Trina Spear, 29, graduated in 2011 with an MBA from an elite school and a hefty $170,000 in student loans. The debt was the reason she took a job in private equity rather than start her own company. “For someone coming out of Harvard Business School, people think you have every opportunity in the world to do everything you want in life,” she said. “[But] you really feel like you’re handcuffed and you have to go to the big corporate job.”
TRINA RAISED MONEY FROM INVESTORS IN EXCHANGE FOR EQUITY IN HERSELF
Two weeks ago, Spear moved to Los Angeles to join FIGS Scrubs, a startup she co-founded that’s attempting to freshen up the medical apparel industry. She was able to quit her big corporate job at Blackstone Group thanks to 13 strangers who invested $20,000 in her future in exchange for one percent of her pre-tax income over the next ten years. The money will cover her $1,500 monthly interest payment and hold her over as she raises $1 million in venture capital for her startup.
It’s called a human capital contract, in which an individual raises money from investors in exchange for equity in herself. The idea is a bit unsettling. It sounds like either a modern version of indentured servitude, or the early version of some dystopian future in which every person is valued in dollars. In the science fiction novel The Unincorporated Man, every human is incorporated and most don’t own a majority of themselves. Their shareholders are their parents, the government, schools, corporations, and investors who bought their equity on the secondary market.
FULL STORY HERE
By Devin Thorpe
Crowdfunding is not just about creating jobs, it is about creating jobs for the right people. In April of 2012, President Obama signed the JOBS Act into law, authorizing crowdfunding of equity and debt for the sake of creating jobs. The more time I spend studying crowdfunding and working with the leaders in the crowdfund community, the clearer it becomes that not only will crowdfunding create jobs, it will create jobs in the right places.
Recently, I sat down in a hidden valley near Park City, Utah with Candace Klein, CEO of Somolend and founder of the nonprofit Bad Girl Ventures, who explained that overwhelmingly, the people were polled about crowdfunding indicating a desire to raise capital are women, African Americans and Hispanic Americans. In other words, crowdfunded capital will flow to entrepreneurs in the communities that have been most disadvantaged in America.
According to Klein, women own over 50 percent of the businesses in the United States but receive less than 5 percent of “traditional capital” and less than 3 percent of venture capital. Klein notes that she founded Bad Girl Ventures specifically to address this problem. BGV has funded 45 women-owned businesses with a total of $5 million, but also had to turn away thousands of women. This inspired Klein to launch Somolend so that she could provide capital to thousands of women owned businesses. This also allows “women investors to build their own wealth,” she notes.
FULL STORY HERE
Peak Energy Company follows President Trump’s lead, commits 25MM to Illinois Basin acquisitions, 500 jobs to be created. Trump targeted the nation’s infrastructure during his election night victory speech, saying he aims to make it “second to none.” In response, representatives from Illinois and four other states in the Upper Midwest are working to make sure their projects become a priority.
US Energy is on the rise, according to the Energy Department, U.S. production rose to an average of 8.8 million barrels a day in the fourth quarter after dropping below 8.7 million barrels in the third quarter. The department forecast increases to 9.2 million barrels a day this year and 9.7 million – a possible record – in 2018 in a market outlook issued Tuesday.
In response Peak Energy company has commited 25MM to acquisitions in the Illinois Basin. Founded in 2011, and debt free, Peak uses a conservative Warren Buffet strategy of investing by acquiring producing oil assets at a discount.
“If it’s not on sale, we don’t buy it.” Todd Allen, President of Peak Energy “The state of Illinois has been hit hard economically and deserves more jobs, this great state needs to get economy moving, we are here to support that effort by hiring local workers.” Peak’s focus is providing income and secure oil investments for its capital partners.
By Candace Klein
Friday, April 5 marks the one-year anniversary of the signing of the Jumpstart Our Business Startups (JOBS) Act into law.
Unfortunately, key provisions of the act have yet to go into effect, thanks mostly to the political quagmire resulting from turnover within the leadership of the U.S. Securities and Exchange Commission. The departure of Mary Shapiro as Chairman of the SEC on November 15 was followed by the appointment of Elise Walter to replace her on December 11. Now Mary Jo White waits to take over for Walter. Combine this with significant SEC staffing changes and the fact that SEC Commissioner Paredes is about to run up against his term limit, and you have one heck of a bottleneck.
It’s been surprising to me that the regulatory process has been so hard to navigate and has taken so long. Because the legislative work of getting the JOBS Act passed was remarkably smooth and speedy.
My own involvement began with my work with Senator Jeff Merkley (D-Ore.) on the audit requirements section of the Entrepreneur Access to Capital Act. I felt like I was really on the inside-;but my company was about to run out of money.
I had been running SoMoLend, a debt-based crowdfunding company, since May 2011. I raised some seed funding in September 2011, but it was a challenge, to say the least. Most of my potential investors didn’t believe that debt crowdfunding would ever be legalized.
In January 2012, at an event in New York, I met Congressman Patrick McHenry (R-N.C.), Jason Best, a principal at Crowdfund Capital Advisors, and Vince Molinari, the CEO of Gate Technologies. Each of us had been working on similar legislation independently. We started working together and began to make some real progress.
FULL STORY HERE
The announcement is considered a big win for equity crowdfunding by some equity crowdfunding investors.
Yesterday, the SEC recognized social media as an acceptable way to distribute information to shareholders. In the press release the SEC referenced the company Netflix in which spurred the question of whether or not it was ok to submit company announcements via social media. So what could this mean for equity crowdfunding investors?
Although Netflix is no longer a start up company. The news from the SEC to allow companies to submit company announcements via social media is a great step forward for investing in equity crowdfunding and equity crowdfunding sites. Virtuous Vodka a startup that received funding from the equity crowdfunding site “Funded by Me” out of Sweden currently has a private Facebook group for all equity crowdfunding investors. Below highlights the Pros and Cons of investing in equity crowdfunding companies that utilize social media.
– Distributing company announcements via social media can be much cheaper for the company. (no one reads snail mail anymore these days anyway)
– Quicker distribution. It doesn’t take much to write a facebook post. The CFO could even post from a cell phone to alert all equity crowdfunding investors)
– Additional collaboration with stakeholders all together in one place on the internet can produce ideas, suggestions, and additional resources for increased company success, as an equity crowdfunding investor this can be huge especially in small startup companies.
– Equity crowdfunding sites will bring a lot more investors. Social media announcements could get you the information faster than the competition.
– Not every equity crowdfunding investor has a Facebook or wants one either.
– With easy access to investors, companies can send information overload. (Not that we don’t want to hear about the CEO’s grand daughters dance competition, but that might be information overload)
– Security issues can easily arise. While Facebook is actually somewhat secure. It wouldn’t take much for information to get in the wrong hands with that savy equity crowdfunding investor leaves his social media account open on a public computer and forgets to log out.
Full Story Here
Crowdfund leader launches film crowdfunding management services, starting with eight films and top indie film companies such as MadChance.
LOS ANGELES, April 2, 2013 /PRNewswire-USNewswire/ — Today David Marlett , working under his banner BlueRun Crowdfund, a division of BlueRun Media (BlueRun), announced the recent launch of the world’s first full crowdfunding services firm for the film industry,including announcing some of BlueRun’s current clients and eight ongoing or soon-to-start crowdfund campaigns.
“The success of Veronica Marswith crowdfunding has certainly placeda megawatt spotlight on the power of this funding source for somefilms,” said Marlett, a filmmaker, attorney and one of the leaders of thecrowdfunding industry. “It’s great to be helping our clients tap into thisexciting new resource and connection with their audience, especiallynow that we’re seeing a movement toward major talent involvement.”
“It’s great to be helping our clients tap into this exciting new resourceand connection with their audience, especially now that we’re seeing amovement toward major talent involvement.”
A group of Arizona lawyers and a congressman are growing impatient with federal regulators tasked with loosening restrictions on small-business investing, the group said Monday.
Two key provisions of the Jumpstart Our Business Startups Act, or JOBS Act, enacted in April 2012, would boost Arizona’s economy significantly if allowed to take effect, Rep. David Schweikert, R-Ariz., said during a panel discussion Monday at Arizona State University’s SkySong in Scottsdale.
One provision of the 2012 law lifts a long-standing federal ban on general advertising for private-business investment opportunities. The other would allow startups and other small businesses to seek investors through crowd-funding sites on the Internet.
Thus far, crowd-funding via websites such as Kickstarter.com and Indiegogo.com has been limited to participants simply making donations or preordering products that a venture intends to produce if its fundraising drive is successful.
The JOBS Act allows what is commonly referred to as equity crowd-funding, in which the participants become equity shareholders in the venture.
Despite the law’s passage nearly a year ago, the provisions have not yet taken effect because the U.S. Securities and Exchange Commission first must issue specific rules for their implementation.
Full Story Here
By Ryan Caldbeck
It’s hard to believe that it was almost one year ago (April 5,2012 to be precise) that President Obama signed the JOBS Act into law. At the time, Obama noted, “Because of this bill, start-ups and small business will now have access to a big, new pool of potential investors—namely, the American people. For the first time, ordinary Americans will be able to go online and invest in entrepreneurs that they believe in.” Equally hard to believe for me personally is that it’s been almost one year since we launched CircleUp, which has quickly grown into the largest equity-based crowdfunding website in theUS.
However, while the one year anniversary of the JOBS Act is upon us, the law’s key provisions, namely Title II (general solicitation) and Title III (equity crowdfunding for unaccredited investors) are still not written. As a quick refresher, the general solicitation provision will allow companies raising money to broadly advertise their raise to customers, consumers, suppliers, etc. Unaccredited equity-based crowdfunding will allow investors making less than $200,000 per year to invest a limited amount of money into private companies in exchange for equity.
With unemployment still well above 7%, we recognize the urgency of implementation of the JOBS Act; it will provide a much needed boon to the U.S. economy by giving early stage companies access to capital. We are also fervent believers that the financial services industry needs disruption. The primary technology still used in most private company capital raises is email and Microsoft Excel. Fundraising usually takes the lion’s share of an entrepreneur’s’ attention for 6-12 months at a time when her company needs her attention the most.
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CrowdClear, a provider of technology, regulatory and compliance services to crowdfunding portals, today announced the launch of its highly scalable, regulatory-compliant technology platform. A division of Bendigo Securities, LLC, a registered broker-dealer, CrowdClear provides funding portals with all of the technology and services to offer Regulation D securities to accredited investors.
Using CrowdClear, leading funding portal RockThePost launched its investment platform this week, connecting high quality entrepreneurs with accredited investors interested in new startup opportunities. RockThePost has been in the reward crowdfunding space for over two years, raising hundreds of thousands of dollars for startups and registering more than 6,000 companies on its portal.
“CrowdClear is positioned to disrupt the world of early stage financing by helping to bring investors and issuers together in a scalable, regulatory-compliant manner,” said Robert Simmons, CEO of CrowdClear. “We support Regulation D transactions today, with an eye toward supporting future crowdfunding transactions.”
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By Dallas Kachan
With early stage capital for cleantech innovation becoming increasingly scarce, crowdfunding sites like Kickstarter, Indiegogo and a new crop of clean/green ones are beginning to emerge as significant sources of funding for selected next-gen clean technologies.
Hurdles remain, particularly for investors seeking returns, but I’m more optimistic about these sites’ usefulness to cleantech entrepreneurs than I used to be.
Asked a year ago by a publication about how significant crowdfunding was likely to become in fostering disruptive cleantech innovation, I wasn’t exactly effusive. As GE’s Ecomagination Magazine wrote, “’When it comes to the tens and hundreds of millions of dollars needed for new breakthrough science, that still best comes from institutional investors,’ says Kachan. Kachan says big investors like to get seats on a company’s board and hope to get a sizable chunk of profits. Clearly, someone who plunks down a small pledge on Kickstarter has different motivations.”
Today, a year later, a lot has changed. Cleantech venture investment worldwide in 2012 was two thirds of what it was the year previous, with early stage funding particularly hard hit. And now with good, relevant success stories like Adapteva and BioLite, at least some startups are starting to find today’s crowdfunding options emerging as a source for the equivalent of friends & family seed capital. While it’s unlikely to ever produce the millions that institutional or corporate deep pockets will continue to provide, it may—just may—serve entrepreneurs seeking early stage money in a time when early stage money has become harder to come by than ever.
And then there’s new, fledgling policy support. In America, today is coincidentally the one-year anniversary of House passage of a bill known as the JOBS Act, which is intended to make it easier for companies to raise money through crowdfunding. Charities have used crowdfunding for years to raise money. The new bill is to streamline the process of companies raising up to $1 million a year in equity, not the simple donations as in today’s crowdfunding, but U.S. Securities and Exchange Commission (SEC) regulations to govern the process are still forthcoming as of this writing. Today, small businesses wanting to raise money from more than 500 investors have to go through a long and often expensive process of registering documents with the SEC.
Full Story Here