Williams
Posted at 6/22/2021

The key to understanding, appreciating and then monetizing the art of Regulation Crowdfunding is the realization that it's more art than regulations. What that means is: 

  1. There are no profitable funding portals
  2. Especially if the funding portals came into existence before 2019
  3. However, there is a new breed of funding portals that will be profitable by the end of 2021

The art of RegCF is that in order to reach the lofty goal of $5M there isn’t any single route. Yes, there are some guide rails but WHAT you do to raise your goal be it $5M or $50k is the fine art of strategy. HOW you execute that strategy is the dull nature of tactics. Why you care is because if you come from “traditional finance” your disadvantage is the speed at which innovation can occur, does occur and is pursued. 


Crowdfunding = Innovation


The sole reason that RegCF exists is because traditional finance and venture capital is broken. If VC funding worked so well, RegCF simply wouldn’t exist. It's not a deba...more

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VC's role in Crowdfunding

Samson Williams Samson Williams
Posted at 5/18/2021

Every health ecosystem needs top predators. Predators at the top of the food chain help maintain a healthy balance between species and environmental systems. We become keenly aware of this in the ocean when sharks are removed it causes an increase in red tides, toxic algae blooms and a general imbalance to the ecosystem. This effect is called "cascade" or marine trophic cascade when talking about the oceans specifically. However, the cascade can take affect in any environment. The thing about the ocean is that since we, meaning Humans, can't see the cascade directly its the classic "out of sight, out of mind" tragedy of the commons. To help make this more relatable to us land based a simpler example we can all probably relate to:  

  • There are more deer in the USA today than in 1800. 
  • Meanwhile, deer predators (bears, wolves, mountain lions etc...) populations have been reduced to critically low numbers.
  • The lack of predators keeping the deer population in check has incre
...more

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