by Brandon Raatikka According to FactRight’s tracking, the SEC qualified 21 Reg A+ Tier 2 offerings in the second quarter of 2017, maintaining a brisk pace by the standards of Reg A+’s relatively short history. Approximately 45% of the 96 Tier 2 offerings qualified since late 2015 (not later withdrawn or used for merger purposes) have been qualified in just the first half of this year. Three issuers made headlines in June 2017, when each listed common equity (that had been previously issued under Regulation A offerings) on a national securities exchange: Myomo, Inc. (NYSE: MYO), Adomani, Inc. (Nasdaq: ADOM), and ShiftPixy, Inc. (Nasdaq: PIXY). In the wake of successful public listings, it will be interesting to see whether a growing proportion of issuers will seek to use Regulation A as a stepping stone to becoming a fully public company. Interact with FactRight’s database through the charts below to glean additional insights about the state of the Regulation A space through the second quarter of 2017. The charts below are dynamic; if you click on a single data point in any chart, it will filter the data displayed on the sidebar at left and in the remaining charts. (For instance, if you click […]
By Trudy-Anne McLeary, Associate, Corporate and Finance | Benjamin T. Brickner, Associate, Corporate and Finance In an investigative report and investor bulletin, the SEC concludes that offers and sales of cryptocurrency coins and tokens may be subject to federal securities laws. On July 25, 2017, the Securities and Exchange Commission (the Commission) released an investigative report with important implications for issuers and sponsors of initial coin offerings (ICOs) that raise funds for cryptocurrency ventures. The report, prompted by the recent proliferation of such activity, concluded that coins offered to purchasers in ICOs constitute securities regulated by the Securities Act of 1933 (Securities Act) and the Securities Exchange Act of 1934 (Exchange Act). As a result, absent an exemption, such offerings must be registered with the Commission, similar to other public offerings. The press release accompanying the report notably quotes the new Commission chairman and the new heads of the Corporation Finance and Enforcement divisions. This combined statement gives the report unusual weight and makes clear to Commission Staff that its contents describe senior officials’ current thinking on cryptocurrency regulation. Background In early 2015, The DAO, an unincorporated association, organized an IPO-style offering in which investors were offered DAO Tokens in exchange for Ether, a cryptocurrency […]
Crowdfund Beat News Wire, SEC issued an investigative report stating, “tokens offered and sold by a ‘virtual’ organization known as ‘The DAO’ were securities and therefore subject to the federal securities laws.” U.S. Securities Laws May Apply to Offers, Sales, and Trading of Interests in Virtual Organizations FOR IMMEDIATE RELEASE 2017-131 Washington D.C., July 25, 2017— The Securities and Exchange Commission issued an investigative report today cautioning market participants that offers and sales of digital assets by “virtual” organizations are subject to the requirements of the federal securities laws. Such offers and sales, conducted by organizations using distributed ledger or blockchain technology, have been referred to, among other things, as “Initial Coin Offerings” or “Token Sales.” Whether a particular investment transaction involves the offer or sale of a security – regardless of the terminology or technology used – will depend on the facts and circumstances, including the economic realities of the transaction. The SEC’s Report of Investigation found that tokens offered and sold by a “virtual” organization known as “The DAO” were securities and therefore subject to the federal securities laws. The Report confirms that issues of distributed ledger or blockchain technology-based securities must register offers and sales of such securities unless a valid exemption applies. Those participating in unregistered offerings also […]
Crowdfund Beat News Wire, Delaware Blockchain Initiative: Transforming the Foundational Infrastructure of Corporate Finance or much of American corporate finance is Delaware corporate law. Later this year, a small change to Delaware corporate law, if enacted, could facilitate a major simplification of the plumbing of the financial system built on top of that foundation. The change is part of the Delaware Blockchain Initiative (DBI), which then-Governor Jack Markell introduced in May 2016. The initiative will allow for the application of distributed ledger technology to many of the private sector’s most basic and critical legal documents, which companies currently file with the Delaware Division of Corporations. What Is Blockchain Technology? Blockchain technology, also known as distributed ledger technology, is a new type of information technology that combines two components: distributed ledgers and smart contracts. Distributed ledgers are mutual, shared ledgers. They create a single record of transactions among multiple parties, providing one immutable, “golden copy” of data that all parties see at the same time and can trust as valid. Consequently, parties do not need to maintain their own copies and reconcile with each other. Distributed ledgers are append-only databases that maintain a perfect, immutable audit trail of who did what […]
BY SARA HANKS , CrowdFundBeat Sr.contributing Guest Editor CEO/Founder,Crowd check.Inc. So, one year ago today, Regulation CF went into effect. Small companies can make offerings up to $1 million (recently increased to $1.07 million) and roughly 325 companies have made Reg CF offerings so far. Roughly 80 companies have filed Form C-U to notify the SEC of the conclusion of their offering (they can also use Form C-U to report progress of the deal, so the raw numbers need refining). Another 50 or so companies have taken advantage of the fact that the SEC tells us that multiple closings are permitted once a company reaches its target offering amount, and so have received funds but have ongoing offerings. We’re talking about modest success so far. Companies are finding it takes a while to raise the funds they are seeking and many offerings are still in progress, so overall success rates are going to go up in time. And several companies have had million-dollar raises. The less-encouraging story in in the area of compliance. By our calculation, by May 1 perhaps 100 companies should have filed annual reports under Form C-AR (all the companies which had filed C-Us by that date and […]
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By Mark Robertson CrowdFundBeat Sr. Contributing Editor. President at CrowdDD, LLC, This is an open letter to all real estate sponsors. Investors want better reporting. Concise, short, informative, and easy to read reports. Unfortunately, most sponsors do poor job of communicating results with investors. I have over 50 equity crowdfunding investments and the quality of the quarterly reports varies wildly. The poster child for good reporting is Praxis Capital lead by Brian Burke. They have a one page report with graphs, relevant statistics, and a short write up of the past quarter’s results and commentary. They key features of their report are they inform the investor of the only 3 things investors truly care about. How much is MY distribution? What is the cash on cash return? What is it as a percentage of my investment? How does it compare to your projections for this quarter? The properties performance. Most importantly is the NOI. What is this quarters NOI compared to the projections made by the sponsor at the time of my investment? What is occupancy compared to both last year’s quarter and compared to projections? If actual distributions are below projections or if NOI is below projections, we want to know why. What we […]
By Mark Roderick CrowdFunding Beat Sr. contributing editor and crowdfunding attorney with Flaster/Greenberg PC. Cryptocurrencies are hot. And often the sale of cryptocurrencies is referred to as Crowdfunding. Unfortunately, the use of “cryptocurrencies” and “Crowdfunding” together creates confusion about both, along with some pretty serious legal risks. We use “Crowdfunding” to mean raising money for a business or other venture online. We say “donation-based Crowdfunding” when we’re talking about Kickstarter, where people ask for donations. We say “equity-based Crowdfunding” when we’re talking about raising money from investors, who receive a stock certificate or some other security. A cryptocurrency is, well, hard to pin down. It’s a transaction registered in a distributed, secure database. Because it exists in limited quantities and is secure, it has value. Like anything of value, it can be used as a currency. For purposes of this post, the key feature of a true cryptocurrency is that is has value of itself, like a nugget of gold. You use Crowdfunding to sell shares of stock. Obviously, the paper certificates representing the shares of stock have no value by themselves, they have value only to evidence ownership in the business that issued the certificates or, more exactly, in the cash flow the business is expected to generate. […]
Crowdfund Beat News Wire, Paradise Ridge Hydrocarbons, Inc. (OTC Pink: PRGE) is primarily engaged in the re-entry and re-working of existing oil & gas properties. Shares of the energy company are surging 50% on Monday, May 1, 2017. Over the past month, Paradise Ridge Hydrocarbons, Inc. saw average daily volume of 95,129 shares. However, volume of 205,639 shares or dollar volume of $129,552, has already exchanged hands on Monday. Shares of Paradise Ridge Hydrocarbons, Inc. are jumping today, after the company announced it has diversified its business operations through the acquisition of StackCap.com, an equity crowdfunding platform. Furthermore, the company says it will utilize STACKCAP, Inc. to conduct further debt and equity financing services and platforms. Ultimately, the acquisition is scheduled to close on May 31, 2017. Here is the full press release detailing of the acquisition: Paradise Ridge Hydrocarbons, Inc. Press Release: AUSTIN, Texas, May 1, 2017 /PRNewswire/ –Paradise Ridge Hydrocarbons, Inc. (OTC Pink: PRGE) today announced that it has signed a definitive agreement to acquire equity crowdfunding platform stackcap.com owned by STACKCAP, INC. Equity crowdfunding fuels innovation and growth by providing access to capital that can take businesses from ideas to viable products and real jobs. PRGE will […]
By Anum Yoon Crowdfund Beat Guest Editor, The idea of crowdfunding has gained popularity in the past few years. Individuals contributed approximately $880 million in 2010, when the concept was still new and innovative. Today, the practice of crowdfunding generates tens of billions for startup enterprises, budding entrepreneurs and motivated professionals on an annual basis. But the concept behind this relatively new phenomenon isn’t limited to financial investments. Some of the more tech-savvy and energy-conscious leaders of today are now exploring the value of crowdfunding to meet our nation’s growing energy needs. The results are showing tremendous potential to revolutionize the way we look at our utility bills from this point forward. Embracing the Shared Economy Crowdfunding is paving the way for what many experts refer to as a “sharing economy.” Expected to be worth over $300 billion by 2025, the sharing economy provides new opportunities around the world. When applied to energy production and consumption, this amounts to newly built, sustainable energy sources and the establishment of new facilities in remote regions of the world. The Africa Regional Climate Change Programme, a part of the United Nations Environment Programme, or UNEP, points out that more than 60% of Africans […]
Crowdfund Beat News Wire, NextGen Announces Finalists for Crowdfunding Video Awards Season Finale, Recognizing the Year’s Most Creative Campaign Videos NextGen Crowdfunding® – the leading company that helps people explore new types of crowdfunding – announces the finalists for the season finale of the Crowdfunding Video Awards (CVAs). The CVAs is a new online series from NextGen showcasing videos from both rewards-based and investment crowdfunding campaigns featured on Indiegogo, Kickstarter and other leading rewards-based and investment crowdfunding platforms. This innovative show provides entrepreneurs with new ways to promote their companies to supporters and investors. The first season of the CVAs included six preliminary awards shows and will culminate in a final seasonal awards showon Wednesday highlighting the first-place winners from all six rounds of voting. These six campaigns will go head to head to be recognized as one of the top three campaigns from this season and win: First place: $10,000 Second place: $5,000 Third place: $2,500 The finalists include: Limitless Phone Case by Mous (Round One): Will protect your phone from breaking Noria by Noria Home (Round Two): First window air conditioner designed with you in mind FireFlies Audio (Round Three): Truly wireless earbuds Farm from a Box (Round Four): Complete […]
The Cambridge Centre for Alternative Finance (CCAF) has become the standard by which everyone measures the growth and aggregate success of the alternative finance industry. Cambridge was the first major institution to capture a snapshot, both qualitatively and quantitatively, on the emergence of crowdfunding, online... Read More
Family-owned and operated distillery Napa Valley Distillery completed its equity crowdfunding round on Indiegogo/MicroVentures’ platform. The company secured its initial $50,000 funding target early on and finished the round with $778,478 from 790 backers. As previously reported, Napa Valley Distillery was founded in 2009 and is... Read More
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With its equity crowdfunding campaign set to close on Crowdcube later this week, Money Dashboard, a UK-based firm that has created a personal finance management app, has successfully secured its initial £1 million funding target from more than 1300 investors. Money Dashboard’s app notably empowers more than 100,000... Read More
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Last week, Funding Circle celebrated seven years of operation. Launched in August of 2010, three friends from university concocted the concept of peer to peer lending in support of UK SMEs. That first year of operation saw a mere £2 million in loans originated. Today,... Read More
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The Dubai International Financial Centre (DIFC) has announced on Monday that its FinTech Hive Accelerator Program has selected the first 11 finalists. The organization stated that the program will feature the 11 finalists and brings together an emerging generation of technology leaders and entrepreneurs to address the... Read More
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Australia-based online lender SocietyOne announced on Monday it is celebrating its five-year anniversary of helping customers achieve their lending needs. This celebration comes less than two months after the lending platform surpassed $300 million in total originations. The lender revealed that more than 13,000 customers thanks... Read More
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Netherlands-based Bolt Mobility has launched an equity crowdfunding campaign on Seedrs. The startup is currently seeking €1.5 million through the funding round as it prepares to create its first scooter, AppScooter. According to Bolt Mobility, the AppScooter notably accelerates 150% faster and goes up to 400km with our modular... Read More
On Monday, UK-based higher education lending platform, Prodigy Finance, announced it secured $240 million for international student funding. According to the online lender, the new investment includes a $40 million Series C equity round, led by international venture capital firm Index Ventures, with Balderton Capital... Read More
On Monday, Funding Circle announced it is set to launch a new version of its existing Autobid and Autosell lending tools. Funding Circle will be eliminating the option to manually choose which businesses an investor may lend to and which loan parts to sell will be... Read More
Mybit, a Switzerland-based Ethereum blockchain powered, renewable asset investment platform, announced on Monday it secured $2.8 million through its 30-day crowdsale, which ended on August 15th. According to Mybit, the platform connects investors from around the world with businesses and individuals seeking to fund revenue-generating Internet... Read More