The Brilliance (and Madness) of Crowd Funding

Forbes, in their June 25th issue put out some guidlines for investors that might be ooking to invest in companies listed on kickstarter.com, and we thought it would be useful to turn the equation around, and address the information that companies need to provide in order to attract crowdfunding investors using this source.

1. Generally, investments are limited to $100,000. If you’re asking for more than that, you have to provide audited financial statements.

2. You should, according to the SEC (who hasn’t issued any final rules yet), take money from only ‘accredited’ investors, those with net worth of between $250k and 1 million. In addition, the investment should be limited to 10% of their total assets.

3. You should have a business plan done; we have free templates on our website, www.theasoe.com. For a $100 review fee, we’ll provide a review and suggested areas of improvement.

4. Financial statements: should be audited by a CPA; frankly, we can’t imagine someone investing anything in a company without audited financials, but that might just be us. You should be prepared to provide personal financial statements and tax returns for 3 years, too.

5. Licenses and registrations: Legitimate businesses, even online ones, should be licensed by the city in which they operate with a business license. Their tradenames should be on file with the State.

6. Litigation: have you or your company every been sued successfully, and where’s it recorded, even if unsuccessful? Pacer.com gives details of suits for $.10 per page, presumably of the entire court case. If there a lot of complaints, suits, regardless of outcome, you should explain your side of all these actions.

7. No fudging on your resumes of your key executives. This has become a surprisingly big deal in recent years, because more are doing it. Be prepared to defend your role in the company.

8. Website(s): Do you have one? What’s it used for? Does it look up to date?

9. Required disclosures: You should disclose how much you’re seeking to raise and the terms. Also whether anyone in the state has pronounced on the legality of the securities.

10. Tire-kicking: If your company can answer all the above questions affirmatively, then expect some time-kickers to show up on your doorstep. Inform your employees!

There’s nothing unique in these requirements…..but be prepared on both sides of the table.

This entry was posted in Entrepreneurship, Finance and tagged , , . Bookmark the permalink.

7 Responses to The Brilliance (and Madness) of Crowd Funding

  1. Have you ever considered about adding a little bit more than just your articles? I mean, what you say is valuable and everything. But think of if you added some great images or video clips to give your posts more, “pop”! Your content is excellent but with pics and videos, this website could definitely be one of the best in its niche and you must add more topics like generic levitra online. Excellent blog!

    • asechmentor@gmail.com says:

      We actually are just starting to do video clips on our courses….take a look at the site, http://www.theasoe.com and look at A02, E02 and S06. Has taken quite a while to find a vidographer who’s reasonable.

  2. Erin Teems says:

    Have you ever thought about creating an e-book or guest authoring on other sites? I have a blog based on the same subjects related with buy zyprexa tablets online and would really like to have you share some stories/information. I know my viewers would enjoy your work. If you’re even remotely interested, feel free to shoot me an email.

    • asechmentor@gmail.com says:

      Yes, we are working on an ebook, but don’t have the time to guest author other sites. Feel free to borrow the content, though; we’d appreciate attribution or a link (www.theasoe.com).

  3. Keep up the superb work, I read few posts on this internet site and I conceive that your web site is really interesting and has got lots of good information.

  4. Thanks for your publication on this blog. From my personal experience, periodically softening upwards a photograph may possibly provide the photographer with a little an imaginative flare. Often however, this soft blur isn’t what exactly you had as the primary goal and can in many cases spoil an otherwise good photograph, especially if you anticipate enlarging this.

  5. In these days of austerity as well as relative anxiousness about getting debt, many individuals balk up against the idea of making use of a credit card to make purchase of merchandise or maybe pay for any gift giving occasion, preferring, instead just to rely on the particular tried and also trusted way of making transaction – hard cash. However, in case you have the cash on hand to make the purchase completely, then, paradoxically, this is the best time for them to use the card for several good reasons.

Leave a Reply

Your email address will not be published. Required fields are marked *


three + = 5

This site uses Akismet to reduce spam. Learn how your comment data is processed.