Learn how Public Raise helps small and medium-sized businesses raise capital online so you can achieve your corporate goals.
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Crowdfunding can seem like a much simpler option than traditional fundraising, but doing it right is anything but easy. According to research by the Crowdfunding Center, only 22.4% of campaigns achieve their funding goals. With that estimated 77% failure rate, that means for every success story you see, there are many more that didn’t work out. The primary reason for failure is insufficient marketing.
Develop a process through which a company raises funds from external sources to achieve its growth objectives.
Identify and engage investors to create the most value for your company as well as for shareholders.
Nurture traffic and convert to investors. Use our tools and resources to help you effectively close your investment round.
Helping Small and Medium-sized Businesses Find Investors Online
The 77% crowdfunding failure rate is primarily due to not enough marketing. And for small and medium-sized businesses, a failed campaign is more than just a financial disappointment. It can be a significant disruption and damage company morale. At Public Raise, we know the best practices that can help your effort succeed. These are built into our technology and systems, so it’s easy to follow. We’ll guide you through the entire process, step by step.
Generate INVESTOR LEADS that you can connect with. Create websites and funnels that capture your visitors' contact information, so you can generate investor leads that you can follow-up with.
We will help you create an amazing investment offering page that walks your traffic through a step-by-step investment process, converting them from visitors to actual investors in your business.
Interested in learning more?
Contact us for a complimentary, no-obligation consultation today and see if your company qualifies for a public capital raise.
21
Clients
113K
Investors
$124mm
Capital Raises
Not long after the internet became a widespread tool, small businesses started eying it as a way to raise capital from the general public without running afoul of state and federal securities laws. Crowdfunding was a possible route, but companies often couldn’t issue equity in their company when seeking funds from the general public. A possible solution came in 2012 when the Jumpstarting Our Business Startups or JOBS Act was passed.
More specifically, Title III of the JOBS Act allows for a ‘crowdfunding’ exception to securities laws that would otherwise require investors to be accredited investors. Maybe we should actually back up for a second before we get to these exemptions.
After the stock market crash of 1929 and The Great Depression, the Securities Act was passed. It meant to protect against fraud by placing certain requirements on the issuance of a security unless an exemption applies. Of course, things like the internet and crowdfunding didn’t exist in the 1930s, so there was no exemption for small businesses to seize upon. Title III of the JOBS Act creates such an exemption for crowdfunding.
Raising capital and issuing securities in this way is known as Regulation Crowdfunding. This means of issuing securities bypasses the need to have accredited investors and, subject to some limitations, the need for determinations based on income or net worth. Regulation crowdfunding can work kind of like the GoFundMe or Kickstarter campaigns you’ve probably seen going viral on social media, except instead of those sites, issuers use third-party intermediaries that have registered with the Securities and Exchange Commission, or SEC, to make their offering.
The main aspects of Regulation Crowdfunding touch on five main areas of concern:
The exemption’s actual requirements,
The requirements surrounding the issuers of securities in a crowdfunding
placement,
The requirements that apply to the intermediaries that are used in crowdfunding
offerings,
Some additional funding portal requirements, and
Other miscellaneous provisions.
There are also some limitations that have been placed on Regulation Crowdfunding. Some of the limitations mentioned above include limitations on how much can be invested in each 12-month period, as well as restrictions on reselling the security within a one year period. For example, in a 12-month period, the total amount of securities issued to an individual investor cannot exceed $100,000. This is in addition to the following limitations based on an individual’s annual income and net worth.
If an individual’s annual income or n et worth is less than $100,000, the limit is $2,000 OR 5 percent of the lesser of either his or her annual income or net worth, whichever is greater;
If both the annual income and net worth are equal to or greater than $100,000, then the limit is 10 percent of the lesser of either his or her annual income or his or her net worth.
As mentioned above, another limitation on Regulation Crowdfunding is that securities must be sold through a funding ‘portal’ or through a broker-dealer that is registered with the SEC. The purpose of this requirement is to offer some protection to investors investing through crowdfunding. However, issuers should know the limitations regarding what funding portals can offer. For example, a funding portal cannot offer investment advice. Issuers can find a funding portal by visiting the website of the Financial Industry Regulatory Authority, also known as FINRA.2
Another requirement related to Regulation Crowdfunding is the inclusion of Bad-Actor provisions, which means that if a covered person, such as the issuer or a director of the company or equity owner, had criminal convictions or other disciplinary action against him, something that is known as a ‘qualifying event,’ then the issuance of the securities would not be allowed. These disqualifications however will not look back at actions before May 16, 2016, when the Regulation Crowdfunding provisions went into effect.
Lastly, the requirements include certain disclosures that must be made. While the Act itself is meant to reduce the regulatory burden on issuers, certain disclosures still exist, generally falling into one of five categories:
Director and officer information;
Principal shareholder information;
The issuer’s business plans, including their risk factors;
A description of the offering; and
Financial disclosures
Disclosures to the SEC and potential investors are made through Form C, a 31 question form that must be filed with the SEC. However, it should be noted that the issuance of these securities must be made through a registered third-party, and this third party often can offer guidance about filling out and filing this form with the SEC. There are also ongoing reporting requirements that exist with regulation crowdfunding, such as annual reports that must be filed 120 days after the end of the issuer’s fiscal year.
With other firms, you are offered some resources, but you usually have to go out and hire a marketing agency. Or you have to find your way through their systems to utilize their resources. That means more time, more project management, and sometimes, more headaches.
With Public Raise, our team is your partner throughout the entire process.
As a business owner/manager, you know better than anyone that we live in a risk-filed environment. At Public Raise, we take compliance seriously to help make sure your Reg A+, Reg CF, or Reg D fundraising effort is handled according to all regulations.
We have established relationships with various FINRA broker-dealer, so we're set up to handle these complexities for you.
Integrate your calendar and zoom account for investor meeting appointments. Send out automatic reminders. Integrate social media channels and create automated workflows to retarget your audience.
Use technology to automate and streamline marketing tasks and processes. This can include tasks such as email marketing, social media posting, and ad targeting.
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-Investor Marketing CRM
-Investor Funnels
-Compliance Assistance
-Broker-Dealer and Attorney Introductions
Public Raise specializes in helping small and medium-sized businesses raise capital legally through online channels. This expertise extends to businesses that serve consumer retail, real estate, technology, financial services/fintech, and energy. Contact us to learn more about raising capital.
Disclaimer – Public Raise performs no underwriting function and acts solely on behalf of a client company in providing in-house financial advisory and investor marketing services. Although the consulting services of Public Raise may include general advice and consultation regarding general legal topics relating to the consulting services to be rendered, particularly with respect to areas of financial expertise of Public Raise the services rendered by Public Raise do not include the rendition of professional legal services or any specific legal service, advice or consultation by any affiliate of Public Raise. Public Raise is not a Broker Dealer or registered with FINRA or the SEC. Public Raise will not accept broker success fees or commissions for raising capital.
David Lee, who is the Founder of Public Raise, is also a Managing Director and Registered Representative of Netshares Financial Services, LLC ("Netshares"), an SEC registered broker-dealer. Any activities of Public Raise, its employees, or the Management of Public Raise, which is conducted in connection with or set forth in this website is not in any way related to the position of an affiliated person of Netshares. The Management of Public Raise and its business are separate and independent of Netshares and is not part of the business conducted by Netshares and any representation to the contrary is false. Netshares has no responsibility or liability for the activities of Public Raise, its employees or the Management of Public Raise, or any representations made in connection with or set forth in this website.
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