Monthly Archives: August 2016

Improving Legal Documents in Crowdfunding: New Tax Audit Language for Operation Agreements

By Mark Roderick CrowdFunding Beat  Sr. contributing editor and crowdfunding attorney with Flaster/Greenberg PC. Last year I reported that Congress had changed the rules governing tax audits of limited liability companies and other entities that are treated as partnerships for tax purposes. The changes don’t become effective until tax years beginning on or after January 1, 2018, but because most LLCs created today will still be around in 2018, it’s a good idea to anticipate the changes in your Operating Agreements today. Under the current rules, the IRS conducts audits of LLCs at the entity level through a “tax matters partner” (normally the Manager of the LLC), and…

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Worried About Fraud with your Self Directed IRA? SEC says, Ask a Financial Advisor

By Kirk Chisholm Wealth Manager and Principal at Innovative Advisory Group (IAG), CrowdFund Beat Guest post, If you are worried about the risks of fraud when using a self-directed IRA, then do as the SEC recommends in their Fraud Alert, “Ask a professional”. In their September 2011 Investor Alert, Self-Directed IRAs and the risk of fraud , the SEC outlined typical fraud risks when using a self-directed IRA. The top three self directed IRA fraud risks that they focus on are: Misrepresentations regarding custodial responsibilities Exploitation of tax-deferred account characteristics Lack of information for alternative investments While these may be common fraud risks that the SEC sees…

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Commercial Real Estate Crowdfunding


Join host Michael Bull and his guest, Brian Korn from Manatt, Phelps, and Phillips, as they discuss strategies and tips for investors and sponsors

An Investment Decision – Single-Family Homes vs Multifamily Properties

Crowdfund Beat Editorial, Real estate investing has long been an enticing option for entrepreneurs looking to expand and diversify their investment portfolios, and for good reason. The housing market crash of the last decade has resulted in a hot rental market, as many Americans are choosing to forgo buying in favor of renting for flexibility and affordability. If you’ve been considering a foray into real estate, you’re not alone in your desire. Many are throwing their hats into the landlord ring, and hoping to make sustainable profits that cushion retirement funds and serve as immediate supplemental income. Before making an offer on a property, there’s…

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What to Know Before Purchasing a Restaurant Franchise

  Franchises have proven to be a lucrative venture for savvy investors, and the restaurant industry continues to remain a popular option for entrepreneurs looking to expand their business sights. While in theory it sounds like an easy venture—buy a pre-existing business that’s proven to be successful and oversee it—in reality, the ins and outs of securing and maintaining a restaurant franchise can be time-and-cost intensive. Consider the following facets of franchise endeavors and determine whether this venture is right for you. Raise the Funds While opening a franchise restaurant is generally much cheaper than starting a restaurant from scratch and building it from the…

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Regulation A Timeline

By Mark Roderick CrowdFunding Beat  Sr. contributing editor and crowdfunding attorney with Flaster/Greenberg PC. “How long will it take?” That’s one of the two questions I’m asked most often about Regulation A. The answer is that if everything goes smoothly, it should take about 20 – 24 weeks from the day an issuer decides to raise money using Regulation A until it begins selling securities. Every company is different, of course, and lots of things can delay the process, but 20 – 24 weeks is a good rule of thumb. With this Regulation A Timeline, I hope to provide issuers and their advisors with a framework for conducting…

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Understanding the 1031 Exchange and How it Affects Investors

By David Wieland, CrowdFund Beat Guest Post, The following is a guest post written by Realized Holdings, a valued WealthForge partner who helps investors reinvest their 1031 equity. With commercial real estate values at an all-time high, there’s been a lot of buzz about 1031 exchanges. Why all the excitement? For starters, investors can save 30% to 40% in taxes on the sale of their investment property by completing a 1031 exchange. While tax code may be boring, saving money is not. A 1031 exchange allows investors to defer payment of capital gains taxes when they sell properties by reinvesting or “exchanging” their equity into “like-kind” replacements.…

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SEC: Investment Adviser Boasted

SEC: Investment Adviser Boasted

FOR IMMEDIATE RELEASE 2016-161 SEC: Investment Adviser Boasted Phony Assets and Track Record, Stole From Client Washington D.C., Aug. 11, 2016 — The Securities and Exchange Commission today announced fraud charges against a San Francisco man and his investment advisory firm accused of pretending to manage millions of dollars in assets and then stealing money from the first client who invested with them based on their misrepresentations. The SEC alleges that Nicholas M. Mitsakos and Matrix Capital Markets, which is a state-registered investment adviser in California, solicited investors in a purported hedge fund while falsely marketing themselves as experienced money managers with a highly successful…

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The Tax Implications of Starting Your Own Business

Starting a small business is rife with regulations, tasks, and endless streams of expenses. One thing many entrepreneurs don’t consider at the onset of a new business is the major tax implications this venture can have. Check out what you can expect from the IRS after deciding to start your own business. Consider Your Business Structure As you begin your venture, consider how you’re going to structure your business. Will you classify your business as an LLC, partnership, S-corp, or C-corp? Many small business owners elect to declare their business as an LLC because this structure typically provides a larger amount of protection and a…

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iDisclose Launches a Free “SEC Scrubber” Tool for Crowdfunding Issuers

iDisclose Announces Free Online Tool to Conform Documents to SEC Acceptable Format NEW YORK, NY–(Marketwired – August 17, 2016) – iDisclose announced today that it is offering a free online service to help issuers and their counsel submit the required crowdfunding documents to the Securities and Exchange Commission. iDisclose CEO Georgia Quinn explained that “we have noticed a lot of people are having trouble uploading the required documents to the SEC’s online system known as EDGAR. This is due to the finicky nature of the system and somewhat archaic technology it uses. Several issuers’ uploads were getting bounced and the error messages were indecipherable.” Many…

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Intermediaries, Trust and Equity Crowdfunding

By Paul Niederer CrowdFundBeat Sr. Contributing Editor Intermediary-controlled trust has been the main game in selling shares and equity since the 1930’s. That is why regulators have latched onto intermediaries, and their existing regimes to regulate the emergence of crowdfunding. However intermediary-less trust is on its way. A truism that is getting stronger and stronger is that “the crowd will catch a bad actor long before the regulator will”. The persistent focus on intermediaries by regulators means that they have not empowered the assistance the crowd can give in keeping equity crowdfunding participants honest. If blockchains become the new way to evidence trusted equity crowdfunding transactions we…

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Crowdfunding Aggregators Help Investors Gain Efficiency, Convenience

By Jorge Newbery,  CrowdFundBeat contributing Guest Editor,  Founder and Chief Executive Officer of American Homeowner Preservation LLC Crowdfunding is predicted to account for more funding than venture capital in 2016. This relatively new tool is rapidly emerging as a powerful capital-raising option for startups, small businesses, and real estate operators. Equity crowdfunding, or investment crowdfunding, empowers investors to fund ventures in return for equity or debt. But with countless deals available on a wide range of online platforms, would-be investors may not know where to look for deals, or may feel overwhelmed by the abundance of choices. In order to help potential investors navigate this sea…

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HEADLINE NEWS

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SEC to regulate crowd-fundingInquirer.netThe Securities and Exchange Commission is set to regulate crowd-funding activities in the country to protect the investing public from the abuse of fund-raising innovations typically designed for start-up companies. Crowd-funding refers to a me [...]

LivemintCrowdfunding Indian hopes and fearsLivemintOver the last few years, crowdfunding websites such as Milaap have become a repository of connected India's aspirations and anxieties. They clearly highlight our country's big failures in the areas of health and education. T [...]

5 Tips for Running a Successful Crowdfunding CampaignHuffPostTake time to really research which crowdfunding platform (Kickstarter, Indiegogo, Crowdrise, etc) is best. Don't only talk to the teams there, but also talk to people who have run crowdfunding campaigns on that platform [...]

CNBCSome crowdfunding donors could be accidentally breaking tax lawsCNBCDonors may face tricky gift-tax rules, non-deductible donations and a lack of accountability when contributing online.and more » [...]

CampaignLiveMother-backed incubator Broody acquires a 5% stake in crowdfunding platformCampaignLiveCrowdfunding is part of a societal shift towards world-class brands demonstrating measurable social impact, Pippa Dunn, co-founder of Broody, said: "It's therefore integral to [...]

Eater San DiegoNorth Park Distillery and Restaurant Launches Crowdfunding CampaignEater San DiegoA new distillery and restaurant in North Park is taking to crowdfunding to get the project to the finish line. 619 Distillery & Tasting Room, which is in construction at the corner of [...]

Bankless TimesWhy do crowdfunding campaigns fail?Bankless TimesFor a start, a crowdfunding page is only one of the elements that you need to complete as a business. You should also set up a business site – you can even do it yourself if you follow the instructions on https://WebsiteBu [...]

Financial TimesMonzo plans crowdfunding push to deepen ties with customersFinancial TimesBanking app Monzo is planning to launch one of the UK's largest crowdfunding efforts next year to give customers in the fast-growing bank what it calls “a greater share of ownership”. Tom Blo [...]

Khaleej TimesUAE mulls regulation for crowdfunding - Khaleej TimesKhaleej TimesThe Central Bank of the UAE is looking at regulation for crowdfunding in the emirates as part of measures to boost financing for small and medium enterprises, ...UAE credit growth seen in high single digits [...]

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