While the costs of preparing an offering under Reg CF are significantly lower than other types of securities offerings, they can still be expensive in terms of professional and marketing fees prior to having any sense of whether the offering will be successful. The SEC heard the complaints from issuers on this point and have adopted a testing the waters provision that is substantially similar to that used in Reg A.

Under new Rule 206, issuers contemplating an offering under Reg CF may make written or oral offers to test the waters (“TTW”) prior to filing a Form C. Once the Form C is filed, the offering is live and no more TTW can be done. There is no restriction on the content of TTW communications, as there are for solicitations after the Form C has been filed under Rule 204(b), however, any TTW must include a legend containing the following:

(1) That no money or other consideration is being solicited, and if sent in response, will not be accepted;

(2) That no offer to buy the securit...more

Friday, September 11, 2020

Dear friends,

I am hopeful that my letter to you all today, of all days, will shine a ray of light through what has been an otherwise dark year for many Americans. Between the tragedy of a global pandemic needlessly costing countless people their lives, and the financial hardship that many families are just beginning to feel, we find ourselves at an unimaginable intersection where guidance, faith and endurance will determine our path forward, our collective future.

Unlike many addresses you may have endured in the past, this one will not pander nor preach. Instead, it will restate our promise, illustrate our achievements, and outline our plans in hopes that it will inspire you to take action in support of a higher mission we’re all familiar with—a more perfect union.

I present this letter as a partner in the unifying mission of personal, professional and communal success only made more attainable by the vision, labor and commitment of the many volunteers that...more

Q: Is Crowdfunding a good fit for my business? 

A: Always. 

I often get asked, “ Is crowdfunding a good fit for my business?” The answer is 100% of the time “Absolutely”. Why is pretty simple and straightforward and we’ll outline the why investment crowdfunding is suited for your business below. 

Funding Your Business - Knowing Your Options

Bank Loans. Traditional means of funding your business include bank loans and other forms of financial instruments that your bank offers. However, for many businesses banks are not your friends. While it’s true you can get a loan or business line of credit when you’re cash flow positive and don’t need them, securing a business loan or line of credit when you need it (e.g.: pre-revenue) is nearly impossible. If you can get a bank loan then why use crowdfunding? You’re right. Good luck meeting the bank’s underwriting requirements. Eve...more

Three steps to improve your fundraising odds by using Triangle Financing & Investment Crowdfunding. 

By Samson Williams & George Pullen 

Raising money for any business is hard. Raising money for Space / Aerospace businesses is even more challenging. Even when you have the investor network, stellar product and the stars in your favor, things can still go - well as things go in entrepreneurial endeavors. Despite the difficulties in raising money, new and emerging ways of finding, tapping into and receiving funding have emerged, not only for Space based ventures but also the terrestrial based ones. What are these new ways of raising money? Well, outside of Venture Capital, Private Equity and Banks what are your funding options when you want to: 

• Start a business
• Scale an existing business
• Run a profitable business  

Whether you think of yourself as an Entrepreneur, Small Business Owner, Founder or just a...more

The buzz in the investment crowdfunding industry these days is all about when will the SEC increase the funding limit of JOBS Act Crowdfunding (aka equity crowdfunding) from $1.07M dollars to $5M. Rumor has it that there has been a flood, a FLOOD, of RegCF platform applications in anticipation of the $5M limit increase. Why is raising the maximum that a business can raise under RegCF rules to $5M so important? It’s not. 

I know you’re busy so I’ll leave you to consider the following reasons why a $5M limit is misleading and the basis for the most abusive bit of narrative economics within the crowdfunding industry, the random investor limits on retail investors.  

By “increasing” the limit to $5M it reinforces the idea of unaccredited vs accredited investors. Meaning, “unaccredited” and “accredited” investors are randomly manufactured designations that predate nearly everyone reading this except Irwin Stein, t...more

On July 16, 2020, Republic will officially launch its sale of the Republic Note profit-sharing token at a price of $0.12 per Note token. Accredited investors will be able to purchase the tokens under Reg D on July 16, while non-accredited investors will have to reserve their allocation of tokens and wait until the approval of the Reg A offering later this year.

While there is no arguing that Republic's Note token is innovative and pushing the industry forward, everyone has been asking me one question over the past few weeks. Is the Republic Note token a good investment? 

While this article is not investment advice and investors have different goals and risk tolerances, we will attempt to provide an independent analysis of whether the $0.12 per Note price is fairly valued or not for investors. We will perform a Discounted Cash Flow (DCF) analysis for optimistic, typical, and pessimistic scenarios to arrive at a rough valuation range for the Republic Note token.

To download a copy o...more

I recently joined the board of directors of the Crowdfunding Professional Association.  The board asked me to draft a letter to the Securities and Exchange Commission requesting emergency temporary relief from the onerous requirements under Regulation Crowdfunding to prepare reviewed financial statements.  We submitted the letter on April 7.

To our surprise, the SEC released emergency temporary rules on May 4.  The key provisions are:

• financial statements do not need to be prepared to launch a campaign (but investment commitments cannot be accepted until the financial statements are provided)
• the amount you can raise without having to prepare reviewed financials has been increased from $107,000 to $250,000

These temporary rules apply for Regulation Crowdfunding campaigns started between now and August 31, 2020, and the issuer must have been organized and operating for at least six months.

If you’d like to take advantage of these temporary rules, please contact me at in...more