Monday, November 21, 2016

Marketing an Investment Crowdfunding Campaign in North Carolina - Webinar Coming Dec 5th

By Roy Morejon
www.commandpartners.com

In 2015, my agency ran an investment crowdfunding campaign for Digitzs, a new payment platform.

Digitzs is a groundbreaking, patent-pending platform and mobile app where merchants get paid next day and can choose their Visa or MasterCard fees (from 0 to 3 percent). The system caters to a trillion dollar marketplace: merchants in the middle who don't swipe cards or use shopping carts. Laura Wagner, founder of Digitzs, recognized that navigating the waters of a fast-growing and ever-changing equity crowdfunding space can be difficult, so she sought the expertise of our team.

Roy Morejon
We teamed up far in advance of the launch of Digitzs’ initial equity raise. The goal was twofold- Digitzs needed to garner support from investors, while also gaining name recognition to prove market viability.

Command Partners was able to offer a full range of services to help make the Digitzs campaign a success, including:

  • Developing a pitch deck used for investor and media outreach throughout the campaign
  • Managing Digitzs social media accounts
  • Handling investor outreach across multiple platforms and coordinating meetings between investors and the Digitzs team
  • Designing and developing landing pages for driving investor, media and general traffic
  • Writing scripts and storyboards for videos specific to investors and the media
  • Creating and distributing press releases to targeted media lists, pitching stories to journalists and securing media coverage
  • Designing web pages, branded headers, press inserts and other graphics

While working with us, Digitzs exceeded their investment goal and went on to get over $8M in commitments.

This was our first equity campaign, which was exciting in and of itself, but it was exciting for another reason: Digitzs marked the beginning of a new era of investment crowdfunding for Command Partners.
The Future of Investment Crowdfunding in NC
On May 16, 2016, the SEC allowed Title III of the JOBS Act to go into effect, making investment crowdfunding legal throughout the country by allowing non-accredited investors to invest in startups and small businesses. Shortly thereafter, on July 22, the NC PACES (Providing Access to Capital for Entrepreneurs and Small Business) Act, was signed into law by Governor Pat McCrory. Now that there are federal and state laws regulating investment crowdfunding, my agency can begin to work with new companies raising capital through investment crowdfunding across North Carolina.

Now is an exciting time for these new investment crowdfunding laws to take place. In 2015, funding from investors for North Carolina companies grew 122 percent, to $1.18B. Here in Charlotte, the startup climate keeps getting better. The Kauffman Index of Startup Activity ranked the Charlotte metro area as the 25th best place for startup activity, up from number 28 in 2014. The rate of new entrepreneurs is also up from 2014, at 0.29% compared to 0.26%. This makes sense given the vibrant startup community within Charlotte.

Consider HQ Charlotte, for example, formerly known as Packard Place. HQ Charlotte at Packard Place caters to entrepreneurs and startups, offering co-working spaces, suites and more within their 90,000 sq. ft. space in the heart of uptown. Additionally, Packard Place is home to six world-class accelerator programs that help launch new companies right here in Charlotte.

With so many great opportunities for startups in North Carolina and here in Charlotte, we’re looking forward to a bright future for investment crowdfunding. If you need help marketing an investment crowdfunding campaign, contact us today.

Learn from Industry Leaders...
A live webinar presented by StartEngine's CEO Ron Miller, Command Partners' CEO Roy Morejon and Smith Anderson Partner Benji Jones. This webinar will focus on the legal, marketing and platform components to raising capital through Regulation A+ and Regulation Crowdfunding, or as we like to call them, small and large Online Public Offerings (OPO).
Topics covered will include:  
  • What is an OPO?
  • What today's OPO landscape looks like - how this differs from rewards based "crowdfunding"? 
  • Regulation A+ and Regulation Crowdfunding - what they are and how they are different
  • How Elio Motors raised almost $17M in capital 
  • What needs to be done to market and promote a campaign - how and when can you market your deal?
  • What are the biggest legal and compliance issues to consider? 
...and more! This is a session you don't want to miss!

December 5, 2016  |  1:00 - 2:00 PM EST



Roy Morejon brings over 20 years experience in delivering integrated marketing services for B2B and B2C clients, helping transform companies by increasing online visibility and brand awareness through targeted digital marketing, corporate communications and data-driven search marketing campaigns. He is an expert at digital strategy, analytics, search engine marketing and crowdfunding. As a trusted advisor to dozens of global startups, Roy is a key player in the local Charlotte marketing community, serving as co-founder of the Digital Marketing Association, regional chair for the Business Marketing Association and founder of North Carolina Businesses for Social Responsibility.



Saturday, August 6, 2016

FAQs About the New North Carolina Crowdfunding Law, the NC PACES Act

By Jim Verdonik

I am part of  the NC PACES Act team that provided advice to the State of North Carolina about enacting our new state crowdfunding law called the NC PACES Act. Below is a link to some FAQs I wrote that summarize the resulting North Carolina crowdfunding statute that was enacted in July 2016.
Jim Verdonik

There have also been some proposed changes to SEC Rule 147 which are important to allow more businesses to use state Crowdfunding laws, and these are also summarized in the post.

Click here to see my NC PACES Act FAQs post on my blog.


Jim is an attorney with Ward and Smith PA. You can reach Jim at JFV@WardandSmith.com.

Also check out his business related videos at www.YouTube.com/eLearnSuccess

Jim writes a column about business and law for American Business Journals.

You can purchase his book Crowdfunding Opportunities and Challenges at Amazon.


Friday, July 22, 2016

Governor Signs North Carolina Investment Crowdfunding Bill

By Mark Easley Sr.

The NC PACES Act, “Providing Access to Capital for Entrepreneurs and Small Business”, was signed into law today by Governor Pat McCrory. The bill passed both the NC Senate and NC House by unanimous votes during the short session, and North Carolina now joins over 30 other states that have passed similar laws. The NC PACES Act enables a new way to finance startups and small businesses in our state known as investment crowdfunding.

Kevin Herrington, Mark Easley, Benji Jones, Gov. McCrory, Secretary Skvarla, Senator Barringer
at the signing of the NC PACES Act investment crowdfunding bill.

The creation and passage of the NC PACES Act investment crowdfunding exemption was a team effort by the General Assembly, the NC Secretary of State Securities Division, the NC Commerce Department, the Governor’s office, and our North Carolina startup community and small business supporters. The bill was originally co-authored by former Representative Tom Murry, and the now retired head of the Securities Division David Massey, and was at the time known as the NC JOBS Act. This exemption became a model piece of legislation that was used as the basis for many of the crowdfunding exemptions passed in other states. Many thanks are due to Tom and David for creating this groundbreaking securities law concept which is now helping to finance small businesses and create jobs all over the country. The bill was then brought to the Senate with some enhancements by chief sponsor Senator Tamara Barringer, and became known as the NC PACES Act. We are grateful to Senator Barringer for her hard work and advocacy for the bill.

We would also like to thank all of those in the executive branch who supported and advocated for the bill, including Governor McCrory, Lieutenant Governor Forest, Secretary of State Marshall, Commerce Secretary Skvarla, and their staffs including Mike Arnold, Kevin Harrington, Ashley Jones, John Hardin, and all those who contributed to the effort.

On the legislative side we would like to thank the other chief sponsors of the bill including Senator Gunn and Senator Hise, and Representative Shepard and Representative Hastings and their staffs. In addition, NC Congressman Patrick McHenry, who created the federal JOBS Act, also supported our efforts.

The North Carolina startup and small business communities are supporters of the bill. We would like to thank the following supporters:

Joan Siefert-Rose – CEO of CED and staff
Larry Robbins – Founder and partner at Wyrick Robbins
Joseph Nixon – NC Biotech Center
Bill Warner – Entredot Small Business Accelerator
Jim Roberts - Wilmington startup community leader
Dan Roselli - Charlotte startup community leader
Chris Heivly and Dave Neal – Startup Factory
Jason Widen – HQ Raleigh
Adam Kline – American Underground
John Austin – Groundwork Labs
Lister Delgado – IdeaFund Partners
Wade Fulghum and Lewis Sheets – NC State Entrepreneurship Initiative
Brooks Raiford – NC Technology Association
John Demers – Film and TV production community leader
The NC Chamber

We would also like to thank the local press that provided balanced coverage of the bill and its importance to North Carolina small business over the last several legislative sessions: Rick Smith of WRALTechwire, Laura Baverman of exitevent.com, Lauren Ohnesorge of Triangle Business Journal, and Mark Binker of WRAL.

Last but not least, I want to send very special thanks to our small but dedicated NC PACES Act team that voluntarily worked hard to make this happen, and to give back to the community and state. None of this could have happened without the dedication and hard work of this team:

Benji Jones – Partner at Smith Anderson
Jim Verdonik – Partner at Ward and Smith
Brooks Malone – Partner at Hughes Pittman Gupton CPAs
Steve Reaser – Small businessman
Nick Bhargava – Co-founder of real estate crowdfunding site Groundfloor
Mital M. Patel – Attorney at Wyrick Robbins

When we work as a team, good things happen. Thanks to all for your efforts.

Best regards,
Mark Easley Sr.
NC PACES Act Team leader,
Startup and small business advisor, and crowdfunding advocate

Additional coverage including video of today's signing ceremony:



Signing Event Video on YouTube
Secretary of State Announcement Newsletter




Friday, July 8, 2016

Press Coverage of the Passage of the NC PACES Act

The passage of the NC PACES Act investment crowdfunding exemption bill has been in the news in our local press in the Triangle. The Governor is expected to sign the bill shortly.

WRAL Techwire has a post on NC Secretary of State Praises Crowdfunding Bill, and another one on NC's Crowdfunding Law: What it means, an Attorney's View.

Triangle Business Journal reports NC PACES is Headed to the Governor's Desk.

The News and Observer has a post on NC Crowdfunding Law would provide a new way for companies to raise capital.


Wednesday, June 29, 2016

We Made It! NC PACES Act to Become Law

By Benji Jones

The NC PACES Act: “Providing Access to Capital for Entrepreneurs and Small Business” has been passed by the NC House by a vote of 114 to 0, the NC Senate by a vote of 49 to 0, and is now headed to Governor McCrory for his signature.  After 3.5 years in the making, intrastate investment crowdfunding is finally coming to North Carolina!  
 
Senator Tamara Barringer
Senator Tamara Barringer, co-sponsor of the bill, states: “The NC PACES Act has passed the North Carolina House and Senate unanimously, paving the way for small businesses to raise much needed capital, providing jobs and opportunities for North Carolinians.”

What does this mean? 

A North Carolina business will be able to raise up to $1 million in any 12-month period (or up to $2 million with audited or reviewed financial statements) from investors who are North Carolina residents.  There are no wealth or income limitations on who can invest; however, investors who are not “accredited” may only invest $5,000 in a particular venture in any 12-month period.

Companies will be permitted to promote the offering publicly, after filing a notice (as well as substantive disclosures) with the Securities Division of the North Carolina Secretary of State.  A fee of $150 will also be charged.  Companies are required to communicate in writing the business plan, financials, use of funds, and risks of the offering. Investors are required to certify in writing at the time of sale that they understand the risks of purchasing unregistered securities and that they may lose their entire investment.

Companies may (but are not required to) use a professional crowdfunding intermediary that meets the requirements established by NC PACES and related rules.  They are required to establish an escrow to hold funds prior to closing.

Benji Jones
Companies that issue securities under NC PACES will be obligated to provide quarterly reports to investors discussing management compensation, operating results, and financial condition, etc.

When can we start?

Companies can start gathering materials, preparing disclosures, and consulting advisors now.  However, you will not be able to formally pursue investors under NC PACES until the Securities Division of the North Carolina Secretary of State’s office adopts specific rules to implement the provisions of the Act.  The Secretary of State’s office has played a critical role in formulating this exemption and, although the law gives it a 12-month period to act, hopefully, it will give implementation of these rules highest priority. 

There are some details to iron out so stay tuned here for more updates.   

The content contained on this blog does not provide, and should not be relied upon as, legal advice. It does not convey an offer to represent you or an attorney-client relationship. All uses of the content contained in this blog, other than for personal use, are prohibited.

Benji Jones is a partner at the Smith Anderson law firm with extensive experience in representing companies in exempt and non-exempt securities offerings.  Feel free to reach out directly to the author with questions or comments.



Monday, June 27, 2016

NC PACES Act Passes NC House by a Vote of 114 to 0

SB481, which includes the NC PACES Act crowdfunding exemption as Part I, was passed by the NC House by a vote of 114 to 0 tonight. The bill has been referred back to the Senate for final approval of a new and unrelated Part III to the bill called ‘Prohibit Cities from Charging Fees for Utility Use of Right-Of-Way’ which was tacked on by the House. Please click on the Track Progress of S481 to the right for the status of the bill and to view the latest version of the bill known as Edition 5.






Thursday, June 23, 2016

NC PACES Act Passes Second Reading on NC House Floor by a vote of 99 to 1

SB481, which includes the NC PACES Act crowdfunding exemption as Part I, was fast tracked to the NC House floor and passed second reading by a vote of 99 to 1 today. The bill has been put on the NC House calendar for final vote on Monday 6/27. Yesterday the NC House finance committee attached a new and unrelated Part III to the bill called ‘Prohibit Cities from Charging Fees for Utility Use of Right-Of-Way’. Please click on the Track Progress of S481 to the right for the status of the bill and to view the latest version of the bill known as Edition 4.




Monday, June 20, 2016

NC PACES Act Passes NC Senate by a Vote of 48 to 0

Tonight the NC Senate passed SB481 which includes the NC PACES Act crowdfunding exemption as Part I of the bill. The bill passed the second and third reading by a vote of 48 to 0, and was sent on to the House by Special Message. This is a significant step forward for the bill, which enables a new way of raising capital for North Carolina startups and small businesses using investment crowdfunding. Senator Barringer and Senator Gunn spoke on behalf of the bill.





Wednesday, June 15, 2016

NC General Assembly Moves Ahead with Intrastate Crowdfunding Bill in Short Session

By Benji Jones

Today the NC Senate Finance Committee considered SB481, the NC PACES Act: “Providing Access to Capital for Entrepreneurs and Small Business” and passed it by unanimous voice vote. The bill now moves on to a full vote on the NC Senate floor. The bill has broad bi-partisan support, and if passed by the full Senate will be sent to the NC House for consideration during the short session. 
Benji Jones

The bill, as now proposed, has two parts. Part I is the NC PACES crowdfunding exemption, which includes minor technical changes designed to enable it to stay current with changes in federal laws recently proposed by the Securities and Exchange Commission (the SEC). Part II is unrelated to the NC PACES exemption, and is called the "Public Disclosure of Written Determinations made by the Department of Revenue". This part requires the DOR to publish redacted versions of written determinations letters sent in response to taxpayer requests for clarification of tax regulation and laws. This provides greater transparency and more information to taxpayers who may need similar clarifications. 

NC PACES offers small businesses a new path to raise capital – one that historically has not been available due to federal regulations that limit the use of general advertising and that prohibit ordinary investors from participating in private offerings.  Congress addressed this issue with the 2012 JOBS Act, making private offerings more available to all types of investors and to all types of companies. 

In my mind, the more options to access capital we give companies – within a balanced regulatory structure – the better.  However, there is no one-size-fits-all solution.  Different types of companies need to be able to access capital in different ways.  The small business, the local mom-and-pop shop – these are the companies that are being left behind by the federal JOBS Act, which is simply too complicated, too burdensome, too expensive and (right now) too novel to really fit well for the pizzeria that needs a new wood burning stove or the baker who wants to open or expand a storefront business. 

This is why we need NC PACES – to provide another option, a local path for our North Carolina small businesses to reach North Carolina investors. 

NC PACES permits local companies to use advertising to approach local investors without regard to wealth or income limitations.  While working in conjunction with federal exemptions, the bill otherwise eliminates the burden of compliance with expensive, time-consuming and confusing rules imposed by federal crowdfunding under Title III of the JOBS Act.  Under NC PACES our companies can raise up to $1 million every 12 months (or $2 million with audited or reviewed financials) from their friends, family, customers or clients that are North Carolina residents.  This is twice the amount permitted under federal rules.  North Carolina businesses can use a third-party website to help them conduct the offering, but, again unlike federal regulations, they are not required to do so.  Although they must file disclosure materials for review by the North Carolina Securities Division and will continue to be subject to liability under federal law and North Carolina statutes, no filings with the SEC are required.   

NC PACES offers a simpler, local solution for small businesses in need of capital.  A local company will be able to reach local investors to attempt to access the critical funding they need to succeed and to grow.  Only with NC PACES can they look to their neighbors for this support, without going to Wall Street, Silicon Valley or Washington, DC.

Close to 40 other states have adopted or are
considering similar
local crowdfunding legislation.

NC PACES is the chance for Main Street, NC
to claim its place on the investment crowdfunding map.

So, if you believe this is a good thing, contact your State Senator or Member of the House of Representatives today and encourage them to pass SB481 as soon as possible! 


The content contained on this blog does not provide, and should not be relied upon as, legal advice. It does not convey an offer to represent you or an attorney-client relationship. All uses of the content contained in this blog, other than for personal use, are prohibited.

Benji Jones is a partner at the Smith Anderson law firm with extensive experience in representing companies in exempt and non-exempt securities offerings.  Feel free to reach out directly to the author with questions or comments.


Sunday, June 12, 2016

Intrastate Crowdfunding is a Good Option

Attorney Anthony Zeoli of Chicago explains why intrastate crowdfunding is a good but sometimes overlooked option for startups and small businesses that are raising capital. He also compares recent Federal Title III crowdfunding rules with the intrastate exemptions such as the one in Illinois that he helped create.

Intrastate Crowdfunding: The Often Overlooked Option
By Anthony Zeoli
Anthony Zeoli
With the Federal Title III rules recently becoming effective, there is certainly a lot of excitement surrounding national level “retail” crowdfunding to non-accredited investors. That’s obviously great news for the industry, but it’s important to remember that the majority of the states currently have some form of “intrastate” retail crowdfunding laws already in effect; many of which offer significantly more favorable terms to issuers and investors than the federal rules. Moreover, the number of states passing these laws, and their use, continues to grow making them viable capital options for many companies.
State of the States and Title III: 
You may not know it but currently thirty (30) states have enacted Intrastate crowdfunding exemptions (or have enacted amendments to their existing blue sky laws to permit some type of Intrastate crowdfunding) and another eight (8) states are in various stages of enacting/considering such legislation.  Just like the highly anticipated Title III rules, each of the state laws allows for crowdfunding to non-accredited investors. That being said, the laws of each state are somewhat unique and a discussion of the nuances between the various state laws would literally take all day. Luckily for those that might be interested I maintain, what I believe to be, the definitive comparative matrix of current Intrastate crowdfunding laws.
Read the complete post on Anthony's blog.

It is time for North Carolina to pass the NC PACES Act S481 and enable this new way of financing startups and small businesses as 30 other states have already done.