The document discusses the JOBS Act and its provisions for crowdfunding and raising capital. It allows small businesses and startups to raise up to $1 million from online investments. Medium and larger firms can raise up to $50 million annually. The SEC must also reach out to women and minority-owned firms. Crowdfunding will have a disruptive impact by providing financing options for difficult to finance small businesses. However, many requirements and details still need to be addressed, such as standards for financial disclosures and investor education. Platforms will also need to register and help manage the crowdfunding process to facilitate these small business investments.

1. Creative Investment
Research, Inc. Crowdfunding and B2B Firms
It’s time…
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2. The JOBS Act
Multiple Small Business Capital Access Channels
Allows existing and newly created companies (emerging growth
companies - EGCs) and small firms to raise up to $1 million
($1,000,000) in equity by selling shares.
Allows medium and larger firms issue up to $50 million of
securities per year “in offerings that are free from the resale
and investor restrictions associated with privately placed
securities.”
Women and Minority-owned firms:
Title VII requires the SEC to reach out to women and minority
firms.
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3. Disruptive Impact
90
80
Financing for the most difficult to
finance small businesses.
70
60
Investment Volume
50
40 Crowdfunding to financing businesses
that could qualify for a business loan
30
20
10
Crowdfunding Disruptive Impact
0
1 2 3 4 5 6
Time
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4. Issues in the details
Emerging Growth Companies (EGCs):
Firms with less than $1 billion in revenues
25 to 26 million firms
What does this get you?
The opportunity to raise up to $1 million online
Exemption from filing certain financial, executive
compensation and other data
Is that it?
Yes. That’s all for you. Take what you can get and run with it.
Platforms and brokers, however, get a great deal.
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5. Reporting and other requirements
Can safely ignore most of the more complicated
reporting requirements:
1. Price of security easy to determine:
THE MARKET WILL DO SO
2. Will have one owner and no history
3. Most owners won’t be looking to sell
Most of the Crowdfunding Provisions are like this
Most of the burden is on the Funding Platforms, at this
point, anyway…..
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6. What most firms will report:
Simple description of the purpose and
use of the proceeds.
The name, legal status, physical address, The target offering amount, deadline
and website address and regular updates regarding progress
Simple description of the business and
anticipated business plan
One or two names of the current
Simple offering price Share offering price
owners
Simplified description of financial
condition, including, Simple (one or two person) ownership
and capital structure.
Simple income tax return and financial
statements..certified by the principal
executive officer Simple offering terms
No risks relating to these factors
None Simple or no exercise rights
Names of one or two persons who own
the firm
None
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7. Crowdfunding Platforms
Since Emerging Growth Companies (EGC) are
raising capital over the internet, they must be
free to communicate (free from Securities laws)
Funding platforms are websites created for the
sale of EGC securities. They must:
– Register with the SEC and FINRA
– Provide risk and investor education materials
– Ensure that investors understand risk
– Manage crowdfunding process
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8. Investor Limits/Rules
Less than Can invest: the
$100,000 in greater of $2,000
investor net or 5% of net
worth income
10% of net income,
More $100,000
up to a maximum
in investor net
aggregate amount of
worth $100,000
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9. Pebble Watch Screen Shot
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10. Funded Projects on Kickstarter
20,000
Funded
18,000 Projects
on
16,000 Kickstarter
by funding
amount
14,000
12,000
10,000
Less than $1k
8,000
$1 to $10k
6,000
$10k to 20k
4,000
$20k to $99k
2,000
$100k to $999k
0
Over $1 mil
Less than $1k $1 to $10k $10k to 20k $20k to $99k $100k to $999k Over $1 mil
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11. B2B Firms
How many B2B firms need capital?
All of them. CONSIDER CREATING A PLATFORM TO
FINANCE CUSTOMERS!
What should you be doing now?
Preparing.
How?
Prepare business plan(s)
Get income tax return, audited statements
Outline/simplify ownership structure (if needed)
Review every single crowdfunding website you can
Review application process
Prepare your draft pitch
Enhance/enlarge social media/network
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12. The Pitch
Create a ten (not including the cover) page slide PowerPoint
presentation that describes your business. Use this to create and
supplement your Crowdfunding website solicitation.
1. Cover slide – information on your 6. Marketing – what is the market for
effort: address, etc your product or service?
2. Summary – summarize what you 7. Sales – how will you sell your
propose to do product or service?
3. Team – describe who you are 8. Competition – who will you
working with, if anyone compete against?
4. Problem – what problem does your 9. Milestones – what are your
business address? progress points?
5. Solution – describe your solution to 10. Money – how much money do
the problem. you need? What will you do with it?
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13. For further information
Creative Investment Research, Inc.
William Michael Cunningham
The JOBS Act: Crowdfunding for Small
Businesses and Startups -
http://www.amazon.com/The-JOBS-Act-
Crowdfunding-Businesses/dp/143024755X
info@creativeinvest.com
866-867-3795
202-455-0430
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