Monday, May 11, 2015

Intrastate Crowdfunding Exemptions on the Rise Across the Nation

Anthony Zeoli, who is leading the effort to get an intrastate investment crowdfunding exemption passed in Illinois, provides us with the latest information on intrastate crowdfunding exemptions.

The first post shows the current status of the intrastate exemption process across the nation. As of May 8th, 19 states have an exemption in place, and 21 states (including North Carolina) are in progress on enacting one. Of note is that Florida has recently enacted an exemption after their Governor initially rejected one last year. So most of the states in the southeast region now have an exemption in place.

Another post by Anthony shows comparisons of the various state exemptions.

And this one has links to all the various state exemptions.

Graphic courtesy of Anthony Zeoli

Another  excellent post is a very good infographic showing where intrastate crowdfunding fits on the financing ladder used by startups as they grow. Intrastate crowdfunding is a very good and cost effective match for seed stage and early stage companies.

Graphic Courtesy of Anthony Zeoli

The NC PACES Act will also be a big help with debt financing for small businesses all across the state. We are on the right track with S481, and as the Governor and Steve Case both reminded us last week during the Rise of the Rest Tour, it is time to get this enacted.

You can help by clicking on the links below and sending an email to your state representative and state senator asking them to support S481, the NC PACES Act Investment Crowdfunding Exemption.

Thanks for your support.

Thursday, May 7, 2015

2015 - The Year of Investment Crowdfunding

Joan Siefert Rose, President of the Council for Entrepreneurial Development (CED) in Durham, reports from the Angel Capital Association Summit meeting in San Diego on the growing importance of investment crowdfunding as a funding source for startups and small businesses nationwide.
Joan Siefert Rose

"I’m just back from the Angel Capital Association (ACA) Summit in San Diego, where much of the talk among the 600-plus attendees was about how crowdfunding is changing the relationship between entrepreneurs and traditional equity investors. The general consensus is that crowdfunding options will continue to expand at a rapid rate, especially as changing federal regulations open up the playing field to new investors.

Whether this is a good thing depends on whom you ask—many see crowdfunding as an essential way to democratize participation of funding early-stage companies and accelerate the pace of startups; others worry that new investors are unsophisticated and not prepared to lose money in high-risk ventures. But everyone agrees that equity crowdfunding is here to stay, and it’s up to entrepreneurs and angels to educate themselves. 
That’s where CED comes in, as we are committed to engaging with and helping to educate the growing pool of investors who are able to support the entrepreneurial economy."
Joan's post includes some interesting updates on the growth of the crowdfunding industry.
"In fact, of all the types of online platforms that allow individuals to direct dollars to private companies, equity crowdfunding is—for now—a relatively small, but growing player. Numbers are hard to come by, but the ACA estimates that roughly $7 billion in transactions took place on North American crowdfunding platforms in 2014. Equity crowdfunding, in which investors get an ownership stake in the company, accounted for about $300 million of that total. By contrast, platforms that allow individuals to lend directly to each other, like LendingClub and Prosper, are currently the heavyweight champions, with $5 billion worth of activity. Donation- and rewards-based sites like Kickstarter and Indiegogo, also brought in more dollars for startups than equity platforms."

You can read Joan's full report here on ExitEvent.