Crowdfunding Handbook: Raise Money for Your Small Business or Start-Up with Equity Funding Portals - Softcover

Ennico, Cliff

 
9780814433607: Crowdfunding Handbook: Raise Money for Your Small Business or Start-Up with Equity Funding Portals
Softcover
ISBN 10: 081443360X ISBN 13: 9780814433607
Verlag: HarperCollins Leadership, 2018

Inhaltsangabe

IPSs are expensive, and venture capital nearly impossible to attract. Crowdfunding is changing the game for private companies. Are you taking full advantage?

Think Kickstarter® is just for artists and people who don’t really want to work for their success? Think again! In 2012 President Obama signed the JOBS act (Jumpstart Our Business Startups), empowering privately owned companies to raise capital from investors without going through the rigorous IPO and private placement processes. Your private company can now crowdfund your way to success!

Now that the SEC has handed down the last regulations, the floodgates will open and companies will be free to compete for funding. Thankfully for you, small business and legal expert Cliff Ennico has followed the equity crowdfunding story since its inception and has translated the regulations into a clear set of dos and don’ts for entrepreneurs and small business others looking to get in early.

In The Crowdfunding Handbook, burgeoning crowdfunders can learn how to:

  • Decipher whether crowdfunding is their best bet
  • Choose between funding platforms
  • Pitch a project to the public
  • Reach the most promising investors
  • Figure out disclosure documents and report requirements

The Crowdfunding Handbook reveals the tips and tools to helo you raise money for your small business or startup with equity funding portals.

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Über die Autorin bzw. den Autor

CLIFF ENNICO, a former Wall Street lawyer, is a leading expert on the legal and financial issues of entrepreneurial companies. Previously the host of PBS's MoneyHunt, he now writes the nationally syndicated "Succeeding in Your Business" column as well as a legal QA column for Entrepreneur.

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Ready to finance your venture the Kickstarter way? With equity crowdfunding rules finalized by the Securities and Exchange Commission, the landmark 2012 JOBS Act has finally gone live, freeing small businesses to raise up to $1 million without a lengthy, expensive IPO process.

For many start-up companies and entrepreneurs, the “Regulation Crowdfunding” rules mean better access to small investors, less red tape, more capital for launching companies, and faster growth—especially if you get in early and do it right.

Legal and small business expert Cliff Ennico has followed the equity crowdfunding story since its inception. In The Crowdfunding Handbook, he explains the federal legislation and translates the 685-page SEC Regulation Crowdfunding document into a clear set of dos and don’ts, with targeted answers to all your questions:

• Is crowdfunding my best bet for raising capital? • What types of securities should I offer, and how should I price them? • What’s the best way to pitch a project to the public? • Which crowdfunding portal should I choose? • Which disclosure documents need to be filed? • What are my other legal requirements? • How can I set up my company to increase the odds of success? • Who are the most promising investors, and how do I reach them? • How do private securities offerings mix with crowdfunded options? • What are the “intrastate offerings” exemptions in my state? • How do I manage a “crowd” of investors and keep them happy?

Equity crowdfunding moves beyond raising money for specific projects to offering stock, bonds, and other securities to nonaccredited investors—the next level in the “friends and family” model, and a projected game changer for the way private companies get capital. The Crowdfunding Handbook guides you safely and smoothly through this exciting new funding arena, while helping you avoid potential costly mistakes.

Cliff Ennico, a former Wall Street lawyer, is a leading expert on the legal and financial issues of entrepreneurial companies. Previously the host of PBS’s MoneyHunt, he now writes the nationally syndicated “Succeeding in Your Business” column as well as a legal Q&A column for Entrepreneur. He is the author of several books, including The eBay Seller’s Tax and Legal Answer Book.

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The Crowdfunding Handbook

Raise Money for Your Small Business or Start-Up with Equity Funding Portals

By Cliff Ennico

AMACOM

Copyright © 2016 Clifford R. Ennico
All rights reserved.
ISBN: 978-0-8144-3360-7

Contents

Introduction, xv, 
The Road Map: Where to Find Detailed Discussion of Regulation Crowdfunding, xix, 
PART 1 THE BASICS OF CROWDFUNDING, 
Chapter 1. What Is Crowdfunding?, 3, 
Chapter 2. The Evolution of Crowdfunding, 13, 
PART 2 LAUNCHING A SUCCESSFUL TITLE III CROWDFUNDED OFFERING, STEP BY STEP, 
Chapter 3. Is Crowdfunding Right for Your Company?, 29, 
Chapter 4. Preparing Your Company for a Crowdfunded Offering, 36, 
Chapter 5. Launching Your Crowdfunded Offering, 58, 
Chapter 6. Managing and Marketing Your Crowdfunded Offering, 75, 
Chapter 7. After Your Successful Crowdfunded Offering Is Completed, 83, 
PART 3 COMMUNICATING WITH YOUR CROWD, 
Chapter 8. Keeping Your Crowd Under Control, 95, 
Chapter 9. Going Back for Seconds: Launching Multiple Crowdfunded Offerings, 106, 
PART 4 CONSIDERATIONS FOR INVESTING IN A CROWDFUNDED OFFERING OR SETTING UP A FUNDING PORTAL, 
Chapter 10. Should You Invest in a Crowdfunded Offering?, 113, 
Chapter 11. Should You Set Up a Funding Portal?, 130, 
PART 5 BACKGROUND ESSENTIALS: CROWDFUNDING HISTORY, LAW, AND REGULATIONS, 
Chapter 12. Federal Regulation of Private Offerings of Securities Prior to the JOBS Act, 143, 
Chapter 13. The JOBS Act and Regulation Crowdfunding Rules, 152, 
AFTERWORD: What the Author Really Thinks of Crowdfunding, 163, 
ACKNOWLEDGMENTS, 171, 
APPENDIX 1: SEC Form C, 173, 
APPENDIX 2: Optional Question-and-Answer Format Version of SEC Form C, 178, 
APPENDIX 3: Amended and Restated Certificate of Incorporation Creating Classes of Voting and Nonvoting Common Stock and Convertible Preferred Stock [Delaware form], 195, 
APPENDIX 4: Provision of LLC Operating Agreement Creating Classes of Voting and Nonvoting Membership Interest, with Nonvoting Preferred Interests, 217, 
APPENDIX 5: Some Rights of Shareholders Under State Corporation Laws, 221, 
APPENDIX 6: Term Sheet for Crowdfunded Offering of Debt Securities, 224, 
APPENDIX 7: Term Sheet for Crowdfunded Offering of Series B (Nonvoting) Preferred Shares in Corporation, 226, 
APPENDIX 8: Term Sheet for Crowdfunded Offering of Class B (Nonvoting) Membership Interests in a Limited Liability Company, 234, 
APPENDIX 9: Sample Risk-Factors Section of a Crowdfunded Offering Statement, 236, 
APPENDIX 10: Sample Accredited Investor Questionnaire, 244, 
Suggestions for Further Reading, 253, 
Index, 257, 
About the Author, 265, 
Free Sample Chapter from Fail Fast or Win Big by Bernhard Schroeder, 267, 
About Amacom, 277,


CHAPTER 1

What Is Crowdfunding?


Most business start-ups have relied at some point on the friends-and-family offering to raise the capital needed to create new businesses — to make the products, provide the services, and launch the innovations that make the global economy exciting and dynamic and provide the foundation for human progress.

Since historically few other people (to say nothing of reluctant banks after the 2008 financial crisis) have been willing to risk their hard-earned money on speculative start-ups, most entrepreneurs and company founders, having exhausted their credit cards and personal savings, have been forced to borrow money or seek investment from their friends, college roommates, family members, teachers, mentors, and anyone else who would listen to their pitch. The near-universal popularity of friends-and-family offerings can be explained by two basic facts of human nature:

1. Friends and family members will frequently offer you money out of love and affection (or, less charitably, to get you out of their hair), not necessarily for the purely economic motive of seeking a return on their investment.

2. Friends and family members are less likely than other people to sue you and force you into bankruptcy if the you-know-what hits the fan and the start-up fails to achieve liftoff.


Historically, the pool of available capital from friends and family has been extremely limited for most entrepreneurs, and the success of these offerings often depended on who your friends and family were. If they were rich or well connected, you were more likely than not to get the capital you needed to launch your business. If your friends and family were poor, well ...

But that is about to change. In a big way.


Taking the Friends-and-Family Offering to the Next Level

The past decade has seen an explosive growth in Internet-based social media platforms, such as Facebook, Twitter, Instagram, Pinterest, Snapchat, Google+, and LinkedIn. While these platforms are significantly different from each other, all have one basic thing in common: they are designed to help people exponentially expand their network of friends and family by building a personal network of followers, fans, hangers-on, groupies, posses, and significant others so that it becomes larger than the friends and family who share entrepreneurs' DNA or who actually know them in the flesh.

Thanks to these platforms, millions of people throughout the world have discovered that they have more in common with someone in a remote foreign country than they do with their next-door neighbors. The author himself, a relative novice on social media, has about four hundred friends on Facebook and almost two hundred on Twitter. I admit to knowing personally only a handful of them. Each week I receive invitations to friend other people on Facebook, and I wonder how in the devil these people found me, and why they care about my "friendship." I sometimes wonder whether the people who use cartoon caricatures or famous artwork as their Facebook photos are real people or computer algorithms.

It was only a matter of time before entrepreneurs, visionaries, and dreamers started thinking about tapping into these expanded social media networks to raise capital for their projects, their businesses, and other aspects of their lives.

But there was a problem.

Since the 1930s, the U.S. Securities and Exchange Commission (SEC) had imposed severe restrictions on an entrepreneur's ability to raise capital using "general solicitation" or "general advertising." The idea was that you had to actually know people, and know them fairly well, before you hit them up for money.

I have had personal experience with these limitations. Back in the early 1990s, I and a couple of partners decided to produce a television show based on a novel idea: entrepreneurs from around the country would pitch their ideas before a panel of venture capitalists, lawyers, and industry experts and have their business plans critiqued before a live television audience.

Sound familiar? Fans of the popular network television show Shark Tank might be surprised to know that my show, MoneyHunt, ran on PBS for seven years before it folded when the Internet bubble burst in 2001 (to see some old episodes, search on YouTube for "Cliff Ennico" or "MoneyHunt television show").

Because I was not only the host of the show but the legal expert on the management team, I spent countless hours speaking to securities lawyers, SEC staffers, and others trying to get the answer to a simple question: what can entrepreneurs say, and not say, on television about their efforts to raise capital? In the early 1990s, the answer was...

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Verlag
HarperCollins Leadership
Erscheinungsdatum
2018
Sprache
Englisch
ISBN 10 
081443360X
ISBN 13 
9780814433607
Einband
Taschenbuch
Anzahl der Seiten
288
Kontakt zum Hersteller
Nicht verfügbar
Verantwortliche Person
gpsr@libri.de
gpsr@libri.de

Friedensallee 273
Hamburg
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