Investment Crowdfunding Is a Powerful Tool for Building Local Capital
Posted at Mar 29
This post was originally shared on Superpowers for Good.
Regulated investment crowdfunding is a powerful tool for building local capital in your neighborhood or town.
There are three perspectives I’ll discuss here:
Community leader perspective
For clarity, whenever I talk about crowdfunding today, I’ll be referring to the regulated investment crowdfunding on websites like Wefunder, Republic and Start Engine—and dozens of others. I’m not talking about GoFundMe or even the popular rewards crowdfunding sites Kickstarter and Indiegogo.
That said, there may be no better way for an entrepreneur to prepare for an investment crowdfunding round than to conduct a rewards campaign. We’ll talk about that another day.
Investor Perspective on Building Local Capital Via Crowdfunding
RegCF raised $1B dollars, so what?
Posted at 10/29/2021
Greetings Crowdfunding Community!
Two quick notes:
- I bumped into Sean O'Rielly from KingsCrowd yesterday and was telling him about when Kickstarter (launched in 2009) broke $1B dollars in rewards based crowdfunding pledges in 2014. Why that is important is because as of July 2021 Kickstarter has received more than $59B in pledges. You can see their full stats here: https://www.statista.com/statistics/310218/total-kickstarter-funding/
- Which brings us to point number two. As you may have read courtesy of Woodie and Crowdfund Insider, RegCF recently broke the $1B mark for funds raised. You can read about that here: https://www.crowdfundinsider.com/2021/10/182167-reg-cf-investment-crowdfunding-tops-1-billion-on-heals-of-funding-cap-increase/ Meaning that from 2016 to Q3 2021 RegCF has raised over $1B in funding.
Now, this is important for a number of reasons. Not just that because year to date, as of Q3 2021, ~$409M has been raised from 1,177 individual offerings. This is a ...more
How to determine your funding options
Posted at 10/23/2021
To crowdfund or not to crowdfund?
The biggest paradigm shift in capital formation, post pandemic, is that every level of Investor and Founder has pivoted head on into #crowdfunding.
COVID19 forced Angels, VCs and Institutions online, ushering in a new era of FinTech adoption within capital formation. What was that fintech adoption? Platforms.
While the platforms have different regulatory requirements depending on the type of Crowd they're pursuing, they've all moved to digital platforms to facilitate funding.
GPs crowdfund for Funds from LPs on social media and private platforms, very similar to how Founders crowdfund for startup funds on social media using RegCF funding portals.
As Founders this is important for you to be aware of because regardless of The Crowd you're pursuing (VC, Angels, or Retail Investors) you'll be doing that online. So! If you have to pitch and pitch on online platforms, don't just pitch to a small audience. Pitch to the largest crowd you can get!
And that is t...more
The top 5 reasons every Founder should be crowdfunding.
Posted at 6/30/2021
By Samson Williams
- Investment crowdfunding enables you to set terms on your terms
- 60% of investors in crowdfunding campaign are already accredited
- Crowdfunding platforms make managing your cap-table and communicating to investors easier
- Increase in sales revenue while running your investment crowdfunding campaign
- 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
The State of The League Is Strong
Posted at 5/18/2021
Regulation Crowdfunding turned five years old on May 16, 2021 and celebrated its birthday with 63 FINRA licensed portals and over $700M raised via RegCF. This is an amazing milestone for the investment crowdfunding industry and what I refer to as "The League”. The League is the 63 and counting FINRA licensed Funding Portals. Even today, there are another two dozen entities with Funding Portal applications with FINRA looking to join the league and 2022 is shaping up to be a $1B year. On behalf of the Crowdfunding Professional Association we are rooting for all of you.
As I think about the state of the Crowdfunding industry and the individual funding portals I often compare them to the National Basketball Association (NBA). That league started off small, hit an inflection point and then grew into the dynamic global presence it is now. So too with the 63 “teams” of the CfPA. To that end here is a peak of what the Crowdfunding Professional Association will be doing to help the ...more
Understanding Accelerator & Funding Portal Partnerships
Posted at 4/25/2021
- Accelerators & Incubators will partner with FINRA approved Funding Portals (aka Crowdfunding Platforms)
- Because the real value is in getting Founders/Businesses "Business Ready"
- Founders will not benefit from this partnership and will opt to skip the Incubators and Accelerators going directly to crowdfunding platforms.
Hello Beautiful People! Recently you may have seen how YCombinator put 40 of their Startups onto the WeFunder platform. Which was an inevitable step in the evolution of crowdfunding. On YCombinator's side it was them opening the gates to a Trojan horse of epic size. How is that? I'll explain in the following bullets.
A natural partnership - Accelerators/Incubator and Funding Portals
In all truth I don't actually know what the difference is between an incubator and an accelerator. Yes, I could google it but that would be like googling "What is the Yellow Pages?" At any rate, in my head accelerators and incubators help Founder...more
How to raise your first $107k in investments
Posted at 1/7/2021
How to raise your first $107k in investments - The beauty of RegCF Investment Crowdfunding
The first dollar is always the hardest. Whether you’re trying to earn it, generate revenue or raise it. It all starts with Dollar One. And, knowing that you're a busy Founder, CEO or CFO so I’ll save you a long read and just let you know the following 3 facts:
- It costs you sweat, creativity and drive to raise your company’s first $107k using RegCF.
- After the first $107k, it will cost you about 10% of your goal to try and raise your desired amount. Most of that goes towards marketing.
- If you hit your $107k, you can amend your filing and continue to raise money just like these Founders did:
- At Ease Rentals ($303k raised from 295 investors)
- Cornbread Hemp ($492k raised from 870 investors)
But don’t take my word for it. Listen to this interview with Jim Higdon, Chief Communications Officer of CornBreadHemp to learn more about how Cornbread Hemp used RegCF to raise thei...more
Is crowdfunding a good fit for my business?
Posted at 8/10/2020
Q: Is Crowdfunding a good fit for my business?
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