- Devin Thorpe
Champion of Social Good
The Super Crowd, Inc., a public benefit corporation,
Salt Lake City, UT
Formerly a congressional candidate, Forbes contributor covering social entrepreneurship and impact investing, passionate about crowdfunding.
crowdfunding nonprofit social entrepreneurship impact investing philanthropy fundraising corporate social responsibility CSR
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Devin is a bestselling author who ran for Congress in 2020. He calls himself a champion of social good. As a new-media journalist and founder of the Your Mark on the World Center, Devin established himself as a champion of social good. As a Forbes contributor, with over 500 bylines and over two million unique readers, he became a recognized name in the social impact arena. His Your Mark on the World show, featuring over 1,200 celebrities, CEOs, billionaires, entrepreneurs—including Bill Gates—and others who are out to change the world, gave him a recognizable face as well.
He has helped nonprofits raise millions of dollars via crowdfunding. He twice hosted a 24-hour livestream via YouTube on #GivingTuesday, featuring more than 90 interviews with nonprofits.
Previously, Devin served as the CFO of the third-largest company on the 2009 Inc. 500 list. He also founded and led a FINRA-registered investment bank. After completing a degree in finance at the University of Utah, he earned an MBA from Cornell University.
Having lived on three continents and visited over 40 countries on six continents and with guests from around the world on his show, Devin brings a global perspective on purpose-driven leadership to international audiences–from the UN to Nepal–empowering them to do more good and make their mark on the world. These lessons also enable them to change their personal lives and to drive positive change within their organizations. His books provide roadmaps to audiences on how to use money for good. His books have been read over 1 million times!
Today, Devin channels the idealism of his youth, volunteering whenever and wherever he can, with the loving support of his wife, Gail. Their son, Dayton, works in San Francisco. Frequently finding himself on airplanes, he is glad to be middle-seat-sized.
Where should I incorporate a benefit corporation?
When setting up a business entity in the past, I've typically just registered an LLC in my state as I haven't intended to raise equity. One exception where I did raise money, I incorporated a C-Corp in Delaware. I was quite unhappy with my experience registering and maintaining an entity there. I hired a well-respected agent to help me and felt I got jerked around more than supported. I am considering a crowdfunding raise for a social enterprise. If I want to form a benefit corporation and raise money via Reg CF, where do you recommend I register? Delaware or my home state of Florida? Elsewhere?
@Brian Belley, @Jenny Kassan and @Sara Hanks, I wonder if you have thoughts about where to incorporate a benefit corp.
This is a great question! @Brian Belley recently told me that the average investment via Reg CF is about $750. That suggests there is some room to budget for marketing. On the other hand, investors plopping down $100 leave very little room. I hear ranges of from 10 to 30% for marketing budgets. Using 20% against the average of $750 would suggest the cost of investor acquisition is $150--far more than a common $100 minimum investment. I hope Brian or others can add more color to this conversation.
Many cryptocurrencies are issued with the clear intent to grow in value against the USD. That intent creates a valid question about whether the investment is a security. Other tests can easily allow a reasonable regulator to conclude a security is in play.
Devin Thorpe replied:
Impact crowdfunding is what is happening at the intersection of investment crowdfunding and impact investing.
As you know, investment crowdfunding was authorized by the bipartisan 2012 JOBS Act. It was initially implemented in 2016 with a $1 million cap, which was increased to $5 million last year. The space is mushrooming quickly.
Impact investing is less well known to our community but is a bigger global phenomenon dominated by wealthy families and institutions. They invest money for a financial return and a social mission. For instance, a venture capitalist backing Tesla in the early days would describe herself as an impact investor. She got a huge financial return and radically accelerated a transition to electric vehicles.
Investment crowdfunding allows for impact investing in the crowdfunding space. I call that impact crowdfunding.
SuperCrowd22 is a conference we're holding on September 15-16, 2022, to help everyone learn more about the space, both from an investor standpoint and from a social entrepreneur standpoint.
Don't miss it!
This is a great question!
You should expect to spend about 10 percent of the money you raise on the costs of the offering, excluding marketing. I'd caution against spending money on marketing but remember it will take a lot of work.
Some legal and accounting costs will have to be paid before you can begin raising money. That would typically be at least $5,000 and could easily total 3 to 5 percent of the offering, depending on your circumstances.
The portal will also charge fees. They vary in structure and size but expect to pay 5 percent or more.
Many people believe, I say correctly, that one day soon, we'll use blockchain to record title to all manner of physical or tangible objects, from boats and cars to real estate. The immutable, public nature of blockchain would be perfect for this purpose.
The trick will be for the blockchain community to fully embrace the regulatory and governmental aspects of legal ownership of non-digital assets.
I love crowdfunding because it helps people who traditionally have had trouble accessing capital. Women and BIPOC founders now have a new path to funding. Small businesses that are integral parts of a community, like restaurants, can now raise money from their customers. Our country is richer because of crowdfunding and getting richer every day.
Jordan, this is a great question. Thanks for coming to the CfPA Ecosystem for insights.
Of course, there is no industry or sector that can be thought of as traditionally raising money via crowdfunding. The industry is too new, implemented just six years ago and really gaining scale only in the past two years. We're all learning.
There is no reason you can't crowdfund for a gold mining operation. Obviously, this is a great time to be investing in gold.
FINRA-registered portals are required to do some screening to prevent fraudsters from attempting to raise money on their platforms. Portals are allowed to do some additional screening to curate a theme. They are not allowed to imply that they have done thorough underwriting of an offering. Broker-Dealers, like Start Engine, that operate portals are allowed to do more and charge more than the other portals, including offering more help raising money.
Some platforms focus on serving small business, real estate, tech or other niches. While I haven't spotted a portal focused on extractive industries, one may exist. However, you can test out the large players (Wefunder, Republic and StartEngine) where you are most likely to find admission.
You want to remember that there is no magic crowd; the money you raise will come from your networks primarily.
Devin Thorpe replied:
Crowdfunding is a tool for solving some of the world's biggest problems. It is frequently used as a tool for financing investment in solutions to climate change. More directly, it serves to fight social inequities, providing female entrepreneurs with fairer financing terms and access to capital. It has the potential to do the same for minorities.
Devin Thorpe replied:
Great question. I'll substitute the word "crowdfunding" under the meaning given by the SEC in Regulation Crowdfunding (Reg CF) for the word "fundraising" in your question as I suspect that is the import of your question.
Facebook would be radically different if it had been financed in its earliest days by hundreds of college students instead of by venture capitalists. It would have led to a more user-focused rather than advertiser-focused platform because the users would be owners.
I'd like to think we'd have all the best parts of Facebook without the worst parts.
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