Category Archives: Alternative Investments

We proudly invite you to 4th Annual Crowdfunding USA on May 4-5, 2017 National Press Club Washington, DC.

Crowdfund Beat Media Presents: 
 
The Important gathering will discuss what’s new on State of Investing and Risk Mitigation through evolving Internet finance space under the label “2017 the Year of 2.0 Equity & SME Finance-Online Lending or Investing- Crowdfunding “Jobs Act” under new congress & President Trump administration”

 See Conference website & Full Agenda Speakers 

 
For Promotional Opportunities, Group Discount, Sponsorship, and how to become a panelist call 1-888-580-6610 or email to info@crowdfundingusa.com

CF USA AGENDA’s  SNAPSHOT

SEC – JOBS ACT – Early Investing
Family Offices – IRA Trust
Rules and Regulations Consideration
Rule 506(c) – Title II Tittle III REG D REG CF
Definition of accredited investor?
Liquidity for the private securities space
Redefining Securities Distribution through Crowdfunding

Real Estate Crowdfunding

Why Hot Real Estate CrowdFunding Is The Next  New Frontier?
Impact of crowdfunding on real estate finance and deal-making
Is Real Estate Crowdfunding Offers An Attractive Alternative For Secure Investments?
The Impact of Technology and Internet on Real Estate Crowdfunding

Trump to Lift Community Bank Regulations (and what that means for house flippers)

Shadow Banking
Dodd-Frank: A Republican Congress
will likely be looking for ways to scale back time and money on business regulation.
Real Estate Crowdfunding and Community Development

Pros & Cons of Internet finance and lending 

2017 State of CrowdFunding

Business of Crowdfunding & Reaching the Goal – How to Make It Happen

Multiple Faces of Crowdfunding on Equity

Future of EB-5 Business Finance & Crowdfunding
Disruption of Equity Crowdfunding on VC’s – Angel Investors
Is Online Lending & Fintech industry here to stay?

Exploring Title II
Why it dominates and will continue to dominate crowdfunding
What initiatives are being pursued to create secondary markets or other means
Effect of IPO window

Regulation A+ Mini IPO
Many of the Reg A deals got pulled this last year.
Is this offering type holding up to investor interest.
Need research on Reg CF, Reg A+ and other offerings.
How much was raised, and how have they performed.
Aftermarket performance of Reg A+ deals

After hours Networking 

Round table discussion

 

Political Crowdfunding: Building a Community Instead of a Campaign

By Anum Yoon, Crowdfund Beat Media Guest Editor,

Throughout the past few years, crowdfunding has become a source of fundraising for charities, life-saving surgeries, new products, individual travel goals, research projects and more. With crowdfunding platforms and social media, it’s easier than ever to set up a page where friends and family can donate to whatever it is you’re passionate about or need money for. But does this new fundraising fad have a place in politics?

Election-Money

Politicians who are starting campaigns or building platforms need money, and it’s a fairly new possibility that this money could come from small individual donations from people on crowdfunding websites instead of the wealthy upper class. Here’s everything there is to know about crowdfunding in the political arena.

Traditional Political Fundraising

In the past and even currently, campaigns have been funded by the appropriate political party the candidate is running for. Additionally, wealthy donors throw large amounts of money into the politician’s bank account and, more often than not, cash in the donation for a favor later on down the road.

With this system, the upper class and politicians are completely running the show. Campaigns are based on who got money from the top dogs, and elections are based on those campaigns. So, it’s not hard to see how the average person isn’t exactly included in the political process.

Changes Being Made

In 2008, Barack Obama, who would be elected president that year, changed the game of fundraising in politics. He was the first candidate who collected funds for his campaign from the average working class family.

Obama successfully built a campaign that got American families interested and invested in him – literally. He asked for donations on his website in order to fund his campaign and raised millions of dollars from small donors who simply donated what they could afford, even if that was only a dollar.

Obama’s strategy worked, obviously. Since then, politicians at the local and federal level have used similar campaign strategies. Bernie Sanders, who ran for the Democratic nomination in the 2016 presidential race, prided himself on not accepting money from billionaires. Instead, he wanted to be funded only by the average American. It was easy for his supporters to support him because donating was just a few clicks away thanks to the ease of electronic payments.

He would often send out emails to his supporters asking for just $3 before midnight to send a message to Washington that Americans are tired of billionaires buying elections. The average campaign donation was $27.

On the surface, it seems like Sanders’ strategy did not pay off, since he did not win the nomination. However, Bernie Sanders made quite a name for himself in just a few short months and was a serious contender for the nomination, running on only small donations through crowdfunding efforts. His effort is a look into what could be the future of political fundraising.

Building a Community

The idea behind crowdfunding is to build a community. Crowdfunding started with individual stories. People who wanted to travel and do philanthropic work. Somebody who needed a surgery their family couldn’t afford. An entrepreneur with a great business idea. A young girl who wanted to go to Disney World.

The stories behind each crowdfunding page are what drives people to donate money. People tell their story in the hopes of touching others and convincing them to donate to their cause.

For this reason, crowdfunding in the political arena could be a great thing. Imagine politicians building their campaign not around the nitty gritty of politics, but around a story that touches the American people — a story of hope and resilience. Campaigns and politics in general could become so much more personalized, and Americans could really play a part in the government.

Of course, there are always some things that could go wrong. Politicians could somehow corrupt this system. There will always be billionaires to buy out politicians in their own best interest. There are holes in every system, but it’s also possible to patch up those holes. Since crowdfunding is such a new idea, there is much to be said and discovered about how the system would actually work when utilized by many politicians.

So, crowdfunding in politics could be great, it could be terrible or it could be somewhere in the middle. Only time will tell how politicians will use crowdfunding for their campaigns and how people will react to this new way of fundraising.

 

 

 

 

The Battle to Launch a Next-Generation Retirement Product & Control $14 Trillion in Investment Direction

By Dara Albright,CrowdFunding Beat Guest Editor, FinTechREVOLUTION.tv  , Dara Albright Media,

In the Fall of 2016, I penned an article entitled, “Modernizing the Self-direct IRA – The Trillion Dollar FinTech Opportunity” – the first in a new series of articles that focuses on next-generation retirement planning. The piece underscored how FinTech will mend America’s flawed retirement system and foster the growth of “digital” investing.

Retire1

This initial report drew attention to the growing necessity for a low-cost, high speed, autonomous retirement solution that would meet the demands of today’s alternative micro-investor. Most significantly, the piece summarized the two distinct individual retirement account prototypes – the Brokerage IRA and the Trust Company IRA – which are vying to become the self-directed IRA exemplar and dominate the $14 trillion retail retirement market.

Sometimes I feel like I am the only one sensing a war brewing in the retail retirement market. But then again, I am somewhat clairvoyant.

Perhaps the majority of America’s retail investors are too busy reluctantly allocating their retirement dollars to sanctioned bond funds – many of which yield more clout than performance – to even notice the race to create a next-generation retail retirement product that will economically custody coveted micro-sized alternative investment products and, in doing so, ensure that a greater number of Americans maintain more properly diversified retirement portfolios.

Maybe most old-school financial professionals are just too preoccupied chasing the “whale” to realize the imminent colossal impact of the rising micro-alternative investor.

No matter the rationale, the fact is that this battle to produce a next-generation retail retirement vehicle is likely to go down as the largest industry duel in the history of commerce – dwarfing the cola and software wars by trillions.

The victorious retirement product stands to inherit the power to redirect $14 trillion dollars of mutual fund assets and disrupt long-standing retirement asset monopolies – thus paving the way for a superior breed of investment products to emerge (download: http://www.slideshare.net/smox2011/the-trillion-dollar-fintech-opportunity).

Unlike previous corporate clashes, the winning IRA model is easy to predict. The frontrunner will be the one possessing the most optimum technological and regulatory framework to accommodate the needs of the modern retail investor. Today’s retail investor is not looking for another mutual fund. He is not begging for ETFs. Nor is he interested in day-trading stocks. Instead, he is craving yield, and he is demanding access to the same level of returns that institutions have been enjoying for years through alternative asset diversification. Simply put, modern investors are looking for a self-directed retirement vehicle that enables them to readily, easily and affordably spread tiny increments of retirement capital across a broad range of asset classes.

Except for the possibility of a sudden legislative change, hands down, the trust company based model will emerge as the clear victor. The Brokerage IRA is bound by too many compliance constraints to enable it to efficiently and cost-effectively facilitate micro investments into alternative asset classes such as P2P notes or crowdfinanced offerings.

The Trust Company IRA, by contrast, operates under a much more favorable regulatory scheme, and any technological shortcomings are presently being addressed and conquered (see: http://www.prnewswire.com/news-releases/ira-services-launches-p2p-lendings-first-cloud-based-api-driven-retirement-investment-solution-at-lendit-2016-300247413.html).

Because it is faster and easier to overcome a technological deficiency than it is to amend regulations, the Trust Company IRA will continue to amass a significant advantage. This is especially true as technology becomes less and less of a commodity and the political climate becomes more and more contentious

There are simply too many compliance-related obstacles that FINRA-regulated BDs would need to surmount in order to formidably compete with the trust company based model. Perhaps one of the most pressing is the Department of Labor’s fiduciary rule which is scheduled to take effect in April.

Under the new DOL rule – which expands the definition of a fiduciary to include commission-based brokers – brokerage firms that handle retail retirement accounts will find themselves facing additional and unwelcomed liability.

In the wake of the DOL rule, retail brokerages have already been seen scrambling to adjust their existing retail retirement product lines. Merrill Lynch has announced that it will be closing its commission-based retirement business altogether, and Edward Jones pronounced that it will simply stop offering mutual funds and ETFs as options in commission-based retirement accounts.

Yes, you read that correctly. Retail brokerages would prefer to limit access to investment products or exit the retail retirement business altogether than to deal with the regulatory headaches of helping small investors prepare for retirement.

Instead of being able to access “prepackaged” diversified investment products, Edward Jones’ retail clientele will either have to self-diversify across stocks, bonds, annuities and CDs, or move to a managed account that charges an asset-based management fee. Since the typical retail investor’s account is too small to properly self-diversify using individual investment products such as stocks and bonds, and since asset-based management fees tend to be much more expensive than one-time commissions, once again retail investors are getting the shaft.

According to CEI finance expert John Berlau, “The DOL fiduciary rule will restrict access to financial advice and reduce choices for lower and middle-income savers. The restrictions can deter companies from serving middle-class savers, creating a “guidance gap” that could cost an estimated $80 billion in lost savings.”

As the DOL Fiduciary Rule succeeds in eliminating both financial advisors and investment choices from the traditional retirement planning equation, smaller investors will be forced into taking a more autonomous stance to retirement prep – leading to a seismic shift in both retail assets and retirement vehicles.

This will have widespread implications on the financial services industry that will include a mass exodus from brokerage IRAs into Trust Company IRAs as well as a flock to robo-advisors, marketplace finance and well as P2P and digital investing – a trend in retail investing that is already well underway.

As the battle for the retail retirement account unfolds, I am going to be reveling in the irony of how once again needless regulatory oversight is helping fuel the FinTech revolution.

Originally published on Dara Albright Media.

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Dara Albright – President of Dara Albright Media, Co-founded the FinFair ConferenceFinTechREVOLUTION.tv

Recognized authority, thought provoker and frequent speaker on topics relating to market structure, private secondary transactions and crowdfinance. Welcome to my new personal blog where you can glean unique insight into the rapid transformation of global capital markets.

 

Crowdfunding- The Good, The Bad & The (really) Ugly

By Shane Liddell is the CEO and chief Crowdfundologist at Smart Crowdfunding LLC,. Crowdfund Beat Guest post,

Part 3 –The (really) Ugly

Introduction

In Part 1 I covered all of the good things that we have seen as crowdfunding continuously gathers momentum across the world. The future looks bright indeed!

In Part 2 I wrote of changes within the industry, especially within rewards based crowdfunding – the competition which makes it so much harder for the small guys and the Indiegogo platform now giving preferential treatment to corporates, allowing them “…to pay for special placement on Indiegogo’s site, making them more discoverable than other campaigns”. I also explained that although campaign creators are often labelled as scammers when they fail to deliver on their promises, in many cases this is not true at all.

Here in Part 3, we delve into the dark world of extortion, blackmail and a whole host of other not so nice behavior. I’ll cover some real scams where the campaign creator’s intention from the very beginning was to steal people’s money, in some cases, with the crowdfunding platforms help too!

Part 3-The (REALLY) UGLY

Extortion and Blackmail

Ethan Hunt – Micro Phone

During our very early days of offering crowdfunding campaign marketing services, we were engaged by a Mr. Ethan Hunt who had just launched his Micro Phone campaign on the Indiegogo platform. Ethan and I shared a few phone calls as his campaign began to gather momentum and I specifically remember being on a call with him one day, while the money was rolling in, and each refresh of his campaign page showed more and more backers claiming the rewards on offer. Times were good and there was an element of excitement in his voice (and mine too). Who wouldn’t be excited to see such fantastic traction?

Around 4 weeks later, with almost $50,000 raised, Ethan reached out to me to say he’d been contacted by a guy named Michael Gabrill who claimed that he had some negative information about Ethan and that if he did not pay him $10,000 he would release this information to the public through various media channels. Ethan forwarded me the email communications so I could see for myself.

Low and behold, there it was in black and white.

My advice to Ethan at the time was to just ignore this guy, as I was sure that Gabrill was just a typical opportunist money grabber and was probably seeking attention too. Ethan wrote back to him, refusing to pay a single cent but what happened next surprised us both – Garbrill began contacting various media including Pando and even went so far as to create a webpage slandering Ethan and his Micro Phone project.

The story continued and in Ethan’s own words at the time:

“Did Michael Gabrill attempt to extort money from us? Yes, he did, this is fact he has admitted to doing it here and on one of the many webpages he has set up in an attempt to cover his actions and his motives, claiming it was a test to see if we would incriminate ourselves. Incriminate us for what? Running a successful and legitimate campaign? Or refusing to pay him money not to do what he has done, something he threaten(ed) to do if we did not pay him.

What did Michael Gabrill do exactly? Well, he approached me the day after our campaign reached 100% funding which means in laymans terms when our campaign had received enough contributions for our campaign to be successful and for us to receive payment of the funds at the end of the campaign.

It took more than 30 days to reach our goal and our campaign to be fully funded. During this time, Michael Gabrill sat back and waited until there was enough motivation for us as campaign owners to if he could build enough fear of loss by the thought of him getting our campaign closed down to pay him money for his silence.

Why if Michael Gabrill if he really believed the campaign was fraudulent did he not immediately report it? Simple up until the campaign is 100% there would be no motivation for campaign owners to pay him a penny. This was never about him believing there was an issue with the campaign it was about his motivation to gain financially from a successful campaign. Something, we are sure he has done many times before.

Why do we think he has done this before? He waited until we were 100% funded, he claimed he could shut us down, he claimed that we had no intention of delivering anything to contributors and were going to steal their money and he wanted his cut or he was going to have us arrested for fraud.

Michael Gabrill’s only motivation was money, he sent me a link to his first webpage and told me if we paid him it would not go up. That webpage included photos of myself, details Michael Gabrill had obtained from my eBay account (which could only have been accessed by an eBay employee) and he claimed I was a creep or in Australian terms a sex offender. When I refused to pay him and reported him, he had the webpage active in less than 10 minutes. Only an extortionist would have a pre built webpage ready to go to force his victims into paying him to remove it.

Is our campaign is legitimate? Yes it is, we have registered businesses in Hong Kong and Australia, neither Mike or I have ever been investigated for fraud and we have both been successfully running business in Australia, Hong Kong and China for more than 25 years.”

To end the story, Ethan initiated legal action and managed to have all the slandering webpages created by Gabrill removed and received a public apology from the man himself too. In turn, Indiegogo went on to ban Gabrill completely from their platform.

This turned into a very time consuming and costly endeavor for Ethan but unfortunately, there are many Gabrills lurking in the shadows and waiting to pounce.

 

Bob Rohner – RG Energy

Bob signed up with us a few months after Ethan but his story is a different one in that his crowdfunding campaign didn’t really do too well at all. We tried our best but the ‘crowd’ seemed to think that what Bob was attempting to do was nigh impossible.

However, during the third week of his campaign. Bob received an email from someone claiming to be the owner of RG Energy, a company based in Ohio. Bob’s business was registered in Iowa. They emailed Bob stating that because they were using their RG Energy’s company name, he would have to pay $10,000 (yes, coincidently the same amount as Ethan was asked for) in license or royalty fees. What??

After a little research, it turned out that this goon had registered a company by the same name in Ohio AFTER Bob had launched his crowdfunding campaign thinking he could get money out of him by playing this little game. This led Bob to get his legal team involved and the problem swiftly went away.

 

The Scammers – Very few real ones but they are out there!
Intentional scams are very rare. During my time in the industry I have seen no more than 3 or 4 which were clearly scams from the very beginning.
Many labelled as scams today are situations whereby the people involved set out with good intentions, only to find out that what they are attempting to do is either impossible or far costlier than they expected. Crowdfunding campaign first, homework afterwards rarely works.
Julien (Courteville) Buschor – Launching Multiple campaigns helped him steal almost $400,000

During July 2015, a campaign on the Indiegogo platform called Smart Tracker 2 (ST2) caught my attention for the simple reason that it had raised over $20,000 within the first 24 hours. Normally, campaigns that gain this kind of traction so quickly have done their homework and are fully prepared with social media assets before launch. In most cases, they have a substantial number of social media followers. However, when I looked at the Smart Tracker accounts I saw that they barely had any followers at all. In fact, at the time, their Facebook page showed only 149 ‘likes’ and their Twitter account a measly 19 followers. Maybe they’d done a fantastic job of building a targeted email database before launch, was a thought at the time. My suspicions were aroused though which lead me to delve a little deeper.

I returned to the ST2 campaign page and began to scroll through their backer list. As I scrolled down to the very first backer, and began searching through the list of names, low and behold, I began to see some of the same names appear as backer’s multiple times and eventually realized that 7 or more user accounts had contributed to the campaign many times over – a clear sign of self-funding taking place. This raised alarm bells and prompted further investigation.

What I discovered was a first for me. A look at the user account profile that created this this ST2 campaign showed that this was the 4th campaign launched since the beginning of the year by the very same person – Julien Scherer (whose real name turned out to be Julien Buschor) and now it was only July? Ding..ding..ding. The alarm bells grew louder!

Upon further investigation I discovered that Mr Buschor first launched a campaign called Last Crime in January 2015 raising over $7,000 and claiming:

“Last Crime was made with cutting edge technology that can easily analyze data, provide facial recognition, perform phone and email scanning and much more”

A month later yet another campaign had launched by the name of Innovative Swiss Teeth Whitening Machine raising over $ 60,000 and with a tagline of “Swiss White Teeth, the most advanced swiss teeth whitening light with color screen and USB interface

A few short weeks later the Smart Tracker campaign launched and managed to raise just over $18,000. And finally, the ST2 campaign as initially mentioned above.

The answer to the question – How had the Smart Tracker 2 campaign managed to raise over $20,000 so quickly? –  was now fairly obvious as it was clear that Mr Buschor had rolled funds from his other campaigns into this new one.

Armed with this information, we reached out to Mr Buschor using a private email address and began a lengthy exchange of emails over the following few days. Initially he was panicked and changed user names on the campaigns listed above and sometimes became aggressive in his defense, but he did begin to accept that we knew his game. We threatened to report his campaign to Indiegogo and eventually, he did confirm that he had self-funded the ST2 campaign and his defense was made with a claim of “I’ve done nothing wrong as it’s legal so Indiegogo won’t cancel our campaign”

Mr Buschor self-funded his ST2 campaign to the tune of over $20,000, using money collected from previous campaigns to create a sense of popularity in the eyes of the public. No doubt in my mind that we were seeing a real con man in action!

As my marketing agency, Smart Crowdfunding is listed as a ‘Partner’ on Indiegogo itself, I reached out directly to their Trust and Safety division armed with all of the evidence needed to show that Mr Buschor had been scamming the public. I was certain they would listen, or at least reach out to me for more details. Nope. I received a canned email response saying very little except that they would investigate the matter. Did I hear back from them after this? Nope.

Of even more concern was that the ST2 campaign continued and on July 12th was promoted through the Indiegogo newsletter to a huge database of millions of people. Funding continued to ramp up and eventually the campaign raised more than $300,000.

Was it really a scam you may ask? Absolutely! The comments page on the ST2 campaign tells the whole shameful story!

As for Mr Buschor, he was resident in Switzerland and made local news for all of the wrong reasons as seen HERE

 

BioRing- The Amazing Ring That Made $460,000 Disappear

Now, this one had scam written all over it from the very beginning. However, even some notable Crowdfunding Marketing agencies were taken for a ride in the process too.

During mid-January 2016, we (Smart Crowdfunding) received an email inquiry from a Daniel Johnson asking about our services. After a few back and forth emails with our team, this lead to a Skype call booked for the 20th January. For some reason, they had to reschedule and we rebooked a time for 9am on 27th January, this time with a James Lee.

The call went ahead as planned, and James told me all about BioRing and that they were going to launch a crowdfunding campaign to raise the funds to manufacture the product and get it out there into the market. I explained our campaign development and marketing process, and the need to build an audience prior to launching. James asked if we would work on a percentage only basis to which I replied “No” and then went on to explain that without any validation testing we do not know if his product is a good fit for crowdfunding. Upon concluding the call I did say that I would email through our fee structure and the call ended.

My thoughts at the time were that what they were trying to do was nearly impossible, so a few days later I emailed again stating that after careful consideration I could not help them as I felt their product was impossible to develop.

We did not hear from either Daniel or James again.

The BioRing campaign eventually launched in June 2016 and did rack up over $700,000 in funding.

Fortunately, at least some of the backers were refunded, as Indiegogo did not release any of the InDemand money to the campaign owners. The total amount ‘stolen’ is now showing at $424,664 as of today’s date.

Now, that’s a lot of money and has, in effect, added to a community of backers claiming to never back another Indiegogo campaign again as can be clearly seen on the comments section of the BioRing campaign page. There are many other campaigns with such negative comments.

These disgruntled backers have a right to be pissed and there are hundreds of thousands of them who have supported other campaigns that are disgusted with the treatment they receive from Indiegogo themselves.

You can read more about this scam in this excellent investigative article from Sara Morrison here

The ironic thing with BioRing is that the marketing agencies involved – Funded Today (FT), Herscu and Goldsilver (H&G) and Command Partners (CP) – were up in arms when they didn’t get paid after the campaign concluded, having raised over $700,000. It surprises me that none of them thought that this campaign was nothing but a scam from the very beginning, considering FT were taking a 25% cut of funds raised, H&G a 10% cut and I assume CP a minimum 10%….so, a minimum of 45% off the top! Add to this the 5% Indiegogo platform fee and payment processing fees of around 3.5% meaning that BioRing were giving away more than 50% of the backer’s money!

A screenshot of the BioRing campaign team captured prior to the campaign been flagged as fraudulent. Since then all associated team members removed themselves from the campaign, most likely out of embarrassment. 


2017 Real Estate Crowdfunding Sites

Alphabetically

CrowdFundBeat Media, Copyright © All Rights Reserved

Report: Real Estate Crowdfunding Set to Be $5.5 Billion Industry in 2017

Also:  CrowdFunding Lists, Data, Analytics, Research, Statistics, Reports, Infographic

Crowdfund Beat Media, “2020 Prospect Report”the leading research and advisory and firm specializing in  crowdfunding solutions for private, public and social enterprises, has announced the release of its comprehensive 2017 CF-RE Crowdfunding for Real Estate report, which will provide the first ever detailed look at the intersection of real estate and crowdfunding. The 120-page report features data on the exponential growth of real estate crowdfunding, the emergence of specialized real estate crowdfunding platforms and how this revolutionary new method of real estate finance and investment is disrupting this asset class.

Interesting to note that some platforms are purely providing additive capital to sponsored deals, earning a fee for intermedition, while some are a bit more compensatory, with the inclusion of management fees and a carried interest. As of now, all are focused on accredited investors, though one has included DPOs in their mix. Here is the lists:

2017 Real Estate Crowdfunding Sites. Alphabetically

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Not in the list? News@crowdfundbeat.com

CrowdFundBeat Media Copyright © All Rights Reserved

SEC Metrics on Reg A+

On 12/31 the SEC published a report on Reg A activity as of Q3 that has some eye-opening bullets. Here are a few of the key metrics, along with my observations and musings.

  • 147 offering statements filed, of which 81 were qualified (as of the date of the stats)
  • Of the 81 qualified, 49 were Tier 2, 32 were Tier 1
  • 121 days avg time from filing to qualification (Tier 2)
  • 17% used broker-dealers (Tier 2)
  • $18M avg max-raise
  • 20% used “test the waters”
  • 87% equity/13% debt or other offerings
  • $50,000 avg legal costs to file & get qualified
  • $15,000 avg accounting audit costs
  • 50%+ of all issuers are incorporated in either Delaware or Nevada and located in California, Texas, Florida or DC-area
  • Typical issuer had no assets, no revenue, no net income (in other words, they are start-ups)
  • Real estate was dominant, accompanied by financial services

Thoughts on:

Time to qualification, 121 days (Tier 2 avg):
This puts an exclamation mark on the fact that this isn’t a Reg D, which can be launched overnight. If you want to allow non-accredited investors to participate in a large or continuous private offering, and if you want the securities to be free of various restrictions (e.g. Rule 144 on Reg D), then you are going to need to allow for the time it takes to get audited, prepare the offering statement, and go through a 121 day avg SEC qualification process (though I know of several that have been much shorter, it seems to depends upon the experience of the lead attorney).

Broker-Dealer Activity, 17%: This is the most disturbing metric to me. You’d think that every broker-dealer in the country with “private placements” as an approved business line would be jumping on the bandwagon as Reg A is a fantastic Reg D alternative. But they’re not. The reasons, from my experience, are…

  1. Brokers think Reg A’s are IPO’s. As such they expect the issuers to be mature companies that are ready to trade on OTC or NASDAQ. This is completely misguided, of course, as Reg A is simply an “unrestricted (private) security” and should not be confused with an S-1 filing IPO. The fact that it “can” trade on OTC or NASDAQ doesn’t mean it should. Brokers need to view this as a private placement, not an IPO.
  2. FINRA treats Reg A’s like IPO’s. As such they are limiting broker compensation to the same caps as an S-1 of a less risky mature company backed by far more detailed disclosures and easy settlement mechanisms. We hear from many brokers that FINRA’s comp-caps make it impossible for them to justify the risk or work involved in handling a Reg A, so they pass on these; which leaves issuers (and investors) to fend for themselves.
  3. Compliance Education. The internal compliance depts at broker-dealers are not yet up to speed on this type of offering and so are quick to say “no” to deals their investment bankers bring to the table.
  4. Technology. Conducting an online offering is easy in concept, and challenging in execution. The transaction engine, the compliance requirements, the supervisory issues, and the fact that escrow has to manage potentially tens of thousands of individual investors are daunting issues. (of course this is FundAmerica’s primary business, our software makes all this very easy for brokers and escrow agents)

=> Unintended Consequence: this is a situation where issuers could really use the guidance of a regulated broker-dealer, and the market and investors would be better for it. But regulators and compliance issues have caused issuers to say “no thanks, too much hassle, I’ll do this on my own.” In an age of General Solicitation, brokers are an optional expense/luxury as far as many companies are concerned, and with unclear or oppressive regulations they often (83% of the time) just skip it altogether.

Tier 1 Offerings, 40%. Stunning really, considering people filing under Tier 1 almost always have to get audited financials (as some states require them, e.g. CA), they have to pay filing fees that they could avoid with Tier 2, and they subject themselves to what can be extraordinarily painful “merit review” by some states.

Equity/Debt, 97% to 13%. This is a misleading metric and doesn’t really explain what’s happening or what investors are buying (in successful offerings). For instance, the equity sold in the Reg A’s for Realty Mogul* and American Homeowners Preservation* pay investors a defined income stream and have articulated exit mechanisms; Brewdog* investors feel they are buying into a culture; Elio Motor’s* fans (oh, I mean “investors”) were passionate about the concept and the mission; Fig* investors are excited about the games and projects. So the vast majority of successful Reg A’s have some sort of defined returns and/or benefits for investors that make them more than just equity securities being bought based upon technical merits and potential market gains. It’s critical that issuers, brokers and others in this market grasp this essential point, as we’ve seen several Reg A’s fail that did not do a good job with this.
* note that all of these companies are customers of FundAmerica, I cite them here only to illustrate a general point and am NOT making a recommendation or providing advice as regards their securities.

Test The Waters, 20%. This isn’t surprising, as the current method of testing the waters is clearly broken. This will be fixed with technology and the number will increase.

In summary, it’s apparent that 2016 was a fantastic first year for Reg A+. At FundAmerica our technology was used in over $300M worth of online investment transactions, including tens of thousands of investments and millions of dollars from Reg A buyers. With continued education, with more issuers successfully raising funds, and with the new Reg CF now taking care of the smallest, least-prepared issuers, it seems clear that the use of Reg A will grow exponentially in the coming years.

Best Regards,

 Scott Purcell
CEO
FundAmerica, LLC

 

About the Author: Scott Purcell is the CEO of FundAmerica, a fintech services provider to the emerging equity and debt crowdfunding industry. His firm provides escrow, payment processing, and compliance technology for numerous broker-dealers, investment advisers, portals and others who make a business of online capital formation pursuant to rules now in effect thanks to the  JOBS Act. FASTransfer is the only tech-driven SEC registered transfer agent focused on the crowd-industry. He is a founding Board member of the Crowdfunding Intermediary Regulatory Association (CFIRA) and the author of the book “The Definitive Guide to Equity and Debt Crowdfunding” as well as the “Industry Best Practices for Funding Portals”.

Legal Disclaimer:
These materials are my personal opinions and for informational purposes only and not for the purpose of providing legal or tax advice. I am not advocating, advising or recommending anyone purchase any specific or general investment of any type, ever. The issues discussed include complicated areas of law and legal advice should only be obtained and relied upon from a securities attorney about your specific circumstances.

Targeted IRRs in Crowdfunding

By Mark Roderick CrowdFunding Beat  Sr. contributing editor and crowdfunding attorney with Flaster/Greenberg PC.

 

Closeup sad young man with worried stressed face expression and brain melting into lines question marks. Obsessive compulsive, adhd, anxiety disorders
Closeup sad young man with worried stressed face expression and brain melting into lines question marks. Obsessive compulsive, adhd, anxiety disorders

Targeted internal rate of return, or IRR, is used widely to advertise deals on Crowdfunding sites, real estate and otherwise. While target IRR means something to sophisticated sponsors and investors, its widespread and uncritical use makes me a little uneasy, for the following reasons:

  • If pressed, many people don’t know what IRR really means. Investors assume that a higher IRR is better than a lower IRR, but many couldn’t explain exactly why or how.
  • IRR can be misleading. For example, a bond purchased for $100 that pays interest of $10 at the end of each of the first four years and $110 at the end of the fifth year has an IRR of 10%. A bond purchased for $68.30 that pays nothing for four years and $110 at the end of the fifth year also has an IRR of 10%. But those two investments are very different. The IRR calculation assumes that the $10 interest payments on the first bond can be reinvested at 10%, which is probably not true.
  • The IRR of a real estate deal (or any deal) increases when the asset is refinanced and the proceeds distributed to investors. But refinancing the asset doesn’t necessarily make for a better investment.
  • There being no such thing as a free lunch in capitalism, a higher IRR generally coincides with higher risk. For example, I can usually increase my IRR by borrowing more money. That relationship is not typically highlighted.
  • For a typical startup outside the real estate industry, IRR has no meaning. Or to put it differently, a 28% target IRR for a startup plus $2.75 gets you on the New York subway.
  • The term “target IRR” tends to mask what’s really important:  the factual assumptions concerning sales and asset appreciation. To say “We expect a target IRR of 18%” is somehow easier to sell than “We expect the property to appreciate at 6% per year.”
  • Under FINRA Rule 2210, offerings conducted through a broker-dealer may not advertise target IRRs. FINRA also prohibits Title III Funding Portals from advertising target IRRs, and the SEC prohibits new issuers from advertising a target IRR in Regulation A offerings, even for sponsors with extensive track records. Hence, target IRR cannot be used to compare offerings across all platforms and all deal types.

What can we do better as an industry? Here are a few ideas:

  • We can explain internal rate of return better, maybe with examples and a standardized presentation and graphics.
  • We can develop other apples-to-apples metrics for comparing deals.
  • We can make clear that higher IRRs generally come with higher risks.
  • In Regulation A offerings, and even in Rule 506(b) offerings where non-accredited investors are involved, the issuer is required to provide extensive information about the sponsor’s track record. Some version of that concept, applied consistently and allowing for side-by-side comparison, might be the most valuable information for investors.

Mark Roderick is one of the leading Crowdfunding lawyers in the United States. He represents platforms, portals, issuers, and others throughout the industry. For more information on Crowdfunding, including news, updates and links to important information pertaining to the JOBS Act and how Crowdfunding may affect your business, follow Mark’s blog, or his twitter handle: @CrowdfundAttny. He can also be reached at 856.661.2265 or mark.roderick@flastergreenberg.com.

2017 Crowdfunding Persons of the Year

 

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Sherwood Neiss, Jason Best. Principals Crowdfund Capital Advisors, LLC

Each year, Crowdfund Beat Media Group assesses the landscape of the crowdfunding industry to identify thought leaders and individuals significantly impacting the evolution of digital finance.   To culminate this search, the Group selects a Crowdfunding Person of the Year, whom it believes has made an indelible mark to advance adoption and growth of the crowdfunding effort.  With Title III of the JOBS ACT, effectively Regulation CF, went live past May, we have identified two individuals that have been working tirelessly and successfully in making crowdfunding a reality, and feel honored to recognize them as 2017 Crowdfunding Persons of the Year.

Jason Best and Sherwood “Woodie” Neiss are Principals at Crowdfund Capital Advisors, where they have advised government agencies, NGOs and global leaders on the merits of crowdfunding and its impact on entrepreneurial activity.   Prior to the expanse of their travels and relationships, including with the World Bank and InterAmerican Development Bank, they initiated Startup Exemption, with Zak Cassady-Dorion, which laid the foundation of the legislative framework that evolved into Title III.

2017-personoftheyear1

 

It is due to these past and ongoing contributions that Crowdfund Beat Media feels compelled and honored to award Woody and Jason 2017 Crowdfunding Persons of the Year.

By Jorge Sanchez, Crowdfund Beat Guest Editor,

Innovation and entrepreneurial activity is driven by entrepreneurs, their ideas, actions, and the relationships formed in the marketplace. While this has been the case for economic growth, the primary funding mechanism we have had in place is not a natural extension of these business processes. We have had a large proportion of the entrepreneurial class being underserved by the capital needed to fund or grow their ventures. This was because the current legal landscape prohibited it.  However, today if a tech startup or business needs capital they have modern technology at their disposal that enables them to leverage their social networks in order to fund their startup or grow their businesses.

As a result of the Great Depression, regulatory actions were taken that imposed limits on where entrepreneurs can seek funding. Fueled by fear and desperation, the risks and power of investing in our nation’s business opportunities were removed from the public and placed in the hands of banks and wealthy investors. Because most people did not have access to these investors, small business, and startup financing became a function of bankers and collateral, not innovation and market demands.

Fortunately, this flaw in our funding landscape has been mended. Through the actions of a few ambitious and determined men, decades-old financial regulation have been amended to reflect modern capabilities and economic reality. Today, markets don’t just function to determine which businesses survive, but also which businesses are born.

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Niess, Zak Cassady, Best

Sherwood “Woodie” Neiss, Jason Best, and Zak Cassady-Dorion are not politicians, they are not lobbyist, nor are they D.C. insiders. The men behind, perhaps the most important policy change of our lifetimes, are entrepreneurs. The three Thunderbirds are businessmen with experiences that awarded them with intimate knowledge about the needs of startups and the pains of raising capital. They did not just embark on a political journey, they instead created The Startup Exemption and to tackled head on the problem, making regulatory change. Their historic campaign lasted just 460 days, culminating in the framework that was adopted and signed into law by president Obama in April 2012.

The journey began with a problem that had been widely acknowledged, but was never addressed. The impact the group has and will continue to have is the direct result of their development of a solution with the collaboration of stakeholders and early thought-leaders like Kevin Lawton, Danae Ringelmann, and Steve Cinelli in the form of a framework that would later go on to become a part of the JOBS Act

In the halls of congress, the trio of entrepreneurs were an anomaly and there was doubt and pessimism that the group could accomplish their task at all, especially not with the absence of a large war chest and an army of lawyers. But perhaps that is exactly why the political neophytes were able to accomplish their lofty goal in a year and a half, instead of the five to ten policy experts predicted.

Those on The Hill turned out to be people that understood technology and how to leverage it, not the technological laggards that policy makers are commonly portrayed as. The group also discovered that they had tapped into a problem with universal support. During a time with an alarming unemployment rate, flat GDP growth, and a slowdown in the flow of cash from banks to small businesses, D.C. lawmakers were happy to be met with a solution for the biggest problem facing the nation.

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Sherwood Neiss, Karen Kerrigan , Jason Best, Douglas Ellenoff on May 16th, 2016 Capitol Hill in DC

In May 2016, Regulation Crowdfunding of the JOBS Act went live and the startup exemption become law. Over half a year later, we have seen a steady and methodical adaptation of the innovation. Jason and Sherwood are now principals at Crowdfund Capital Advisors (CCA), where they advise governmental leaders and stakeholders, like the SEC and the World Bank, on how to draft and implement crowdfunding in order to ignite job creation from the grassroots level.

When asked about the adoption of the regulation so far, the pair expressed optimism and satisfaction. They see success by how it is being embraced by the industry, thoughtfully and with care to ensure the integrity of the law is upheld and the balance of investor’s and entrepreneur’s needs and concerns are maintained. The crowdfunding community looks to amend the laws to further strengthen the fit between the needs of the entrepreneur and the laws regulating them.

Amendments to the original rules are coming to a boiling point. The Fix Crowdfunding act, proselytized by many within the crowdfunding world, aims to make the exemption more friendly and appealing to issuers by raising the limits on funds that can be raised, enabling the use of special purpose vehicles, and removing liabilities away from portals for the issuers who use their services. While any changes to the regulation are being carefully scrutinized to ensure adequate investor protection, Sherwood believes the regulatory bodies are motivated to support job growth by empowering entrepreneurs with access to capital. They will do so with the data and case studies that have been collected since the first iteration of the law went live in May 2016.

Jason and Sherwood’s outlook crowdfunding is bright, they see a thriving asset class which creates a new path to capital for underserved entrepreneurs who collectively make up the largest non government source of employment.

It is for these efforts and their continued commitment to the progression of Crowdfunding, that Sherwood Neiss and Jason Best are being honored as the 2017 Crowdfunding Person of the Year.

 

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New to Crowdfunding? Here’s What to Expect.

40Billion.com, Crowdfund Beat Guest Post.

With the popularity and success of crowdfunding as a new way to fund new projects, it’s easy for other aspiring entrepreneurs to believe that sites like Kickstarter are their golden ticket to launching a business. But the reality is, crowdfunding isn’t always as simple as it seems.

Whether you’re looking to raise a small amount of startup cash or acquire a larger sum through equity crowdfunding, there are a few challenges you might face during the process that you may not have expected.

cartoon concept for crowdfunding, businessman hand with light bulb and with money. vector illustration in flat design on blue background
cartoon concept for crowdfunding, businessman hand with light bulb and with money. vector illustration in flat design on blue background

Choosing the right platform

The first step is to choose the right platform. Not all of them are created equal. Platforms like Kickstarter or Indiegogo are great for raising smaller amounts of money, but equity crowdfunding portals are best for entrepreneurs looking for large sums of money. If you’re interested in the latter, it’s important to do your research and find the platform that meets your needs. Also, find an experienced attorney who specializes in equity financing.

Establishing a realistic goal amount and time frame

Many entrepreneurs, especially those new to the crowdfunding scene, tend to think that they will be able to quickly raise all the money they need and then more by the time their campaign ends. It’s important to be realistic about time and money when it comes to planning your campaign.

Consider how much capital you would need to take your business to the next major milestones, and don’t rely solely on crowdfunding sites for your fundraising.

Creating a buzz

Having a great business idea that is supported by friends and family is good, but it does not mean that the donations will come pouring in once you launch your crowdfunding campaign. Doing a lot of prep work before your campaign will help create and maintain interest in your project.

Before starting the project, gauging level of interest for your investment opportunity or project is a critical part of the process. Even though supporters have told you that they would support the campaign, it gets lost in their email inbox. Without specific requests, it’s difficult for people to actually pull the trigger on an investment or funding opportunity. Make sure you have personalized outreach to your first degree networks, and remember to ask for assistance in spreading the word.

When you’re ready to spread the word and create a buzz around your crowdfunding campaign or project, sites like 40Billion.com make this easy. They broadcast and promote your campaign to their large network of several million users across the most popular social networking sites for businesses – including Twitter, LinkedIn, 40Billion, and even Facebook. Innovative services like tweet ads and promoted company listings were created for crowdfunders to tap into a growing, active network online without spending thousands on pay-per-click ads or traditional advertising.

The risk factor

Everyone knows that there’s risk involved in any business venture. What investors want to know is, exactly how much of a risk will they be taking by offering you a large sum of money? Even small venture funds express interest in investing, but ask the entrepreneur to come back to them when they have an investor who is leading the round of funding. Everyone wants to know the amount of risk.

A lot of investors at the early stage simply want to de-risk investing by being the last money in the round once a lot of other sophisticated investors have already committed. This often creates a scenario where founders have a few hundred thousand dollars in “commitments” for months without any way to actually close on anything. Using a reputable equity crowdfunding platform with accredited investors can help solve this problem.

While the “lead investor” issue most commonly affects startups seeking large-scale investors, the same basic principle can apply to a smaller Kickstarter campaign: If potential funders see that no one is backing the project or that people are only contributing a few dollars, what incentive do they have to donate a large amount of money? This is where building interest and spreading the word become critical to raising the funds you need.

Even if you aren’t launching a crowdfunding campaign at this time, it’s important to learn about the industry, as well as what it takes to succeed.

Source:

http://upflow.co/l/5cIW/2017/01/02/new-to-crowdfunding-heres-what-to-expect-2

Crowdfunding: Can It Work for Brick & Mortar?

By , Crowdfund Beat Guest Post,

Founder + CEO of PieShell – Crowdfunding for food + beverage,

Having a store front or restaurant is expensive, especially when you’re just getting started. Between build-out and equipment costs, starting inventory, licenses, fees, and working capital, starting a brick and mortar business can easily add up to hundreds of thousands of dollars. It’s because of this that many people say that rewards-based crowdfunding isn’t a good option for brick and mortar businesses, but we beg to differ.

Crowdfunding is a great option for restaurants, bakeries, coffee shops, and more (if it’s done in the right way and on the right scale). We’re here to tell you how to make crowdfunding work for brick and mortar operations!

First, A Word of Advice

In previous blogs we’ve cautioned against being overly ambitious when it comes to crowdfunding. Instead, we advise breaking down your grand vision into a series of stepping-stones, picking one and making that the first stepping-stone for your crowdfunding project. Ask yourself, what’s the next step in my business?

We’re doubling down on this advice. If you’re already in business, we recommend using crowdfunding for upgrading or expanding your existing restaurant operation. You may want to invest in new kitchen equipment, renovate your space, or add new offerings to your menu. If you’re still pre-launch, then crowdfunding can be an excellent way to supplement funding from traditional sources like investors and banks. In fact, sometimes crowdfunding can be a precursor to traditional investment, as it shows that there is genuine interest in your venture.

For Existing Restaurants

Crowdfunding, much like running a restaurant, is time consuming and can be hectic. However, we think that brick and mortar businesses actually have a leg up when it comes to crowdfunding.

Unlike online-only businesses or those without a permanent location, owning a restaurant gives you the opportunity to interact with potential supporters in person and on a regular basis. Use this exposure to reach people who love what you’re doing and want to see it continue. Your “regulars” are the perfect people to tap for support, either by asking in person or advertising your crowdfunding project in your space (get ready to make some killer table tents!).

A great example of restaurant crowdfunding comes from Manu Alfau, chef and owner of La Bodega in Seattle, Washington. Manu used his existing customer base to raise $9,000 to build an outdoor patio. For gifts, he offered parties and food from La Bodega — things that he already knew his supporters would love.

For Startups

If you’re in the pre-launch phase, make sure that you’ve invested in the community where you plan to set up shop. That means doing things like being at local farmers’ markets, building an audience on social media that’s made up of people who are local to the area, and networking with other business owners to tap into their pool of customers.

Like we said earlier, it’s unlikely that you’ll be able to raise the full cost of starting a restaurant, so pick a reasonable crowdfunding goal and plan on supplementing it with personal funds, traditional financing, or a combination of both.

For startups, one advantage of crowdfunding is the opportunity to make people feel like they are truly invested in the success of your business. Simply put, crowdfunding is a way to create a sense of community ownership, which is incredibly important when it comes to sustaining a small business.

Gifts that Make Sense

Brick and mortar businesses also have a great opportunity to make a positive impression through gifts. Gifts should get people back into your establishment where they can experience the fruits of their contributions and also become repeat customers!

For example, in 2010 in the small town of Vergennes, Vermont, Julianne Jones and her husband decided to take over a former laundromat and transform it into a French-style bakery. They rewarded their supporters with tokens that could be exchanged for goods once the bakery opened.

Obviously, this strategy is limited to those in the area, so make sure to have a back-up plan for supporters who won’t be able to make it in person.

Meet OUR First Brick and Mortars

Ok, ok, there’s a reason that we chose to focus on crowdfunding for restaurants for this blog. We’re welcoming our first three brick and mortars to the PieShell family!

The first, The Cookie Cups, was live on PieShell at the end of 2016 and successfully reached their first stepping-stone, moving them closer to their bakery cafe dreams!

Second is Bon Chovie, a rock-and-roll seafood restaurant that started life at the “flea food market” Smorgasburg. They will be launching their crowdfunding project on PieShell in the next couple months to help fund the move to a new location in Brooklyn.

And last but not least, LC Farmery. A casual and engaging experience, connecting West Chelsea patrons to passionate craft producers from around the state via a rotating menu of locally sourced ingredients from farmers, fisherman, and purveyors, will be launching a project in the spring.

We’re excited to see them pave the way for many more restaurants to come!

2017 Who’s Who of CrowdFunding Industry Professionals

Who

2017 who’s who in CrowdFunding World

As you know CrowdfundBeat.com continues to grow as the preeminent  go-to source for all news and trends Crowdfunding related.  Our conferences are expanding  as part of our “World Tour” for 2017.

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Crowdfunding Beat Media Group, Conference & Expo 2017 USA Tour

New York City Jan 24th   –  Silicon Valley Feb 9th & 10th – 

Washington DC May 4th & 5th Denver October 2nd & 3rd.

 

For sponsorship opportunity contact: CFB@CrowdFundBeat.com  or call 1 888 580 6610
Name Last Name Comapany/Title Contact
Jay Abraham Business Growth Strategist
Dara Albright Dara Albright Media & FinTechREVOLUTION.tv @tothestoics
Kendall Almerico Crowdfunding and JOBS Act Expert @FundhubBiz
Antonio Arias CEO and Co-Founder Healthy Crowdfunder Corp -@alamidas – @healthvcfunder
Sydney Armani CEO Crowdfunding USA & Publisher of CrowdFund Beat Media Group armani@crowdfundbeat.com
Nav Athwal Realtyshares.Com nav@realtyshares.com
Douglas Atkin Guggenheim Partners
Joseph Barisonzi Leader Community Turnkey Crowdfunding
Chance Barnett CEO Crowdfunder
James Beshara CEO And Co-Founder Crowdtilt
Jason Best Co-Founder And Principal Crowdfund Capital Advisors @CrowdCapA
Nick Bhargava Co-Founder GROUNDFLOOR
 Bruce  Blankenhorn  COO Realty XE .com Real Estate CrowdFunding
Jim Borzilleri CEO, Crowdengine @crowdengines
Amanda Boyle CEO And Founder Bloom VC – @nowaffle
Salvador Briggman CEO Crowdcrux.Com
Ryan Caldbeck CEO Circleup, A Crowdfunding Platform For Accredited Investors
Patrick Calderon Founder Crowdco.co
Johanna Calderon-Dakin Co-Founder Crowdco.co
Chris Camillo Author Laughing At Wall Street: How I Beat The Prosinvesting @ChrisCamillo
 Aubrey  Chernick  Founder,  NextGen Crowdfunding  @AubreyChernick
Steve Cinelli   Financier, economist, author, artist. @stevecinelli
Dan Ciporin CEO And Venture Capitalist
Susan Cooney Founder & CEO At Givelocity
Trish Costello CEO & Founder Portfolia
Luan Cox CEO Crowdnetic @crowdnetic.com
Christopher.j Crippen Certified Crowd Funding Professional,
Daniel Daboczy CEO Fundedbyme @fundedbymeceo
Brian Dally Co-Founder & CEO, GROUNDFLOOR
Mat Dellorso CEO Of Wealthforge
Kathryn Diamond SVP Boston Private Bank, Wealth Management
Andrew Dix Co-Founder Crowdfund Insider
Tommaso D’Onofrio CEO Assiteca Crowd S.R.L.
David Drake LDJ Capital Soho Loft Capital Creation
Timothy C. Draper Draper Founder Partner Of DFJ
Peter Einstein Crowdfunding4all (CF4ALL) – Search Engine
Douglas Ellenoff  

EGS  Leading CrowdFunidng Firm

http://www.egsllp.com/attorneys/douglas-ellenoff

ellenoff@egsllp.com
Alex Fair Co-Founder And CEO Medstartr.Com @alexbfair
Michael Faulkner CEO Seedups @seedups
Ryan Feit CEO And Co-Founder Seedinvest @ryanfeit
Brad Feld Managing Director Foundry Group
Jonathan Frutkin Co-Founder Cricca Funding , Author Equity Crowdfunding
Samuel Guzik  

the JOBS Act Expert Guzik & Associates,

sguzik@guziklaw.com

Oliver Gajda Co-Founder And Chairman Eurcrowdfunding @olivergajda
Dr. Michael Gebert German Crowdfunding Network
Sandi Gilbert Founder & CEO Crowdcapital &Seedups Canada
Julia Groves UK’s    Http://Www.Ukcfa.Org.Uk/
Alfredo Guilbert COO Of Digital Film Cloud Network
Sara Hanks CEO And Founder Crowd Check @SaraCrowdCheck
Kevin Harrington Chairman Of As Seen On TV
Daphne Habets Crowdfunding Pro @ geldvoorelkaar.nl
Daryl Hatton CEO Fundrazr.Com
Jillian Helman Realty Mogul Jilliene@Realtymogul.Com
Adam Hooper Founder/CEO Of Realcrowd
Jessica Jackley Investor And Advisor, Collaborative Fund Co-Founder, Kiva @jessicajackley
 Barry E.    James  Author of New Router to Funding, Founder/CEO TheCrowdDataCenter/TheCrowdfundingCenter    @BarryEJames
Oscar A Jofre Founder/CEO KoreConX Corp. @oscarjofre
Paul Keating Founder And CEO Of Crowdcando; A Crowdfunding Platform For Events.
Karen Kerrigan President Small Business & Entrepreneurship Council @karenkerrigan
David Khorram Crowdfunding Evangelist Dkhorram@Crowdfundingplanning.Com
Candace Klein Founding Member Of Crowdfund Intermediary Regulatory Advocates (CIFRA)
Ronald Kleverlaan Senior Crowdfunding Strategist & Vice Chairman European Crowdfunding Network
Brian Korn Crowdfunding Attorney @BKorn@manatt.com
Luke Lang o-Founder Crowdcube @lukelang
Mark Lancaster CEO    CrowdKey, Inc. White Label CrowdFunding solution  markl@crowdkey.com @mtlancaster
Sang H. Lee Lee CEO & Founder At Return On Change
Howard Leonhardt Founder, Chairman And CEO Leonhardt Ventures @howardleonhardt
Alessandro M. Lerro Lerro Crowdfunding Italy
Jeff Lynn CEO And Co-Founder Seedrs @jeffseedrs
Peter Mackness UK Crowdfunding, Sponsorship, Brand Activation,
David Manshoory CEO, Assetavenue
Michael Markowski Crowdclassifieds.Com, Inc.
Jonathan May CEO and Founder,Hubbub, Director of UKCA
Matteo Masserdotti Founder@Tip.Ventures
Gene Massey CEO Of Mediashares Gene@Mediashares.Com
Blaine McLaughlin COO- VIA FOLIO mclaughlinb@viafolio.com
Matthew Mcgrath President And CEO Of Optimize Capital Markets
Congressman Patrick Mchenry One Of The Investment Crowdfunding Industry’s Most Resolute Champions
Scott E. McIntyre Secy. Board Of Directors CFPA , Director Phabriq Devp.; @scot_mcintyre
Jonathan Medved CEO At Ourcrowd
Brian Meece Rockethub Rewards Platform
Klaus-Martin Meyer Crowdfunding Blogger In Europe
Eric Migicovsky Founder Pebble Technology @ericmigi
Benjamin Miller Co-Founder, Fundrise Fundrise – Direct Public Offering Platform
Alexander Mittal Co-Founder And CEO Fundersclub@Mittal
Vincent Molinari Founder-CEO Gate Global Impact,Inc
Roy Morejon President Of Digital Marketing Agency Command Partners
Bill Morrow Co-Founder & Director Angels Den
Andrew Moss President Of Booster, LLC
Brock Murray CEO Of Joi Media, Makers Of The Katipult White Label
Paul Niederer Venture Capital & Private  Australian paul@raiseworth.com @paulniederer
Rodrigo Niño Prodigy Network’s Founder And CEO
Perry Niro Montreal, Canada Perry@Groupeavea.Com
Howard Orloff Crowdfunding-Website-Reviews
Jeremiah Owyang Web Strategy Www.Crowdcompanies.Com
DJ Paul Co-Chair CFIRA
Humphrey Polanen Managing Director Of I-Bankers Direct
Darren Powderly Co-Founder Crowdstreet, Inc.
Tanya Prive Founder And COO Rockthepost @tanyapri
Scott Purcell CEO Fund America   scott@fundamerica.com
Sam  Quawasmi  MD Eureeca
Georgia Quinn   CEO @ disclose.com  gquinn@idisclose.com
Mark Roderick mark.roderick@flastergreenberg.com  WWW.CrowdfundAttny.com  @CrowdfundAttny
Naval Ravikant Founder And CEO Angellist
Danae Ringelman Co-Founder And Chief Customer Officer Indiegogo @GoGoDanae
David S. Rose Founder And CEO Of Crowdfunding Site Gust
Slava Rubin CEO Indiegogo @gogoslava
Bishop Rodney Sampson Kingonomics
 Jillian  Sidoti  jillian@syndicationlawyers.com
Joy Schoffler Principal Joy.S@Leverage-Pr.Com
Eric Schreyer Journalist And Editor Crowdfundbeat Germany
Wil Schroter Founder And CEO Fundable @wilschroter
Marlon Schulman Founder & CEO Horror Equity Fund, Inc
Joanna Schwartz CEO Of Earlyshares
Barry Sheerman Member Of Parliament For Huddersfield UK Parliament @BarrySheerman
Barry Silbert Founder And CEO Secondmarket @barrysilbert
Rose Spinelli Coach, Trainer, Pitch Video Creator Thecrowdfundamentals.Com @TCFrose
Paul Spinrad Crowdfunding Advocate Investian
Duncan Stewart Director Of TMT Research Deloitte Canada @dunstewart
Yancey Strickler Co-Founder And CEO Kickstarter @ystrickler
Ron Suber President At Prosper Marketplace
Bryan Smith Co-Founder- Realty Wealth.com
Richard Swart  Chief Strategy Officer NextGen Crowdfunding @richardswart
Kevin Swill COO Of The Carlton Group
William Skelley CEO and founder of iFunding.  @SkelleyWilliam
Chris Thomas CEO Eureeca
Devin D. Thorpe Journalist, Author, Philanthropist @devindthorpe
Nadav Trenter Moser: Http://Www.Mimoona.Com/ Medugam@Gmail.Com
John Trigonis Indiegogo Author Of Crowdfunding For Filmmakers
Chris Tyrrell CEO At Offer Board @christyrrell
Andres Trujillo Founder-CEO Global GroupFund inc.
Katharine Voyles Mobley Chief Marketing Officer Wecarecard
Sam Vogel Co-Founder-Realty Wealth.com
Sonny Vu Misfit Wearables
Kim Wales  founder and CEO of Wales Capital @kimwales1
Mathew Walker Technology Enthusiast | Domain Name Broker | Ebook Author
David Weild Chairman & CEO At Issuworks
Noreen Weiss Adler, A New York–Based Attorney Who Has Written Extensively On Crowdfunding.
Darren Westlake CEO Crowdcube @DazWest
Joanne Wilson Co-Founder Gotham Gal Ventures @thegothamgal
Jonathan Wilson  Attorney Jwilson@Taylorenglish.Com
Sherwood Woodie Neiss Partner, Crowdfund Capital Advisors
Dr. Letitia Wright Wright Place TV Show
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How 2016 Reshaped Financial Services for Generations to Come

By Dara Albright,CrowdFunding BeatGuest Editor, FinTechREVOLUTION.tv  , Dara Albright Media,
The year began with the renaissance of the retail investor and it ended with a massive crowdfinance conference which centered – for the first time – around the actual crowd (“retail”) investor.2016 will be etched in time as one of the most unpredictable and metamorphic years in our planet’s history. While every fragment of civilization will feel the effects of 2016, the year will leave an indelible imprint on financial services, global political landscapes and mass media for generations to come.

In between was the successful completion of the Elio Motors Reg A+ offering, the first phase of investment product ingenuity through JOBS Act exemptions, the launch of the first retail retirement technology, the “fix Crowdfunding bill”, the introduction of Congressman McHenry’s new FinTech legislation aimed at fostering financial innovation, the implementation of Reg CF, lots of industry turmoil, a surprising Brexit vote, and perhaps the most controversial and suspense-filled U.S. election in history.

2016 was also the year that the Cubs finally won another World Series and I discovered the video selfie.

Before I underscore how all of these events will have monumental economic implications on 2017 and beyond, let me just take a moment to boast about the accuracy of last year’s predictions.

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 Last December I forecasted that:

  1. Robo-advisors will find opportunities in crowdfinance – Just as I predicted, ETF-centric robo-advisors made an entrance into crowdfinance this year. In early 2016, robo adviser, Hedgeable, first entered the crowdfinance space by offering its retail clientele opportunities to venture invest through leading equity crowdfunding platforms such as AngelList and CircleUp. A few months later, Hedgeable announced that it will soon be rolling out a peer-to-peer lending product. Furthermore, based on conversations that I’ve had in recent months with robo-advisory firms as well as with companies that develop technology for robo-advisors, I anticipate many more robo-advisors will soon be joining the party.
  2. Retail Financial Product Ingenuity will Escalate – As discussed last year, GROUNDFLOOR made history in late 2015 with its Reg A+ qualification to offer micro-investors small pieces of real estate debt. In 2016, two more companies broke ground in the Reg A+ arena: StreetShares and American Homeowners Preservation – offering retail investors the ability to capture both monetary and social returns through micro-investments into private businesses as well as individual mortgages, respectively. Companies like these are helping to inspire a new generation of retail alternative products. This type of investment product ingenuity is about to spread well beyond online platforms and marketplaces. I predict that any financial services business involved in the production or sale of alternative securities will soon look to expand distribution by taking advantage of this modern regulatory framework.
  3. Straight Equity Title III Offerings will Fall Flat – Indeed they have. According to NextGen Crowdfunding, a leading provider of crowdfunding deal data, investors have committed to invest slightly more than $15 million into Title III equity crowdfunding campaigns during 2016. $15 million equates to approximately 60 Hillary Clinton speeches or the amount that the U.S. national debt grew since you started reading this article. $15 million won’t even begin to scratch the surface of fixing our economic woes. To put it bluntly, $15 million is not an industry – it’s barely even a house in the Hamptons! Unless and until more creative hybrid financing structures are employed for Reg CF offerings, the market for Title III Offerings will remain insignificant.
  4. Reg A+ “Testing The Waters” will Call Attention to Serious Title II Crowdfunding Flaws – While no one really cared much about this issue in 2016, I do believe that the considerable disparity between total “indications of interest” and the amount of funding actually raised will eventually lead to regulatory amendments. It is completely misleading for a company to “advertise” that it has garnered sizeable funding interest without ever having to notify the public that it failed to raise even a fraction of the amount.
  5. The Crowdfinance Playing Field will Undergo Leadership Change – Wow, was I right about this one! Industry leadership has begun to undergo significant change in 2016 – particularly in marketplace lending. I stand by my statement that, “New leaders will rise. Some unexpected frontrunners will fall. The businesses that will best be able to oblige the retail customer, adapt to regulatory changes, and penetrate retail’s $14+ trillion retirement capital will prevail.”
  6. Hoverboards will Disappear from Toy Store Shelves – Uh, I meant to say Galaxy Note 7’s will disappear from the shelves. Yeah, yeah, that’s the ticket. (In the era of “fake news” this totally passé catchphrase deserves to make a comeback).

While some of my last year’s prognostications have yet to fully reach fruition, I’m still standing by all of my 2016 predictions. I’ve come to realize that predictions, much like karma, operate on their own timetable. Even some of the prophecies of the great Nostradamus were a year or two off. And, let’s not forget that Robert Zemeckis was just one year too early in forecasting the Cubs World Series victory.

Speaking of which, you are probably wondering what the Cubbies winning the World Series and video-selfies have to do with the future of personal finance anyway.

A lot. Maybe even everything.

The Cubs World Series win and video selfies are empowering underdogs everywhere. If the most mocked team in the history of professional baseball can win a World Series and amateur videographers can become universally recognized broadcast journalists, then long shots everywhere can achieve astonishing victories. Non-politicians can win presidential elections. Non-lawyers can prevail in litigation. Small businesses can access capital as freely as large corporations. And primarily due to crucial advancements in micro-investing technology, even investing novices will be able to outperform financial experts. At long last, the little guy can have just as much of an opportunity to create wealth as the George Soros and Warren Buffet ilk.

This brings me to my bold 2017 predictions (or as Ron Suber would likely call them “Big Hairy Audacious” predictions).

  1. Underdogs across the land will triumph in 2017 – The Chinese predict that 2017 will be the year of the rooster. I disagree. I believe that 2017 will be the year of the Rudy.
  2. The broader markets will correct – I foresee the broader markets headed for a crash – triggered primarily by manipulators, speculators and years of unsustainable monetary policy. Our public equity markets have been artificially propped up by policy for far too long. America simply can’t keep lowering rates and printing its way to prosperity. Interest rates have nowhere left to go but up, particularly if Trump makes good on his economic plan and we see some real economic growth. I foresee rate hikes leading to a stock market correction. Although it may be a short-lived correction, those who are well-diversified and have allocated some capital to less volatile, less correlated asset classes, will be better able to weather the storm.
  3. The face of financial media will Become Unrecognizable – In 2016 the established media awoke to the revelation that it no longer holds the relevancy that it did in previous generations – something housewives on Facebook have known since about 2008. Although it tried hard not to accept it, traditional media has been hemorrhaging influence for quite some time now. Just like how the video killed the radio star, how Napster crushed the CD, how Netflix annihilated Blockbuster and how Amazon overtook Barnes & Noble, communications technology is on an unstoppable path to demolish mainstream media. While bloggers have been gaining prominence for years at the expense of print media, it will be the video-selfie that delivers mainstream media its final blow. Financial media is no exception. The 2016 U.S. presidential election established social media – not television – as the dominant medium. Clearly, more people tuned into Infowars than to Rachel Maddow. If the video selfie can help influence a U.S. election, its impact on financial services will be colossal. Expect financial content to become edgier as well as more engaging, encompassing and interactive. Expect new financial voices to emerge and gain prominence. Most significantly, expect these new financial media players to forever transform the way people invest, where people invest and how people invest.
  4. FinTech will Expand into Older Demographics – I see countless FinTech business plans. Most of them are loaded with statistics on millennials, ideas for targeting millennials and even pictures of millennials. Yes, many of us industry folks are well-aware that millennials prefer having a root-canal than going to a bank. However, FinTech is not a millennial-centric market. I predict that 2017 will be the year that FinTech crosses demographical thresholds. I expect that older demographics will start incorporating FinTech into their daily routines. As a result, I envision more FinTech innovation being directed towards developing products for other generations, particularly retirees.
  5. The U.S. retirement infrastructure will begin to undergo monumental transformation in 2017 – The $14 trillion retail retirement industry is on the cusp of great transformation. Thanks to the progression of FinTech, RegTech and AltTech, the retirement industry is about to become fairer, simpler and more inclusive. Expect regulatory and technological innovations to be introduced that will unwind a broken and unjust retirement system. Expect retirement plans to become more consumption driven than employment-based. You can also look forward to seeing the mass adoption of game-changing financial products that will give everyone – including present retirees – a fighting chance to prosper throughout their senior years.

The story of financial services is unfolding and it is growing more fascinating by the minute. And I am truly grateful to be alive at this particular moment in time to witness it firsthand.

Anyone who has read my previous year-end articles knows how reflective I tend to get as I approach my Christmas Eve birthday. And this year I am especially pensive given the fact that I am turning 29 (again) and that mercury is in retrograde and that Uranus (pronounced: “Your Ron Issss”) is, well it is somewhere in the universe doing something to affect my mood. Whenever that happens, I tend to seek inspiration in a poem, a lyric or even in just one simple word.

It is for this very reason that I subscribe to dictionary.com’s word of the day. On December 16th, dictionary.com’s word of the day was “hotsy-totsy” and it means, “about as right as can be”. Because I vowed to find a way to incorporate this quirky “makes-you-feel-like-skipping” word into an article, I would like to simply conclude by wishing everyone a joyous holiday season and a very hotsy-totsy 2017!

Originally published on Dara Albright Media.

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Dara Albright – President of Dara Albright Media, Co-founded the FinFair ConferenceFinTechREVOLUTION.tv

Recognized authority, thought provoker and frequent speaker on topics relating to market structure, private secondary transactions and crowdfinance. Welcome to my new personal blog where you can glean unique insight into the rapid transformation of global capital markets.

 

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