the future of the private capital markets: equity crowdfunding
TRANSCRIPT
THE FUTURE OF THE PRIVATE CAPITAL MARKETS
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EQUITY CROWDFUNDING
Vincent Bradley CEO & Co-Founder @FlashFunders
Two Things About Me:
I’m a problem solver
I’m a competitor
Follow Me @vincentmbradley
1 JOBS Act & Reg CF
2 Impact – why this all matters?
AGENDA
3 FlashFunders
April 5, 2012 – Jumpstart Our Business Startups Act (JOBS Act)
May 16, 2016 – Reg CF Launches
January 29, 2016 – Reg CF Rules Set (Title III)
June 19, 2015 – Reg A+ (Title IV)
September 23, 2013 –General Solicitation (Title II)
REWARDS CROWDFUNDING
EQUITY FUNDING
EQUITY CROWDFUNDING
Platforms Kickstarter, Indiegogo FlashFunders, AngelList FlashFunders
Who Can Play? Everyone Accredited Investors Only Everyone
Regulatory? None Reg D Reg CF
What Are You Buying? Prototype of Product Securities / Ownership Securities / Ownership
Average Transaction $70 $58,000
$100 Projected
Average Offering Size $10,000 $350,000 $350,000
Regulation Crowdfunding (Reg CF) Launches: May 16, 2016
þ Allows a company to publicly fundraise up to $1m þ Everyone can play (230M Americans) þ Low cost mass market funding option þ Limit on investment amounts þ Financial Review and SEC Filing before offering
Raising $100K or Less
The issuer must provide financial statements certified by the
principal executive officer of the issuer to be true and complete in
all material respects.
Raising $100K to $500K
The issuer must provide financial statements reviewed by a public accountant that is
independent of the issuer.
Raising $500K to $1M
The issuer must provide audited financial statements from a
public accountant.
However, the SEC has provided a limited one-time exclusion from
the audit requirements for issuers conducting their first Reg CF
offering provided that the issuer does not have audited financial
statements available at the time.
Reg CF – Company Audit Requirements
Form C SEC requires every Issuer to file a Form C and receive approval prior to soliciting any investments under Reg CF. Once approved, the Issuer has to wait 21 days (cooling off period) before taking in any investments.
Advertising Notices 1) A statement that the issuer is conducting an offering, the name of the
intermediary through which the offering is being conducted and a link directing the investor to the intermediary’s platform;
2) Terms of Offering
o the amount of securities offered; o the nature of the securities; o the price of the securities; and o the closing date of the offering period
3) Factual information about the legal identity and business location of the issuer, limited to the name of the issuer of the security, the address, phone number and website of the issuer, the e-mail address of a representative of the issuer and a brief description of the business of the issuer.
Reg CF – SEC Filing & Advertising Requirements
Self certification is accepted “accreditation” method.
$100K or Less
Greater of $2,000 or 5%
Lesser of Annual Income or Net Worth
$100K or More
10% of annual income or net worth Not to exceed $100K per investor
Investor Annual Income
Investor Net Worth Calculation Investment
Limit
$30,000 $105,000 Greater of $2,000 or 5% of $30,000 ($1,500) $2,000
$150,000 $80,000 Greater of $2,000 or 5% of $80,000 ($4,000) $4,000
$150,000 $100,000 10% of $100,000 ($10,000) $10,000
$200,000 $900,000 10% of $200,000 ($20,000)
$20,000
$1,200,000 $2,000,000 10% of $1,200,000 ($120,000), subject to $100,000 cap $100,000
Reg CF – Investor Limits
Public forum to allow for commentary on offering page
FINRA Registered Funding Portal
Reg CF – Platform Requirements
What Can Companies do to Prepare for Reg CF?
¨ Launch a successful Kickstarter or Indiegogo Campaign ¨ Prepare great content (Video, Marketing Images, etc.) ¨ Build your base – who are you going to market to? ¨ Get your legal in order (C-Corp, clean cap table, corporate governance set-up)
Impact – why this all matters?
More than 120 private technology companies are now valued at over $1 billion
Companies Are Staying Private for Longer than Ever Before
Almost All Returns Are Now Private!!!
Source: Andreessen Horowitz 2015
Only 8.5 million of the 230 million American adults in the
United States qualify as “accredited” and therefore have had access to private
company investing.
230 Million
8.5 Million
The future of capital formation – FlashFunders.
FlashFunders is the Best Reg CF Platform for Entrepreneurs!
þ Complete Fundraising Management
þ Investor CRM
þ Access to Our Growing Investor Network
þ Shareholder Services
þ End-to-End Regulatory Compliance
Robbie Miller
Director of Investor Relations | FlashFunders
Dylan Satin Startup Relations Manager | FlashFunders
For additional information, please contact us:
You can also visit FlashFunders to learn more:
www.flashfunders.com