Equity Crowdfunding: Myth and Reality

A Year-One Report Card on Title II of the JOBS Act

It’s been a little over a year now since Title II of the JOBS Act went into effect. The enactment of this legislation meant that for the first time since the Great Depression, start-up companies and small businesses could publicly advertise that they were seeking investment funds. With some of the SEC’s most cumbersome regulations relaxed, entrepreneurs could tweet about their fundraising efforts; they could promote them on Facebook or reach out through LinkedIn. Most importantly, entrepreneurs could connect with accredited investors on equity crowdfunding sites like Crowdfunder.com.

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Crowdfunding To Narrow The Gender Gap in Venture Capital

Read on Forbes

If you don’t know the story of women and venture capital, you should. Here’s what the data says…

Of the 6,793 companies funded by VCs between 2011 and 2013, only 2.7% of those companies had a woman at the helm as CEO – according to the recent Babson College study titled “Women Entrepreneurs and Bridging the Gap in Venture Capital” (PDF).

Back in 1999, at the time of a prior study, fewer than 5% of all ventures receiving investment capital had women on their management team. But between 2011 and 2013 that figure rose to over 15%. While that increase seems like a positive trend, it still means that over the last few years 85% of all businesses funded by VCs had no women at all on the management team.

Then there’s also the gender gap among the leadership of venture capital funds themselves. A 2011 survey by the National Venture Capital Association, showed that 89% of all VC investors were men, and only 11% were women.

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Startup Funding Online: The 5 Success Factors

In this article I’ve highlighted some of the most critical factors that drive successful startup fundraises online.

For a brief refresher, it was just over a year ago (September 2013) that we saw  Title II of the JOBS Act kick off and unleash a powerful new market for startup funding online, also referred to as equity crowdfunding.

This new capital market created under Title II is showing rapid growth, even while the opportunity to invest is currently limited to accredited investors and institutions.

Restrictions keeping everyday people (non-accredited investors) from participating may be lifted at some point under Title III of the JOBS Act, though regulators have stalled to release final rules.

That said, startups and investors are not waiting on Title III. The new startup funding market is off to the races. Technology and automation are rapidly transforming the way investments in startups and small businesses are done – driven primarily by a few leading equity crowdfunding platforms.

Today we are seeing everyday individual investors getting to invest alongside VCs and super-angels online, often in the same deals and at the same terms as some of the worlds most experienced early stage investors.

According to Kay Koplovitz and her article on the impact of the first year of equity crowdfunding, estimates for the startup funding commitments made online were estimated at over $217,000,000 in equity and debt. The sectors leading the way were the technology and real estate sectors.

Within these funding numbers are a variety of potential signals for what leads companies to succeed with raising startup funding online. Here are some of the potential signals and success factors that drive startup funding online.

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How To Pitch Investors And Raise Money

I have yet to meet a founder who knows how to pitch their company so that it immediately resonates with investors.

Your first job, in 10 seconds or less, is to give me the one golden nugget that makes me want to learn more. The most common mistake is talking about the product or technology or the company before I care. And I won’t care if you can’t convince me there’s an opportunity for me to make lots of money by investing.

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7 Crowdfunding Tips Proven To Raise Funding

As Seen on Forbes

This post on crowdfunding success tips answers the following questions for people or businesses thinking about using crowdfunding to raise funding:

“What are the common elements behind wildly successful crowdfunding campaigns?”

“Which platform is the best fit for my business or project?”

“What should I offer funders or investors?”

I cover these questions and more in the following 7 critical crowdfunding success tips below.

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Crowdfunding Entrepreneur Hacks

Adding Crowdfunding to your fundraising plan has the potential to add exponential value by unlocking capital that was otherwise unavailable to the everyday entrepreneur. Just ask Jeff Currie, CEO of Bitvore, who raised over $1 Million dollars using equity crowdfunding portals including Crowdfunder. Below are 5 entrepreneur hacks that successful entrepreneurs are using everyday on Crowdfunder in order to close investors and fund their company.

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The 3 Reasons Founders Fail at Fundraising

Is Fundraising an Uphill Battle For You?

If you’re an Entrepreneur, you know that fundraising can be hard. Even for the most experienced founders- fundraising eats up your time, has you chasing hard-to-get contacts, sending long emails to hundreds of investor leads, and can keep you on the road 24/7.

But there is a success formula that top founders use to fundraise successfully, and a better way. In short, effective and successful fundraising involves 3 steps, which include: finding the right investors to get in front of, crafting a great pitch, and having an actual process to close investment.

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