Expert Faq: What Should Investors Know About Equity Crowdfunding?

Why Equity Crowdfunding Is Good News For Women

Now, startups and small businesses are able to solicit investment and advertise publicly as long as they register with the SEC and disclose details of their solicitation. For example, your local florist might seek funding through Facebook or Twitter. However, unless you are an accredited investor, somone who has over $1 million or has been making more than $200,000 for the past three years, you will not be able to invest. So what does this mean for investors and small businesses? Equity crowdfunding will eventually create a vast new marketplace.


The businesses that are most likely to benefit from equity-crowdfunding are those that find it challenging to locate capital through other means. For instance, entrepreneurs located in rural areas, first-time entrepreneurs that have yet to establish the right connections, or businesses pushing a value proposition that is somewhat ambiguous or unclear. Businesses that are aimed at providing products or services to individual consumers also have a leg-up here, because they can benefit from directly engaging with those customers early on. However, you will also want to keep in mind that angels and VCs are often able to provide other support, since they often have business experience and can help guide you.

Equity Crowdfunding Platforms: How Many Will There Be? (Expert FAQ)

But its interesting to note that angel investment entry points can be as low as $5,000-10,000. As for the time and network issues, those are significant problems. In fact, those problems inspired the launch of my company, Launch Angels. Were leveraging the power of equity crowdfunding to create personalized venture funds and a very transparent experience. Recognizing that equity portals often dont perform thorough due diligence on deals they list and that good research requires on average at least 40 hours, we decided to assist would-be angels. We take on the research and paperwork burden for our investors, plus spread Fund investment dollars over more deals by pooling individuals money. We also afford investors themed choices.

Indiegogo CEO Slava Rubin Talks Equity Crowdfunding (Video)

Slava has spoken about Indiegogos interest in popular or retail crowdfunding before in the past. This has to do with Title III of the JOBS Act where companies may raise up to $1 Million in any given year by soliciting small or un-accredited investors. Note these equity crowdfunding rounds may occur in concert with a private placement which may be unlimited in the size of the raise. Slava states he wants to disrupt the gatekeeper who decided who gets money. Indiegogo is really excited about equity crowdfunding. Indiegogo funded campaigns in 76 countries for #GivingTuesday. Slava uses this as an example how they can scale raising funds by applying technology for crowdfunding. While they have not made an official announcement, it is becoming more apparent that Indiegogo is on a path to enter into retail crowdfunding once the regulations are finalized at some point in 2014. _________________________


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