Thanks to recent legislation allowing equity crowdfunding, equity-based crowdfunding portals have become the crowdfunding industry’s trendiest (and often most mysterious) advancement.
We’ve heard the term “equity” constantly thrown around; but what is it, and how does it work in the crowdfunding sphere?
Equity crowdfunding is both a specific offering and a generic term used to separate what I refer to as “gift” based crowdfunding from “market” based crowdfunding. The gift based offerings include donations and rewards crowdfunding. Market based crowdfunding consists of equity and debt offerings. Our discussion today will focus on the more generic “market” meaning of equity crowdfunding.
An exciting opportunity that arose in recent years allows companies seeking capital to pursue private investments through accredited investors. The blue sky offerings using Regulation D 506c rules gives companies broad freedom in advertising investments to accredited investors.
Whether companies choose to pursue these capital raises through Equity or Debt offerings, access to millions of accredited investors is now available. The slow, expensive and often restricted process of using brokerage firms to identify prospective clients (often from the brokerage’s own rolodex or email lists) can now be opened up through broad solicitation efforts.
Brokers are not cut out of the process. The SEC has its restrictions even under the more investor friendly 506 rules. But Crowdfunding Equity or Debt is a game changer for both issuers and investors. It is a streamlined process, especially if you use the services of a company like RAZR to handle your marketing and relationships management. RAZR set up a system for companies (that benefits investors) and follows the guidelines set forth by Congress and the SEC, but does so in our modern technological age. It is Fast and Friendly.
If you are an accredited investor looking for capital growth options, or you are a company interested in Equity or Debt deals to secure capital, RAZR is a great option. Costs are reduced, processes are streamlined, and access is exponentially opened. It is a wonderful way to augment and diversify your portfolios.
by Dr. Todd Rickel, via RazrVentures
