Direct Public Offerings & Crowdfunding

A photo of the Bulgarian First Investment Bank...
A photo of the Bulgarian First Investment Bank from Sofia, 2006. (Photo credit: Wikipedia)

Obviously this is not our standard review style post, we believe that in order to keep ahead of the crowdfunding trend we must devote a section of our site to Direct Public Offerings (DPOs). Going forward we will be researching and reaching out to firms that provide services allowing small companies to raise capital form the public without the expense of a Wall St. investment bank.
Over the last 25 years Direct Public Offerings have ebbed and flowed in both quantity of offerings and success with which those offerings have been received. Our belief is that with the growth of social media, crowdfunding coming mainstream and the passing of the JOBs Act, Direct Public Offerings will finally get the recognition they deserve as a cost effective and democratic means of raising capital for small business.
Over the next few weeks we will be providing reviews of various DPO service providers. The combination of Direct Public Offerings and crowdfunding will in our opinion eventually be the “winner” from the JOBs Act by combining the established secondary markets with the cost effective benefits of an equity crowdfunding style platform hosted directly on the issuing companies website.

 

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Texas Crowdfunding Conference

The CrowdfundTX Conference featured an impressive assemblage of crowdfunding leaders from around the country. Organizer, Chris Camillo who sits on the board of the Crowdfunding Professionals Association, noted that bringing this group of “speakers together may never happen again.” The conference kept participants glued to their seats as real issues were discussed, leaving everyone feeling updated and excited about investment crowdfunding.

The top ten issues discussed at the conference were:

  1. Jobs: Investment crowdfunding was approved in 2012 when President Obama signed the JOBS Act into law; implementation still awaits regulations from the SEC and FINRA. The jobs, however, aren’t waiting. Heather Lopes, CEO ofEarlyShares, noted that the “JOBS Act has already created 1,500 to 2,000 jobs” from firms that have been launched to do investment crowdfunding and provide related services since the law passed. This represents a mere drop in the bucket compared to the potential jobs impact from unleashing investment crowdfunding, panelists suggested.
  2. Investment Crowdfunding: Perks or reward-based crowdfunding arguably goes back hundreds of years though its popularity on the internet goes back only about five years. Camillo noted that some companies can make little use of rewards-based crowdfunding, suggesting that a “If a physician has an idea for a new medical device, that is a better fit for equity.” Lopes also noted that the kindness that led to a New York community raising $75,000 to help a restaurant destroyed by Hurricane Sandy will also influence equity investments in crowdfunding.
  3. Race and Gender: Visiting one-on-one with Jonathan Sandlund of TheCrowdCafewhile being filmed for a segment in the upcoming documentary film Crowd of Angels, Sandlund agreed that crowdfunding would largely eliminate cultural biases observed in angel and venture capital financing, which are dominated by men making investments in businesses controlled by men. Crowdfunding deals go to women in the roughly the same proportion that women own businesses, according to The Crowdfunding Revolution. Sandlund expressed the belief that racial bias is also being eliminated by crowdfunding.  Rodney Sampson, author ofKingonomics, said, “If you don’t know what crowdfunding is, you can’t seek it out. We need an onramp of over-, over-education.” He added that for venture capitalists, crowdfunding “success will come first; race and gender will become secondary.”

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2012 Top Crowdfunded Projects In Review

Source: Crowdsource.org

YearInReview_FINAL1

In case you hadn’t heard, 2012 was the year that crowdfunding exploded onto the scene. Sure, KickstarterIndiegogoRockethub and others were around before this year, but the last 12 months saw the very concept permeate much deeper into the collective consciousness.

Numerous new platforms like WhenYouWish.com and niche platforms like Medstartr opened their doors, the JOBS Act in the US and other laws in Europe opened the door for equity crowdfunding, and donation-based campaigns began to collect seven-figure totals from the crowd.

To kick-off our year-end review of crowdfunding in 2012, our team profiled the five highest-grossing projects of the year. Lots of them have to do with gadgets and gaming, as you’ll see. I want to make it clear that these big money-makers are just a small slice of the overall crowdfunding pie, and we believe this top five reflects the fact that gamers and gadget early adopters have emerged as a kind of early “sweet spot” for donation-based crowdfunding. More about that in a massolution research report coming out soon.

It’s also important to note that there’s more exciting things happening across all crowdfunding platforms than we have time to cover. Many of them don’t bring in (or really even need) millions of dollars and don’t generate as many headlines. Rockethub, for example, has raised hundreds of thousands of dollars for important, science-based projects through its SciFund Challenge. Indiegogo has become the go-to place for instant fundraising in response to whatever is happening in the world, from the Connecticut school shooting to building a GoddamnTesla Museum or sending a bus monitor on a well-deserved vacation (or more likely retirement).

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Crowdfunding Industry Briefing

Crowdfunding Capital Advisors is proud to announce the first of a monthly series of Crowdfunding industry briefings on November 19, 2012.

Access to information is the difference between success and failure—this rings especially true in a nascent industry. In an environment where companies are making decisions based upon regulations that are not even written yet—up to date information and access to insiders will mean the difference between success and failure.  For those who wish to participate in crowdfunding this is of particular importance.

As the leading crowdfund analysis firm and the group at the center of the launch of this global movement, we are being asked on a daily basis for briefings on what is occurring at the highest levels of this global movement. In response to overwhelming demands, beginning November 19, the Principals of Crowdfund Capital Advisors will be launching a monthly briefing on the state of the crowdfunding industry. Here is the link: http://crowdfundingindustrybriefing.eventbrite.com/#

This briefing will provide information and behind the scene updates on:

  • Regulatory changes and updates on the status of the JOBS Act implementation.
  • A global update on regulatory occurrences—what other nations are doing and how to benefit from these changes.
  • Breaking news and data—CCA is a leader in crowdfunding research, all new data produced will be released at these meetings.  Participants will have early access to the full reports before anyone else. These surveys and peer reviewed research papers will give insight into the market data (that has be reviewed and verified by leaders in top tier institutions.)
  • Current industry analysis—no other organization has the view that the CCA team has. We are speakers at all of the major conferences, know all of the participants and see what is occurring from an insider’s perspective. These briefings will provide an overview of the industry with key insights on opportunities to benefit and other information that will give those interested in participating in crowdfunding a true competitive advantage.

This month will be one of our biggest updates. Over the last two months we have or will be:

  • Worked with leaders of the Italian government, entrepreneurial and investment communities. Italy legalized crowdfund investing on October 6, 2012.
  • Worked with leaders of the Colombian government, entrepreneurial, and investment communities.
  • Advised entrepreneurial, government and industry leaders in Canada regarding crowdfund investing.
  • Speaking at events at the White House, UC Berkeley and SEC.
  • Revealing original data on the size of the crowdfunding market.

Up-to-date information gives you the completive advantage you need to thrive in today’s market. Please join us for an in-depth look at the crowdfunding industry. To facilitate discussion during our Q&A period we will be limiting the number of seats for this virtual event.

Who Should Attend:

  • Crowdfunding Platforms
  • Crowdfunding Service Providers
  • Investment Industry Professionals
  • Governments exploring crowdfund investing initiatives
  • Investors seeking trends for identification of investment opportunities
  • Legal, Accounting, and other professional service providers looking to help clients with new information

Need original research?  The CCA team works with a number of organizations producing original reports, analysis, conducting independent crowdfund audits, and consulting services. For more information contact us at Richard@theccagroup.com.

Steve Case Hailed as JOBS Act Hero

Steve Case Hailed as JOBS Act Hero

April 6th, 2012 by Posted in AOLJOBS ActObamastartupSteve CaseWall Street Journal

On the heels of President Obama signing theJOBS Act (which loosens regulations on small businesses, making it easier for startups to grow), the Wall Street Journal published an article Thursday afternoon attributing much of the success of the bill to Steve Case, co-founder of AOL and venture capitalist.

Case co-chaired the National Advisory Council on Innovation & Entrepreneurship and was a member of the President’s Council on Jobs & Competitiveness.

“He’s really been pivotal in terms of being able to present a case for why we need this bill, why we need to get rid of red tape that’s blocking start-up companies to begin and to grow,” House Majority Leader Eric Cantor (R., Va.) told the Wall Street Journal.

Case wrote about the virtues and complexities of the JOBS Act, the goal of which is to “provide better access to capital for a wide range of companies, in a variety of sectors and regions – and provide new options for accessing capital at each stage of a company’s lifecycle,” he explained.

In his post, Case explained that startup growth has declined due to an inability to secure investors and funding. “But access to capital was critical,” his post says, “and that’s why I’ve spent time in recent months helping to build bipartisan support for the JOBS Act.”

[Image via whitehouse.gov]

Launcht CEO Freeman White to Speak on Crowdfunding Panel at NYU

On September 24, 2012, the Soho Loft, in conjunction with Douglas EllenoffGateTechnologies and Launcht, will present a roundtable discussion on Crowdfunding and the JOBS Act to entrepreneurs and academia at New York University.  Launcht CEO Freeman White, along with other experts in the field, has been invited to speak on the panel.  The panel discussion will address how entrepreneurs and investors can take advantage of the opportunities created by the new SEC regulations to develop and expand their businesses.

This is a unique opportunity to understand the latest developments of equity crowdfunding and the JOBS Act.  Sign up for the event now.  Registration is free for NYU students.  If you are not an NYU student, please email donna@ldjcapital.com for information on how to attend.