7 Tips for Businesses to Prepare for Title III

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BY Judd Hollas, Founder & Chief Inventor, EquityNet The  industry is gaining serious momentum, and with the implementation of Title III of the JOBS Act coming up next year, entrepreneurs will soon have many more options when it comes to fundraising. Title III will allow many Americans who are not considered high-net-worth individuals to invest in private small businesses and startups to own a percentage of those companies. This is going to give entrepreneurs a much larger selection of potential investors than ever before. It’s anticipated that Title III won’t come into effect until sometime next spring, but proactive entrepreneurs can take action now to be prepared to leverage this new law when it gets passed. 1. Assess your need to utilize Title III Fundraising needs vary depending on a company’s industry and Title III will put certain rules in place that some entrepreneurs may find cumbersome. Under the Title III exemption, funds raised from all types of investors will not be able to exceed $1 million in a 12-month period. This might be suitable for entrepreneurs looking for capital in the six-figure range, but those seeking larger investments will need to be willing to launch multiple fundraising campaigns. […]

7 Tips for Businesses to Prepare for Title IIICrowdFund Beat.

 

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RetireAmerica.com Announces Launch

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2013 /PRNewswire/ — RetireAmerica.com announced today the launch of its web-based capital protected equity crowdfunding portal. The launch is in beta form and is intended to become fully functional by year-end. Empowering Entrepreneurs, Protecting Investors, Creating Jobs. RetireAmerica.com (www.retireamerica.com) announced today the launch of its crowdfunding portal which will offer investors the opportunity to make equity investments in early stage companies through its unique financing structure that combines capital protection with an equity investment. Initially, investments on the platform will be limited to accredited investors, but will be expanded to non-accredited eligible investors following full implementation of Title III of the JOBS Act.

Steve Colmar, RetireAmerica.com’s CEO stated, “Everyone knows that early stage investing is risky. Our mission has been to develop a product that opens up investment opportunities in early stage companies to investors who want to minimize their risk of loss. And now the crowdfunding revolution has arrived, making equity investments in early-stage companies available to countless new investors through groundbreaking social media outlets or portals. But despite its transformational influence on capital markets, crowdfunding hasn’t solved how to reduce the risk of loss of capital in early stage investments. The RetireAmerica.com product addresses this problem through our unique capital protected structure. Our protection feature allows the investor to protect some or all of his or her investment, and, in some cases, to redeploy non-risk capital at the investor’s discretion by converting it into additional equity.”

“We believe our capital protected product, with its unique conversion feature, is advantageous for both parties to the investment equation. For the entrepreneur, it provides a ready pool of capital to further their growth plans. And for the investor, it provides an opportunity to protect capital and to make additional incremental investments if and when it suits their individual risk profile.”

For More information, go to http://www.retireamerica.com

About RetireAmerica.com
RetireAmerica.com is an Austin Texas based company. Developed by Business Ventures Corp. of Austin, TX and Santa Barbara, CA. Accredited investors interested in RetireAmerica.com’s capital protected investments are invited to visit http://www.retireamerica.com and register as users of the site. Registration is free, giving investors access to our investment opportunities and important updates regarding RetireAmerica.com. Entrepreneurs with companies looking for capital are encouraged to submit their company for consideration.

SOURCE RetireAmerica.com

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Lessons for Entrepreneurs from Crowdfunding

There is a lot of buzz out there these days about crowdfunding. As Kauffman Dissertation Fellow Ethan Mollick at the University of Pennsylvania’s Wharton School puts it, “Crowdfunding has been drawing substantial attention from policy makers, managers, and entrepreneurs, but relatively little notice from academics, even though it touches on many topics of importance to scholars of entrepreneurship.”

His paper from last July, “The Dynamics of Crowdfunding: Determinants of Success and Failure” (available here), examined almost 47,000 projects on Kickstarter that raised a combined revenue of $198 million. Mollick concluded that several factors influence whether a project will succeed or not:

  1. The greater the size of the founder’s social network, the greater the chance for success (particularly Facebook in this case; this is also known as the ‘be popular’ strategy).
  2. The underlying quality of the projects – those with high-quality, polished pitches are more likely to be funded (e.g., use a video; as Kickstarter’s website states, “Projects with videos succeed at a much higher rate than those without.”).
  3. A strong geographic component tie-in seems to increase success (pitching country music in Nashville, film in Los Angeles, etc.).
  4. A shorter Kickstarter duration is better (35 percent chance of success for 30-day pitches, 29 percent for 60-day pitches). Mollick noted that a longer duration implies a lack of confidence in the project’s success.
  5. Being highlighted on the Kickstarter website is hugely beneficial (89 percent chance of success vs. 30 percent for unfeatured projects).
  6. A large number of creative individuals in the city where the project is based is associated with greater success (target these kinds of people).

Geographic Distribution of Projects by Success

Success by Geographic Area
The circles on this map represent counts of Kickstarter projects by city; the larger the circle, the more projects based in that area. The shading within the circle reflects the portion that were successful—dark green represents successfully funded projects while light green indicates the project was not funded. Based on Mollick’s research, odds are that the successfully funded projects in given cities were a good fit culture-wise for that city.

 

How to Pick A Crowdfunding Consultant

Editor’s Note: The following comes to us from Rose Spinelli, founder of The CrowdFundamentals, a crowdfunding consultancy. Spinelli offers newcomers some tips on how to choose a crowdfunding consultant that’s right for them. The original piece appeared on Spinelli’s blog, and we are reposting it here with her permission. Be sure to follow The CrowdFundamentals @TCFRose.

As trends go, crowdfunding is a toddler: all fired up and streaked with independence, in constant motion and grabbing at any shiny object put in its path, wobbly but growing more confident each day. If crowdfunding were a tactile thing, les enfants terribles would take a bite out of you.

But crowdfunding is not so new that it hasn’t birthed its own progeny—the crowdfund consultant. (I am referring to donor- and reward-based crowdfunding since, to push my metaphor one image too far, equity crowdfunding remains in a protracted period of gestation.) You could argue that the nature of crowdfunding defies such conventional paths, that part of its appeal is that every individual now has the tools and the potential audience to find her own way to success, middlemen be damned. Yet it’s a career track that’s found a foothold, and by the looks of the roster of individuals and companies identifying themselves as such, in my own niche capacity myself included, there are no signs the trend will slacken.

The truth is crowdfunding done well is really hard. It takes a diverse skill set. Creative types, who are big users of this new source of capital, are often weak on the communication, marketing and business end of things. Just scour a popular platform and you’ll see projects with great potential that don’t achieve their goal simply because they don’t know the space well enough to leverage it.

It also takes time to learn how to be successful at crowdfunding. Six months is a reasonable learning curve. Creators would rather be working on their art, innovators are immersed in inventions, and entrepreneurs seem to run on fumes as it is. So there is a need, and the vacuum is filling up, fast.

In an industry so untested, how is an individual or startup supposed to know whom to hire? Just saying you’re an expert doesn’t make it so. Since I spend an ungodly amount of time on the topic, I thought it would be helpful to share some tips I’ve picked up along the way. And since it would defeat the purpose to limit it to just one opinion, I contacted some of my colleagues, with whom I’ve formed a virtual salon on various LinkedIn crowdfunding groups, and asked them to weigh in.

Here’s what’s come of my research:

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UK’s Crowdfunder and Peoplefund.it Merge

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United Kingdom (Photo credit: stumayhew)

A spot of consolidation in the crowded crowdfunding space today — which is surely ripe for plenty more convergence in the future. Two U.K. crowdfunding platforms, Crowdfunder andPeoplefund.it, have announced plans to merge, combining their technology and marketing platforms, branding, and teams to create a single entity with “its own distinct British and community feel,” the pair said. Combined they have more than over half a million unique monthly users and more than 20,000 registered users.

The move follows U.S. crowdfunding platform Kickstarter’s launch of U.K.-based projects back in October — which makes the ‘game of scale’ even more important for local platforms. “The merger of Crowdfunder and Peoplefund.it makes a huge amount of sense for UK projects that need funding,” said Crowdfunder founder Darren Westlake in a statement. “It will deliver scale, expertise, and marketing reach — essential for those projects who want the best funding platform possible.”

Peoplefund.it co-founder Simon Deverell also noted the arrival of crowdfunding’s ‘big fish’ into the U.K.’s small pond — but talked up the potential to add local flavour, noting in a statement: ”The international arrivals into the UK market are fantastic news as they grow and validate the market, however Peoplefund.it has a distinctly U.K. feel in line with our culture. It’s more local and community connected. It’s a great platform for entrepreneurs, socialpreneurs and civic-preneurs who want to make a difference. Peoplefund.it seeks to remodel the relationship between communities and UK enterprise – one street at a time.”

Plymouth-based Peoplefund.it started life last year as a way for charities to raise money before opening its arms to entrepreneurs. It was launched by celebrity cook Hugh Fearnley-Whittingstall’s digital media company, KEO digital, and is backed by Plymouth University’s Enterprise Accelerator Partnership. Earlier this year Peoplefund.it gobbled up an arts-focused U.K. crowdfunding platform, called WeDidThis. It has also partnered with a UK book crowdfunding platform Unbound to add another string to its project’s bow. Peoplefund.it’s network reach is pegged at more than 2 million, owing to cross-promotion from other KEO digital sites, such as rivercottage.net,fishfight.netlandshare.net and energyshare.com.

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Forbes Article On Crowdfunding Explosion in 2013

Read this article on Forbes today. Very well written and accurate:

The world of entrepreneurial finance is changing rapidly; we are at a tipping point that will make what seems like a vibrant part of our global economy today seem small in one year’s hindsight.

Whether you are a service provider, social entrepreneur, angel investor, venture capitalist, or one of the millions of people ready to become a small-scale start up financier, it is time to pay attention.

Estimates for annual crowdfunding transactions go as high as $500 billion annually compared to 2011’s $1.5 billion (anticipated to be $3 billion in 2012).  If crowdfunding even begins to approach that scale, it will completely change the landscape for start-up financing.

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Adult Content Crowdfunding Platform – www.adultxfund.com

Do you need an adult content friendly crowdfunding platform? Well a new site at http://www.adultxfund.com/ has just gone live and is specializing in adult initiatives and is backed by GrowVC:

AdultXfund is a place where companies can offer equity for investment in their adult business and projects – a network that’s dedicated to adult industry entrepreneurs and investors, bringing sexing and interesting projects to new partners, and to helping its members realise their full potential.

Backed by Grow VC, entrepreneurs and funders can have the confidence that the tools and support teams are in place to make sure that everything is secure and reliable.

I know there are or will be others and I will report on them just as I do the non-adult platforms and I fully expect that other niche markets will be seeing their own platforms pop up as the crowdfunding platform market reaches saturation point.