It’s approaching a year since Regulation Crowdfunding (Reg CF) went live. So, how’s it going?
Well, there’s a new white paper on Regulation Crowdfunding that is giving us some insights. At the end of February, the SEC published a white paper on the topic, offering up a few key findings, despite a small sample size and a small window of data collection (May 16, 2016 through December 31, 2016). Still, the findings are worth checking out. Ze’-ev Eiger captured some notable highlights in his post on the JDSupra Business Advisor site:
- 163 offerings were filed (by 156 issuers) that totaled $18 million, with an average raise amount of $110,000. All of these issuers also “accepted oversubscriptions” for higher amounts, bringing the overall (aspirational) raise total to $101 million.
- Of the above offerings, 28 reported success on Form C-U by December 31, 2016.
- Noteworthy issuer details: “The median issuer had under $50,000 in assets, under $5,000 in cash, $10,000 in debt, no revenues, and three employees. Approximately 40% of the issuers reported positive revenue and approximately 9% of the issuers reported a net profit in the most recent fiscal year.”
- Noteworthy geography details: “The most popular state of incorporation for issuers was Delaware and the most popular principal place of business for issuers was California.”
- The two most popular securities were: “simple agreements for future equity” and debt.
A Regulation Crowdfunding campaign sounds “easy”. But it’s not.
The white paper helps to bring home an important point: A Reg CF campaign may sound simple in theory or on paper, but it is not a “fly by the seat of your pants” undertaking, nor is it a magic bullet. If you keep reading this sentiment in various articles and blog posts, it’s because it bears repeating.
Because there are many not-so-insignificant steps in the preparation phase of a crowdfunding campaign it can be hard to know where to start…and how to draw up a checklist to make sure you don’t miss any steps. And then there’s this: a crowdfunding campaign—whether you are interested in rewards or equity—requires marketing…and usually that means a marketing budget. But if you’re a new venture, or still pre-revenue, a marketing budget can be challenging to produce.
Our “mini” course aims to help Reg CF issuers
At Crack the Crowd, we operate a marketing agency, but we also champion entrepreneurs who are attempting a “dent in the universe“. That’s why we created a prototype for a “mini” online course that helps Regulation Crowdfunding issuers navigate all the steps involved in preparing and launching a crowdfunding campaign. (Not everyone can hire a marketing agency—we get that.) Under this particular regulation, there are a lot of compliance issues, and we baked that into the prototype we created.
We’re still in the process of completing the beta, but that doesn’t mean you can’t sign-up to be notified when it’s live.
For a limited time we’ll be offering the beta for free (in exchange for feedback, of course). If you’re interested, click on the button below.