The good fit is a company which has a minimum viable product (MVP) that has gained substantial traction in the marketplace in order to demonstrate product-market fit. Our team prioritizes startups that have already generated money, although we may also evaluate pre-revenue companies that have established significant traction partnerships.
What is Crowd Funding?
Equity crowdfunding refers to the practice of raising funds for a business venture by selling shares or ownership stakes to a large number of individuals, typically through an online platform.
Our crowdfunding team deploys techniques have been proven effective over time and can be easily expanded, enabling us to successfully reach your financing objectives. We have selective criteria for accepting clients, but if we have the same goals and values, we are prepared to enter into a partnership with a high probability of achieving success.
Equity crowdfunding enables individuals to make investments in privately-held companies at their early stages, in return for acquiring equity, which represents ownership in the company through shares or a percentage of ownership.
What Is Traction?
Companies MUST have an MVP (minimum viable product) with enough significant traction in the marketplace to show product-market fit. The optimum are companies that are post-revenue but will consider pre-revenue companies with compelling traction partnerships.
Do you have what it takes?
Some of the needed elements for a successful fundraising project are list below.
Investor ready documentation properly formatted and within compliance
Escrow Pre-launch checklist
Do you have any skeletons in the closet which need to be addressed before fundraising?
What will be your market?
Does your website have a dedicated fundraising landing page?
Does your landing page have a click-funnel strategy?
Does your business have uniformity on it’s website, social media pages and printed materials?
What is your brand? Is your branding unique?
How many testing ads do you have ready and where will you place them?
Does your business have enough sizzle that investors want to buy in?
Do you have reserve liquidity to raise 5 million dollars? About 3 to 4 percent reserve is necessary.
Have you been trained to sell your fundraising project to an investor?
Are you prepared to meet with an investor group who could fly in and inspect your business and you have the expertise to make them want to ‘buy-in’?
Who are your funding coaches, who will do the packaging and the test marketing?
Do you qualify?
Which individuals or entities are eligible to participate in stock offerings? Following the enactment of Title III, any anyone who is a citizen of the United States and is 18 years of age or older is now entitled to participate in an equity offering. International investors are eligible to invest as long as they adhere to the securities legislation of their respective countries. Therefore, we advise them to verify the local securities laws before making any investments.
What advantages does investing in equity offerings provide?
Like all investments, there are certain risks involved. There is a constant risk of losing either the entirety or a fraction of your money. Nevertheless, the distinctive characteristics of investment crowdsourcing provide numerous advantages that investors cannot find elsewhere. Due to the fact the majority of providing firms are in their early stages of development, you have the opportunity to become involved in their journey and perhaps benefit from the company’s growth. By demonstrating your support at an early stage, you have the opportunity to become more actively involved and have a genuine sense of belonging to the firm.
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Regulation CF
The effective date is May 16th, 2016.
Regulation Crowdfunding (Reg CF) offering of $5 million, anticipates allocating a maximum of $50,000 towards marketing and associated services for equity crowdfunding. The costs of digital advertising can differ depending on the project; however it is typical to allocate 5-10% of your funding objective specifically for digital advertising expenses. Reg CF Equity Crowdfunding, sometimes referred to as Title III, is a funding method that allows startups to raise seed capital ranging from $100k to $5M. This method is specifically designed to accommodate the newly extended REG CF Equity Crowdfunding. Consequently, anybody, regardless of their accreditation status, from all over the world, is now able to purchase shares in your company. The shares are not readily available for trading due to a 12-month lock-up period, resulting in a lack of quick liquidity.
Anticipate that the overall expenses for a REG CF fundraising campaign will amount to approximately 15 – 20% of the total amount raised.
Duration: 90-120 days.
Many REG CF portals provide a feature called a rolling closure, which allows you to choose a minimum funding goal, such as $25k. Once this goal is met, you can start withdrawing funds from escrow and using some of the money for future marketing purposes. The standard gateway acquires and possesses YOUR info.
Are you interested in having your own platform for crowdfunding? Our team provides portal technology through our partner network to companies who frequently raise financing. This implies you have complete ownership of the data resulting from your marketing endeavors.
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Regulation D
For a Regulation D offering of $5 million, you may allocate up to $20,000 for legal services, $10,000 for optional platform hosting fees, up to $20,000 for the development of your marketing infrastructure, and around $10,000 per million for digital advertising expenses. Increasing the amount will result in higher costs. We consistently recommend that clients remain prepared to allocate additional dollars to prolong the marketing campaign in the event of necessity.
Anticipate allocating approximately 3% – 5% of the financing goal as the overall cost of the fundraising campaign.
Duration: 60-90 days
There are no restrictions on the maximum amount of funds you can raise using REG D. You have complete ownership of your data by hosting it yourself.
Our analysis conclusively demonstrates Regulation D was responsible for a substantially larger amount of capital raised compared to Regulation A. The disparity between the two regulations is estimated to be on the scale of 1000 times in a typical year over the analyzed period. According to the Securities and Exchange Commission (SEC)
Regulation D (Accredited) Equity Crowdfunding (Title II) refers to the practice of startups raising $3 million or more through equity crowdfunding. This method involves obtaining capital specifically from accredited investors, who are individuals with significant wealth. RED D 506c permits the utilization of “General Solicitation.”
The effective date is September 23rd, 2013.
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Regulation A+
Regulation A+ offerings require a significant amount of effort and financial resources. The process of preparing the necessary legal documents and obtaining approval from the SEC for an offering might occasionally take a duration of 6 months or longer. The costs associated with legal and accounting services alone can exceed $100,000. Regulation A+ offerings are suitable when the company (issuer) has a direct relationship with consumers (B2C) and aims to raise a minimum of $10 million.
Anticipate that the overall expenses, which encompass Digital Advertising, will amount to around 7% or higher of the total money raised.
Duration: 5 to 9 months.
The platform/portal operator acquires and possesses YOUR info.
Nevertheless, by hosting your REG A+ offering on your own, you have complete ownership of your investor data and significantly decrease the amount of money needed to collect funds. Regulation A+ Equity Crowdfunding (Title IV) is suitable for mid-stage enterprises that have achieved success, corporate spin-outs such as management buyouts, and low-risk startups with significant potential for growth. These types of companies are well-suited for Reg A+ platforms. Regulation A+ allows for an annual fundraising limit of up to $75 million. Shares can be easily converted into cash right after the initial public offering, and the Regulation A+ can be utilized to make corporations publicly traded and listed on either the NASDAQ or NYSE.
The effective date is June 19th, 2015.
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Criteria for acceptance
Do you are currently operating within a sizable and highly profitable market.
Do you are filling a void in the market.
Do you offer solutions to significant challenges in sizable, targetable markets.
Do you distinguish yourself from the competition.
Do you possess the ability to utilize technology.
Furthermore, be aware the expenses associated with the offering are regularly billed to the investors and reimbursed by the company once the offering is finalized. Ultimately, the corporation incurs no expenses from the transaction. There are certain modifications that can be implemented to certain products or services, which enable the corporation to recover the expenses they incurred before the entire amount is collected. In such instances, the early expenses related to legal and marketing can be reallocated to provide more funds towards marketing in order to finalize the offering.
Our team seeks firms with the potential for investors to achieve considerable gains. Optimal startups and early-stage enterprises that cater to expansive, multi-billion-dollar target markets.