Introducing Crowdfunding: A Modern Way to Raise Capital

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Introducing Crowdfunding: A Modern Way to Raise Capital

Crowdfunding is a modern way of raising capital that has been rapidly gaining popularity in recent years. It is an innovative way of raising money from a large number of people, often through the internet, to fund a project or a business venture. In this article, we will discuss the various types of crowdfunding, the advantages and disadvantages of crowdfunding, and how to launch a successful crowdfunding campaign.

Types of Crowdfunding

There are several types of crowdfunding, each with its unique characteristics:

  1. Donation-Based Crowdfunding: In this type of crowdfunding, individuals and organizations donate money to a cause or a project without expecting anything in return. This type of crowdfunding is often used for charitable causes or social projects.
  2. Reward-Based Crowdfunding: In this type of crowdfunding, backers receive a reward for their contribution. Rewards can range from simple thank-you notes to products or services related to the project.
  3. Equity-Based Crowdfunding: In this type of crowdfunding, backers receive shares in the company in exchange for their contribution. This type of crowdfunding is often used by startups and small businesses.
  4. Debt-Based Crowdfunding: In this type of crowdfunding, backers receive a fixed return on their investment, usually in the form of interest. This type of crowdfunding is often used by businesses looking to raise funds for a specific project or expansion.

Advantages of Crowdfunding

Crowdfunding has several advantages, including:

  1. Access to Capital: Crowdfunding provides access to capital that may not be available through traditional funding sources, such as banks and venture capitalists.
  2. Market Validation: A successful crowdfunding campaign can validate a business idea or product and help attract additional funding from other sources.
  3. Customer Engagement: Crowdfunding provides an opportunity to engage with customers and build a community around a business or product.
  4. Brand Awareness: Crowdfunding campaigns can help raise brand awareness and attract new customers.

Disadvantages of Crowdfunding

While crowdfunding has many advantages, it also has some disadvantages, including:

  1. Limited Funding: Crowdfunding campaigns may not always reach their funding goals, which can limit the amount of capital raised.
  2. Time-Consuming: Launching a successful crowdfunding campaign can be time-consuming and require a significant amount of effort and resources.
  3. Loss of Equity: Equity-based crowdfunding can result in the loss of equity in a business.

Launching a Successful Crowdfunding Campaign

To launch a successful crowdfunding campaign, it is essential to have a solid plan and strategy in place. Here are some tips to help you launch a successful crowdfunding campaign:

  1. Set a Realistic Funding Goal: Set a realistic funding goal based on your business needs and the amount of funding required to achieve your objectives.
  2. Choose the Right Platform: Choose a crowdfunding platform that aligns with your business goals and target audience. Try Crowdfund Builder today!
  3. Develop a Compelling Story: Develop a compelling story that explains your business idea or product and how it will benefit backers.
  4. Offer Attractive Rewards: Offer rewards that are attractive to backers and align with the funding amount.
  5. Promote Your Campaign: Promote your crowdfunding campaign through social media, email marketing, and other marketing channels.

In conclusion, crowdfunding is a modern and innovative way of raising capital that can provide businesses with access to funding and help validate business ideas and products. Launching a successful crowdfunding campaign requires a solid plan and strategy, a compelling story, attractive rewards, and effective promotion. By following these tips, you can increase your chances of launching a successful crowdfunding campaign and achieving your funding goals.

Why Investment Firms Benefit from Crowdfund Builder

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Introduction to Crowdfund Builder

Crowdfund Builder is a platform that connects real estate investment firms with potential investors who are interested in pooling their resources together to fund promising property projects. It leverages the power of crowdfunding to create new opportunities for both investors and real estate firms alike. But what exactly is crowdfunding, and how has it revolutionized the real estate industry?

Crowdfunding and Real Estate

Crowdfunding is the practice of raising funds from a large number of individuals, typically through online platforms, to finance a particular project or venture. This approach has gained considerable traction in recent years and has been successfully applied to various industries, including real estate.

A Brief History of Crowdfunding in Real Estate

The concept of crowdfunding real estate projects first emerged in the early 2010s, following the success of platforms like Kickstarter and Indiegogo in the technology and creative sectors. Since then, numerous real estate crowdfunding platforms have been established, giving birth to a thriving new investment landscape.

Advantages of Crowdfund Builder for Real Estate Investment Firms

Access to Capital

Diversified Funding Sources

Crowdfund Builder allows real estate investment firms to tap into a vast pool of potential investors, which enables them to diversify their funding sources. This helps reduce reliance on traditional financing methods, such as bank loans, and can lead to more favorable funding terms.

Lowered Barriers to Entry

Engaging a Wider Range of Investors

Crowdfunding platforms like Crowdfund Builder make it easier for individuals with varying investment capacities to participate in real estate projects. This not only increases the number of potential investors but also democratizes the investment process, allowing more people to enjoy the benefits of real estate investing.

Enhanced Transparency and Trust

Real-Time Data and Updates

Investors using Crowdfund Builder can easily access project information, updates, and key performance indicators. This heightened level of transparency fosters trust between investors and real estate firms, ultimately benefiting the projects themselves.

Streamlined Project Management

Simplified Investor Communication

Managing communication with numerous investors can be a daunting task for real estate investment firms. Crowdfund Builder simplifies this process by providing a centralized platform for sharing updates, answering questions, and addressing concerns.

Real-Life Examples of Successful Crowdfunded Real Estate Projects

**Example 1:

The Commercial Building Revival**

A once-neglected commercial building in a bustling city was transformed into a vibrant mixed-use space, thanks to the power of crowdfunding. Through Crowdfund Builder, the real estate investment firm behind the project was able to raise the necessary funds from a wide range of investors. As a result, the building now houses offices, retail spaces, and restaurants, providing a revitalized hub for the community.

Example 2: The Affordable Housing Initiative

Crowdfund Builder played a crucial role in the development of an affordable housing project in a rapidly growing urban area. The real estate firm spearheading the project utilized the platform to secure funding from a diverse group of investors who shared a common interest in addressing the city’s housing crisis. The completed development now offers reasonably priced homes to hundreds of families, demonstrating the positive impact of crowdfunding on real estate ventures.

Conclusion

Real estate investment firms can significantly benefit from using Crowdfund Builder for their projects. The platform not only provides access to a broader range of investors and diversified funding sources but also lowers barriers to entry and enhances transparency and trust. With streamlined project management and numerous success stories, it’s no wonder that Crowdfund Builder is becoming an essential tool for real estate investment firms.

FAQs

1. How does Crowdfund Builder help real estate investment firms raise funds?

Crowdfund Builder connects real estate investment firms with a large pool of potential investors, who can contribute funds to projects through the platform. This enables firms to diversify their funding sources and reduce reliance on traditional financing methods.

2. Can small investors participate in real estate projects through Crowdfund Builder?

Yes, Crowdfund Builder allows individuals with varying investment capacities to participate in real estate projects. This makes it easier for more people to enjoy the benefits of real estate investing and democratizes the investment process.

3. What types of real estate projects can be funded through Crowdfund Builder?

Crowdfund Builder supports a wide range of real estate projects, including residential, commercial, and mixed-use developments. The platform can be used to fund new construction projects, property renovations, and even real estate-backed loans.

4. How does Crowdfund Builder ensure transparency and trust between investors and real estate investment firms?

Crowdfund Builder provides a centralized platform where investors can access project information, updates, and key performance indicators. This heightened level of transparency fosters trust between investors and real estate firms, ultimately benefiting the projects themselves.

5. Can Crowdfund Builder help real estate investment firms with project management?

Yes, Crowdfund Builder streamlines project management by simplifying investor communication. The platform offers a centralized location for sharing updates, answering questions, and addressing concerns, making it easier for real estate investment firms to manage their relationships with numerous investors.

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The Advantages of Investing in Commercial Real Estate through Crowdfunding with Crowdfund Builder

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Investing in real estate has long been a popular way to build wealth and diversify portfolios. However, traditional real estate investments require significant capital and are often inaccessible to average investors. This is where crowdfunding platforms like Crowdfund Builder come in. They allow individual investors to pool their resources and invest in commercial real estate projects that were previously out of reach.

At Crowdfund Builder, we’re committed to providing our investors with the opportunity to participate in high-quality real estate investments that generate strong returns. In this article, we’ll explore the benefits of investing in commercial real estate through crowdfunding and how you can get started.

The Advantages of Crowdfunding for Real Estate Investments

Diversification

One of the biggest advantages of investing in commercial real estate through crowdfunding is the ability to diversify your portfolio. With Crowdfund Builder, you can invest in a wide range of commercial real estate projects across various property types and geographic regions. This diversification helps to reduce risk and ensure that your portfolio is well-balanced.

Access to High-Quality Real Estate Investments

Another benefit of crowdfunding is that it provides access to high-quality real estate investments that were previously only available to institutional investors. At Crowdfund Builder, we thoroughly vet all of our investment opportunities to ensure that they meet our strict underwriting standards. Our team of experts evaluates each investment opportunity based on factors like location, property type, tenant creditworthiness, and more.

Passive Income and Potential for High Returns

Investing in commercial real estate through crowdfunding can also provide passive income and the potential for high returns. Most of our investment opportunities are structured as equity investments, which means that investors receive a share of the profits generated by the property. This can provide a steady stream of passive income, and if the property performs well, investors can also see significant capital gains.

How to Get Started with Crowdfund Builder

Getting started with Crowdfund Builder is easy. Here are the steps you’ll need to follow:

  1. Create an account on the Crowdfund Builder platform.
  2. Browse our list of investment opportunities and choose one that meets your investment goals and risk tolerance.
  3. Review the investment details and documentation, including the private placement memorandum (PPM).
  4. Make your investment online and sign the subscription documents.
  5. Sit back and watch your investment grow.

Conclusion

Investing in commercial real estate through crowdfunding platforms like Crowdfund Builder can be an excellent way to diversify your portfolio and gain access to high-quality real estate investments that were previously out of reach. With our thorough underwriting process and commitment to investor success, we’re confident that you’ll find a Crowdfund Builder investment opportunity that meets your investment goals. Get started today and take the first step towards building your wealth through real estate investing.

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Why Crowdfund Builder is the Go-To Software Service for Crowdfunded Real Estate Investment Firms

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At Crowdfund Builder, we understand the unique challenges that real estate investment firms face in today’s ever-changing digital landscape. With the rise of crowdfunding, it’s more important than ever for firms to have access to the right tools and software to effectively manage their investments and meet the needs of their investors.

That’s where Crowdfund Builder comes in. Our software service is designed specifically for crowdfunded real estate investment firms, offering a wide range of features and tools to help these firms stay competitive and successful in today’s market. In this article, we’ll explore some of the key features that make Crowdfund Builder the go-to software service for crowdfunded real estate investment firms.

Powerful Fund Management Tools

One of the most important features of Crowdfund Builder is its powerful fund management tools. Our software is designed to help firms manage all aspects of their funds, from investor relations to fund performance reporting. With real-time data and analytics, firms can quickly and easily make informed decisions about their investments and adjust their strategies as needed.

In addition, our software offers robust investor relations tools that allow firms to communicate with their investors, share updates on fund performance, and provide detailed reports on their investments. With these tools, firms can build stronger relationships with their investors and keep them informed and engaged throughout the investment process.

Comprehensive Deal Management

Another key feature of Crowdfund Builder is its comprehensive deal management tools. Our software allows firms to easily manage all aspects of their deals, from sourcing and evaluating potential investments to closing deals and managing post-closing activities. With our deal management tools, firms can streamline their deal processes, reduce errors and delays, and improve overall efficiency.

In addition, our software offers advanced analytics and reporting tools that allow firms to quickly and easily evaluate the performance of their deals and make data-driven decisions about future investments. With these tools, firms can identify trends, assess risks, and optimize their investment strategies for maximum returns.

Robust Investor Management

At Crowdfund Builder, we understand that managing investors can be a complex and challenging process. That’s why we offer robust investor management tools that make it easy for firms to manage their investors, from onboarding to ongoing communications and reporting.

Our software allows firms to easily track investor information, such as investment history and preferences, and provides real-time reporting and analytics on investor activity. With our investor management tools, firms can build stronger relationships with their investors and provide a high level of transparency and communication throughout the investment process.

Customizable Platform

Finally, one of the key benefits of Crowdfund Builder is its customizable platform. Our software can be tailored to meet the specific needs of each individual firm, allowing for greater flexibility and scalability. Whether firms are just starting out or are well-established in the industry, our software can be customized to fit their unique needs and goals.

In addition, our software is designed to integrate seamlessly with other tools and services, such as accounting software, marketing platforms, and more. This integration allows firms to streamline their operations, reduce errors and redundancies, and improve overall efficiency and productivity.

Conclusion

Overall, Crowdfund Builder is the go-to software service for crowdfunded real estate investment firms. With its powerful fund management tools, comprehensive deal management, robust investor management, and customizable platform, our software offers everything firms need to stay competitive and successful in today’s market.

If you’re interested in learning more about how Crowdfund Builder can help your real estate investment firm, please contact us today to schedule a demo. We look forward to helping you take your firm to the next level.

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How Crowdfund Builder Stands Out from All the Rest

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Introduction

Crowdfunding has emerged as a powerful tool for entrepreneurs and startups to raise capital and bring their ideas to life. Crowdfunding platforms have been growing in popularity and number, each offering its unique set of features and benefits. One such platform that stands out from all the rest is Crowdfund Builder. In this article, we will explore the features and benefits of Crowdfund Builder and why it is the best choice for established firms and startups looking to crowdfund their projects.

What is Crowdfund Builder?

Crowdfund Builder is a comprehensive crowdfunding platform that helps entrepreneurs and startups raise capital for their projects. The platform offers a range of features and benefits that make it stand out from all the rest. Crowdfund Builder provides a simple and user-friendly interface, customizable campaign pages, advanced marketing tools, secure document system, fast and responsive customer support, and competitive pricing.

Simple and User-friendly Interface

Crowdfund Builder’s interface is simple and user-friendly, making it easy for entrepreneurs and startups to create and launch their campaigns. The platform’s intuitive design allows users to navigate easily and create their campaigns quickly. The user-friendly interface saves time and effort, enabling users to focus on creating and promoting their campaigns, tracking investors and managing documentation.

Advanced Marketing Tools

Crowdfund Builder offers advanced marketing tools that enable entrepreneurs and startups to promote their campaigns effectively. The platform offers features such as social media integration, email marketing, and analytics that help users reach their target audience and track their campaign’s performance. Advanced marketing tools can help entrepreneurs and startups to maximize their reach and increase their chances of success.

Secure Document Gateway

Crowdfund Builder provides a secure document gateway that ensures the safety and privacy of backers’ financial information. The platform uses industry-standard encryption and security measures to protect the information of backers. A secure document gateway can help increase backers’ confidence in the campaign and encourage them to contribute to it.

Fast and Responsive Customer Support

Crowdfund Builder offers fast and responsive customer support that ensures that users receive the help they need quickly. The platform provides various channels of customer support, including email, phone, and chat, ensuring that users can get in touch with the support team in the way that is most convenient for them. Fast and responsive customer support can help users resolve any issues quickly and ensure that their campaigns run smoothly.

Case Studies and Success Stories

Crowdfund Builder has helped numerous entrepreneurs and startups raise capital and bring their ideas to life. The platform has a track record of successful crowdfunding campaigns and has helped many businesses achieve their funding goals. Crowdfund Builder provides case studies and success stories that showcase the platform’s effectiveness and the success of its campaigns. Case studies and success stories can help entrepreneurs and startups understand the platform’s capabilities and the best practices for running a successful crowdfunding campaign.

Conclusion

In conclusion, Crowdfund Builder stands out from all the rest due to its user-friendly interface, customizable campaign pages, advanced marketing tools, secure document gateway, fast and responsive customer support, competitive pricing, and successful track record. The platform offers entrepreneurs and startups an all-in-one solution for running a successful crowdfunding campaign. If you are an entrepreneur or a startup looking to raise capital and bring your ideas to life, Crowdfund Builder is the best choice for you.

FAQs

  1. How does Crowdfund Builder ensure the safety of backers’ financial information?
  • Crowdfund Builder uses industry-standard encryption and security measures to protect the payment information of backers.
  1. Can I customize my campaign page on Crowdfund Builder?
  • Yes, Crowdfund Builder offers customizable campaign pages that enable you to create a unique and engaging campaign that reflects your brand and message.
  1. What marketing tools does Crowdfund Builder offer?
  • Crowdfund Builder offers advanced marketing tools such as social media integration, email marketing, and analytics that help you promote your campaign effectively.
  1. What pricing plans does Crowdfund Builder offer?
  • Crowdfund Builder offers three pricing plans – Starter, Professional, and Premium, catering to the needs of entrepreneurs and startups of all sizes.
  1. How does Crowdfund Builder provide customer support?
  • Crowdfund Builder offers fast and responsive customer support through email, phone, and chat, ensuring that you receive the help you need quickly.

 

Click here to get started today!

 

Real Estate Investment Management Services: What You Need to Know

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Investing in real estate can be a lucrative venture, but managing your investment can be a daunting task. That’s where real estate investment management services come in. In this article, we will discuss the ins and outs of real estate investment management services, and how they can help you achieve your investment goals.

What Are Real Estate Investment Management Services?

Real estate investment management services are professional services that help real estate investors manage their assets. These services can include everything from property management to financial reporting, investor communication, and risk management. The goal of real estate investment management services is to maximize the return on investment for real estate investors, while minimizing risk.

Why Do You Need Real Estate Investment Management Services?

Managing a real estate investment can be a complex and time-consuming process. Real estate investment management services can help you navigate the challenges of real estate investment, and ensure that your investment is performing at its best. With real estate investment management services, you can focus on your core competencies, while leaving the management of your real estate assets to the experts.

What Services Do Real Estate Investment Management Companies Offer?

Real estate investment management companies offer a wide range of services to help real estate investors manage their assets. Some of the most common services include:

  • Property Management: This includes everything from tenant screening to maintenance and repair, lease management, and rent collection.
  • Financial Reporting: Real estate investment management companies can provide detailed financial reports that track the performance of your investment over time.
  • Investor Communication: Real estate investment management companies can help you communicate with your investors, providing regular updates and answering any questions they may have.
  • Risk Management: Real estate investment management companies can help you manage risk by identifying potential risks and developing strategies to mitigate them.

How to Choose the Right Real Estate Investment Management Company

Choosing the right real estate investment management company is crucial to the success of your investment. When selecting a real estate investment management company, consider the following factors:

  • Experience: Look for a company with a proven track record of success in managing real estate investments.
  • Reputation: Do your research and read reviews from other investors who have worked with the company.
  • Services: Make sure the company offers the services you need to manage your investment effectively.
  • Fees: Understand the fees associated with the company’s services and make sure they are reasonable.
  • Communication: Choose a company that communicates regularly and effectively with its clients.

Conclusion

Real estate investment management services can be a valuable asset to real estate investors, helping them manage their assets and achieve their investment goals. When choosing a real estate investment management company, it’s important to consider factors such as experience, reputation, services, fees, and communication. By selecting the right real estate investment management company, you can ensure that your investment is managed effectively and efficiently. Click here to get started with CrowdfundBuilder today!

How to Invest in Real Estate: 5 Ways to Get Started

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Investing in real estate has long been a popular strategy for building wealth and creating passive income. While there are many ways to invest in real estate, it’s important to understand the various options available and their associated risks and benefits.

At our company, we specialize in helping investors make informed decisions when it comes to real estate investing. In this article, we’ll explore five ways to invest in real estate and provide insights into how you can maximize your returns.

  1. Direct Ownership Direct ownership of real estate involves purchasing a physical property and becoming a landlord. This can be a lucrative strategy for those who are willing to put in the time and effort required to manage the property.

One of the main advantages of direct ownership is that you have complete control over the property, from selecting tenants to setting rental rates. However, this strategy also comes with significant risks, including the potential for tenant issues, property damage, and vacancy.

  1. Real Estate Investment Trusts (REITs) A real estate investment trust (REIT) is a company that owns and operates income-generating real estate assets, such as apartment buildings, office complexes, and shopping centers. REITs allow investors to own a share of these assets without the hassle of managing them directly.

One of the main advantages of REITs is that they offer diversification, which can help reduce risk. Additionally, many REITs offer attractive dividend yields, making them a popular choice for income-seeking investors.

  1. Real Estate Crowdfunding Real estate crowdfunding platforms allow investors to pool their money together to purchase properties. This strategy provides access to real estate investments with lower minimum investment requirements than traditional direct ownership.

Crowdfunding platforms typically provide detailed information about the properties available for investment, including financial projections and expected returns. However, it’s important to thoroughly research the platform and the properties before investing, as there is still risk involved.

  1. Real Estate Mutual Funds Real estate mutual funds invest in a variety of real estate assets, including REITs, direct ownership properties, and mortgage-backed securities. These funds offer investors a diversified portfolio of real estate investments with professional management.

One of the main advantages of real estate mutual funds is that they offer liquidity, allowing investors to easily buy and sell shares. However, these funds also come with management fees and other expenses that can impact returns.

  1. Real Estate ETFs Real estate exchange-traded funds (ETFs) are similar to real estate mutual funds but are traded like stocks on an exchange. ETFs offer investors a diversified portfolio of real estate investments with lower expense ratios than mutual funds.

ETFs also offer liquidity, making them an attractive option for investors who want to buy and sell quickly. However, like mutual funds, ETFs come with management fees and other expenses.

Conclusion

Investing in real estate can be a profitable strategy for building wealth and generating passive income. However, it’s important to understand the various options available and their associated risks and benefits before investing.

Whether you choose to invest directly in a property, through a REIT, crowdfunding platform, mutual fund, or ETF, it’s important to thoroughly research your options and make informed decisions. By doing so, you can maximize your returns and achieve your investment goals.

Real Estate Crowdfunding for Retirement

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Real estate is an important part of any well-diversified portfolio. Not only is it a good way to protect yourself against volatility in the stock market, it can also provide retirement income.

One of the best things about investing in real estate is that you have so many different ways to do it. House-flipping is one option if you want to pocket big profits all at once. Becoming a landlord is another way to go if you’d rather be on the receiving end of monthly rental payments.

Real estate crowdfunding, is an alternative that’s gaining popularity. It’s estimated that the real estate crowdfunding industry topped $2.5 billion in 2015 and is still growing. If you are wondering if this is a good time get in on the game and start fortifying your retirement goals, here’s a overview of real estate crowdfunding.

Real estate becomes more accessible. Private real estate deals have historically been reserved for high net-worth investors who possess the right connections to gain access. Real estate crowdfunding opens up many of these opportunities to the average investor.

This is a great opportunity for investors who are struggling to find an entry point into the real estate market. Crowdfunding enables investors of all ages, risk profiles and wealth levels to acquire real estate for the first time. With as little as a $5,000 investment or in some cases even less, investors can buy a stake in a property. From residential projects to shopping malls to office buildings, there are numerous options.

Crowdfunding is removing barriers to investing in real estate that previously shut a large number of investors out of the game. The SEC’s approval of Title III of the JOBs Act in October 2015 widens the possibilities even further by allow non-accredited investors to take part in crowdfunded real estate deals.

The opportunity for diversification expands. With direct ownership, your options are more limited when you don’t have the ability to purchase multiple properties. Real estate crowdfunding eliminates that obstacle.

Instead of being locked in to a single property type, investors have more flexibility where they put their money. They also have a choice between investing in equity in return for a share in a particular property, or debt investments, which are tied to the property’s mortgage.

If you buy a property to flip or rent, you’ll most likely feel more comfortable investing in your own backyard. When you are investing through crowdfunding, you can invest throughout the country and more easily diversify across property types, investment types and geographies.

It’s a less stressful way to invest in real estate. Owning a rental property or tackling a flip project is great for investors who prefer an active role but it’s not necessarily a good fit for someone who wants to relax in retirement.

With house-flipping, investors have to factor in all the costs involved, from buying the property to physical construction, as well as the interest paid to lenders if you’re financing the project. Besides that, there are the tax implications that go along with realizing short-term financial gains. Bottom line, it takes a long time to master the art of rehabbing. Investors have to be able to anticipate problems and have a counterattack ready.

Owning a rental house is no less of a challenge. There are the difficulties that go along with finding tenants and making sure you’re adhering to the legal guidelines for renting. Then there’s the day-to-day demands associated with managing a property, which can be time-consuming.

The passive nature of real estate crowdfunding as being more suited to retirees who have less of an interest in direct involvement.

Real Estate Investing is a Great Way to add Retirement Income
For some investors, real estate is a viable option for generating money and diversifying your investments.

Understand the risks. While real estate crowdfunding may be more preferable to direct ownership for some retirees, there are some potential drawbacks.

Liquidity is one issue that may be of more concern to retirees. Depending on how a deal is structured, you may be looking at a holding period of anywhere from 18 months to seven years before you’re able to recoup your investment.

In that scenario, owning a rental property or flipping homes could begin to look more attractive because there’s a more immediate payoff. Factoring in the holding period is important if you have a pressing need for sustainable cash flow outside your existing investments.

With crowdfunding deals that are structured as debt or loans, investors receive returns for loaning the owner/ developer money.

SEC Targets Reg A+ Marijuana Company, Med-X, in Administrative Proceeding.

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Reprinted from Crowdfund Beat, By Samuel S. Guzik, CrowdFundBeat special guest editor, Guzik & Associate

The Regulation A+ industry was buzzing this week – not with excitement, but with a healthy dose of trepidation. One of the first, high (no pun intended) profile Regulation A+ offerings, launched in November 2015, after a seemingly successful “Testing the Waters” campaign, was for a company called Med-X, a startup formed to participate in the newly burgeoning marijuana industry – the so called “Green Rush.”

But this month’s headline for Med-X was a bit more sanguine, enough to counteract even the most potent dosage of THC: “REGULATION A EXEMPTION OF MED-X, INC. TEMPORARILY SUSPENDED.” The story that followed was not the kind of publicity any company is looking for – especially when it is in the throes of raising money under Reg A+. Actually, it was not a story. Rather, it was an Administrative Order issued by the SEC on September 16, 2016, temporarily suspending the exemption of Med-X under Regulation A+.

Why? Well, it seems that this company failed to notice, or at least heed, the requirement that Reg A+ issuers file periodic informational reports as a condition of maintaining their status as Reg A+ issues. The basic requirement calls for a company, at the least, to file a semi-annual and annual report with the SEC following the “qualification” of the offering. Seems that Med-X failed to file its annual report, which would include audited financial statements, when due back in the Spring of 2016.

Some have speculated that the SEC was targeting a disfavored industry – Rule 506. I doubt it. The SEC has approved the registered sale of other companies in this industry long before Regulation A+ was adopted.

Others have speculated that this action reflects an uneven hand towards Regulation A+ issuers. After all, this type of swift action is rare for fully reporting companies which are delinquent in their filings. One more time: I think not.

The Staff at the SEC has been remarkably supportive of the rollout of Regulation A+, as measured anecdotally in terms of the efficiency in which it has been processing the review of Regulation A+ offerings.

Rather, I think back to one of the more notable sound bytes I coined in a Webinar back in April 2015: “Regulation A+ is not your daughter’s Kickstarter campaign.” Raising capital from outside investors is serious, heavily regulated business. And as indicated by some of the early Regulation A+ participants, the level of sophistication of the management of some of these issuers has hardly met the bar required to file and prosecute a Regulation A+ offering.

Yes, Regulation A+ is a little more complex than the pipedream: filling out a form, waiting for SEC approval, and then crowdfunding your way to $50 million. Apart from detailed disclosure rules, including audited financial statements, and the always difficult task of raising capital – especially for early stage companies – there is an ongoing SEC reporting requirement. Yes, the requirement is lighter than a fully reporting public company, to be sure, but enough to quickly overload an early stage company, with limited financial and human resources.

So if nothing else, this is one SEC enforcement action can be expected to inject a dose of reality into the Regulation A+ capital raising process. As our President might say, “A Teachable Moment.”

Samuel Guzik

Samuel S. Guzik has more than 35 years of experience as a corporate and securities attorney and business advisor in private practice in New York and Los Angeles, including as an associate at Willkie Farr and Gallagher, a major New York based international law firm, a partner at the law firm of Ervin, Cohen and Jessup, in Los Angeles, and in the firm he founded in 1993, Guzik & Associates.

Mr. Guzik has represented public and privately held companies and entrepreneurs on a broad range of business and financing transactions, both public and private. Mr. Guzik has also successfully represented clients in federal securities litigation and SEC enforcement proceedings. Guzik has represented businesses in a diverse range of industries, including digital media, apparel, health care and numerous high technology based businesses.

Guzik is a recognized authority and thought leader on matters relating to the JOBS Act of 2012 and the ongoing SEC rulemaking, including Regulation D Rule 506 private placements, Regulation A+, and investment crowdfunding. He has been consulted by Congressional members, state legislators and the U.S. Small Business Administration Office of Advocacy on matters relating to the JOBS Act and state securities matters.

Guzik & Associates
1875 Century Park East, Suite 700
Los Angeles, CA 90067
Telephone: 310-914-8600
www.guziklaw.com
www.corporatesecuritieslawyerblog.com
@SamuelGuzik1

Venture capital for everyone

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Venture capital have made fortunes for a new investors. Wish you had put resources into Apple when it was still in its carport days?

As crowdfunding bounced in ubiquity, another government administer now permits supposed unaccredited investors to set up as meager as $100 for a stake in new companies and little organizations. The SEC’s tenet, called Regulation Crowdfunding, will help organizations raise capital while additionally let ordinary individuals — and not only the affluent — in on the activity.

Beforehand, these sorts of speculations were limited to authorize financial specialists, those with a total assets of $1 million, or who met other resource criteria. The principle change, which produced results in May, is a key part of the JOBS Act of 2012, which was intended to open the capital pipeline after access was extremely tightened in the wake of the credit emergency.

Be that as it may, Venture capital comes at a cost.

Venture capital start-up investing is the most dangerous of the least secure type of crowdfunding. However for some people, the open door for a value stake in a start-up or little business might be powerful. From one viewpoint, crowdsourcing is only that: giving the opportunity to non accredited investors to get into the game and potentially make big financial gains.

Variety of Venture capital decisions

Try not to put every one of your advantages in one investment. Speculators ought to confine their introduction to a little chunks of their portfolio. Financial advisors often recommend making 15 to 20 speculations of up to $500 each. Having numerous speculations that do pay off can possibly make solid returns.

These are high-risk, high yield ventures, and thusly they ought to make up a small a percentage of an individual investor’s portfolio. Financial advisors often recommend that investors limit their high risk investments in venture capital opportunities to no more than 3 percent to 5 percent of their total portfolio.

It’s the same than what you would do in a conventional stock portfolio, take after the widespread counsel: Diversification is the way to achievement.

Crowdfunding is the greatest change to hit start-up investing in years, maybe ever

The guidelines do give some extra securities. For instance, there are strict due diligence requirements for the business and securities offering and points of confinement on the sums that can be contributed.

For instance, investors who make more than $100,000 a year by and large can contribute up to 10 percent of their salary, while a financial investors with pay of under $100,000, can contribute up to 5 percent over a 12-month time frame. There’s likewise a top of $100,000 on the sum that people can put resources into a year.

Organizations attempting to raise reserves must document printed material on their financials, projections and foundation and register with a platform. These platforms are required to check that the start-up’s disclosures are honest and exact. The platforms additionally give a stage to individual investors to meet up to inspect the points of interest to choose whether they need to contribute.

Small businesses and start-ups are required to file 2 updates per year (rather than the yearly 10-K or 10-Q reports that are typically filed) and post them on the investor area of their websites.