The Crowdfunding Handbook
Raise Money for Your Small Business or Start-Up with Equity Funding Portals
Author: Cliff Ennico
Pub Date: May 2016
Print Edition: $19.95
Print ISBN: 9780814433607
Page Count: 288
Format: Paper or Softback
e-Book ISBN: 9780814433614
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Acknowledgments Introduction The Road Map: Where to Find Detailed Discussion of Regulation Crowdfunding Rules
Part I: The Basics of Crowdfunding
Chapter 1: What Is Crowdfunding?
Taking the Friends and Family Offering to the Next Level
The Different Types of Crowdfunding
Who Should Be Reading This Book?
Where This Book Will Take You
Chapter 2: The Evolution of Crowdfunding
The Friends and Family Offering
Intermediate Steps: Microlending and Peer-to-Peer Lending
The Social Media Revolution
Kickstarter.com and Project Crowdfunding
“Angel Investor” Social Media Websites
“Intra-State” Crowdfunding Under State Law
Social Media Crowdfunding (Title III Crowdfunding)
A Brief Overview of Crowdfunding Under Title III of the JOBS Act and Regulation Crowdfunding
Part II: Launching a Successful Title III Crowdfunded Offering, Step by Step
Chapter 3: Is Crowdfunding Right for Your Company?
Crowdfunding Is Not for Everyone
Is Your Company Right for Crowdfunding?
Qualifying under the JOBS Act and Regulation Crowdfunding
Handling Your Crowd of Investors if the Offering Is Successful
Chapter 4: Preparing Your Company for a Crowdfunded Offering
Choose the Right Legal Entity
Decide Where to Incorporate, or Consider Reincorporating Somewhere Else
What Type of Security Will You Be Offering?
Amend Your Articles of Incorporation to Create a Separate Class of Shares for Your Crowdfunded Offering
Set Your Offering Amount and Determine the Dilution for Existing Investors
Prepare a Term Sheet for the Offering
Get Your Management Team and Initial Investors on Board
Chapter 5: Launching Your Crowdfunded Offering
Finding the Help You Need
Preparing Your Disclosure Documents
Finding the Right Funding Portal for Your Offering
Setting the Offering Schedule and the Min/Max Amounts
Chapter 6: Managing and Marketing Your Crowdfunded Offering
Your Offering Announcement: Where It Should Go, Where It Can’t Go
Advertising and Promoting Your Offering on the Funding Portal
Advertising and Promoting Your Offering Elsewhere
Can the Funding Portal Help You Advertise Your Offering?
Updating or Changing Your Offering Documents Mid-Offering
What If You Made a Mistake in Your Offering Documents?
Closing Your Offering Early, or Quitting While You’re Ahead
Filing Progress Reports with the SEC: Form C-U
Chapter 7: After Your Successful Crowdfunded Offering Is Completed
Getting Your Money from the Funding Portal
Issuing Your Securities to Investors
Complying with State “Blue Sky” Laws
Creating a Stock Transfer Ledger
Updating Your Capitalization Table
Filing Your Annual Reports and Holding Your Annual Shareholders Meeting
Making Sure Your Company Doesn’t Get “Too Big”
Part III: Communicating with Your Crowd
Chapter 8: Keeping Your Crowd under Control
Coping with Your New Partners
Developing a Shareholder Communication Program
Dealing with Time Vampires, Mata Haris, and Know-It-Alls
When You Have to Change Your Business Plan
When It’s Time to Throw in the Towel
When the Revolution Has Begun
Chapter 9: Going Back for Seconds: Launching Multiple Crowdfunded Offerings
Can You Launch Other Offerings at the Same Time as Your Crowdfunded Offering?
The “Upstairs-Downstairs” Offering
Can You Launch Another Crowdfunded Offering Right After You Complete Your First One?
Some Things to Consider When Launching a Follow-up Offering
Part IV: Considerations for Investing in a Crowdfunded Offering or Setting Up a Funding Portal
Chapter 10: Should You Invest in a Crowdfunded Offering?
Why Are You Investing in a Crowdfunded Company?
Can You Legally Invest in a Title III Crowdfunded Offering?
Are You an Accredited Investor?
What Is Your Tolerance for Risk?
Calculating Your Investment Limit under Title III
Can You Lie about Being Legally Able to Invest?
Participating in a Crowdfunded Offering
Bringing in Other Investors
Selling Your Crowdfunded Securities
Getting Involved in Your Crowdfunded Company
When Can You Write Off Your Investment in a Crowdfunded Company on Your Taxes?
Chapter 11: Should You Set Up a Funding Portal?
It May Be Too Late for the “Early Money”
Picking a Crowdfunding Niche
Setting Up a Funding Portal
The Portal’s Obligation to Vet Issuers
The Portal’s Obligations to Investors
The Portal’s Obligations to the SEC
The Portal’s Obligations to Market and Grow Its Business
The Portal’s Obligations in Managing Offerings
The Portal’s Liability for Mistakes
How a Funding Portal Makes Money
Using Crowdfunding to Raise Money for a Funding Portal
Part V: Background Essentials: Crowdfunding History, Law & Regulations
Chapter 12: Federal Regulation of Private Offerings of Securities prior to the JOBS Act
Early 1900s: The States Get the Ball Rolling with “Blue Sky” Laws
1933: The Federal Government Wades into the Securities Markets
1964: The SEC Adopts Regulation A
1970: The SEC Adopts Rule 146 for Private Placements
1982: The SEC Adopts Regulation D, Adding More Exemptions
1996: The National Securities Markets Improvement Act (NSMIA)
2012: The Jumpstart Our Business Startups (JOBS) Act
Chapter13: The JOBS Act and the New SEC Crowdfunding Rules
Title I: The “IPO On-Ramp”
Title II: Private Placements and New Rule 506(c)
Title III: Crowdfunded Offerings of Securities
Title IV: Expanded Availability of Regulation A
Title V: Changes to Definition of “Public Company” in the Securities and Exchange Act of 1934
Title VI: Special Provisions for Banks and Bank Holding Companies
Afterword: What the Author Really Thinks of Crowdfunding
Appendix 1: Text of SEC Form C
Appendix 2: Text of “Question and Answer Format” Version of SEC Form C
Appendix 3: Amended and Restated Certificate of Incorporation Creating Classes of Voting and Nonvoting Common Stock and Convertible Preferred Stock [Delaware form]
Appendix 4: Provision of LLC Operating Agreement Creating Classes of Voting and Nonvoting Membership Interest, with Nonvoting Preferred Interests
Appendix 5: Some Rights of Shareholders under State Corporation Laws
Appendix 6: Term Sheet for Crowdfunded Offering of Debt Securities
Appendix 7: Term Sheet for Crowdfunded Offering of Series B (Nonvoting) Preferred Shares in Corporation
Appendix 8: Term Sheet for Crowdfunded Offering of Class B (Nonvoting) Membership Interests in a Limited Liability Company
Appendix 9: Sample “Risk Factors” Section for a Crowdfunded Offering Statement
Appendix 10: Sample Accredited Investor Questionnaire
Suggestions for Further Reading
About the Author
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