What is Equity Crowdfunding? | Regulation CF Explained
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- เผยแพร่เมื่อ 8 พ.ย. 2020
- Equity crowdfunding is a relatively new concept that allows people from all over the world to invest directly in private startup companies. I've been able to invest in multiple startups through equity crowdfunding platforms and also raise capital for my own startup using regulation CF!
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Can you imagine being one of the first investors in Google, Facebook, Amazon, or Microsoft?! 🤯
According to Jeff Bezos, the Founder and CEO of Amazon, the first 20 or so outside investors put in around $50,000 apiece for a stake of a little less than 1% of the company at the time. If those early investors had held on to their entire stakes, and those stakes had never been diluted by later investors, they would be $3.5 billion today - a return of 70,000x!
**What is an Angel Investor?**
An individual who provides capital to an early stage company, usually the first outside investment to support the entrepreneur grow their business. This investment decision can be fueled by one of three main ways: 1) to support the entrepreneur, 2) solve the problem the business is solving, 3) make a financial return. Ideally all three of these come into play when making an angel investment.
#EquityCrowdfunding #Investing #AngelInvesting
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🗳️🤵 PROFESSIONAL BIO 🚀🗳️
Fares Ksebati is the CEO of MySwimPro, a global technology and media company that creates fitness apps that help people improve their performance and health. Most recently, he was selected for the Forbes 30 Under 30 List for 2020 in Consumer Technology. Fares enjoys sharing his passion for entrepreneurship as a keynote speaker and startup mentor to founders around the world.
MySwimPro is a digital community with over one million members in 180+ countries. The app has received international accolades being named the Best App of the Year by Apple and featured in Sports Illustrated. The company has global partners and an international investor base that spans 36 countries.
Fares is also the Founder of World Swim Day, a global initiative that empowers people around the world to be more active through swimming and promote water safety. He competed on Wayne State University's Varsity swimming program and graduated summa cum laude from the Mike Ilitch School of Business. Fares continues to compete internationally and is a 3x U.S. Masters swimming individual national champion, certified USA Triathlon Coach and American Swim Coaches Association Fellow.
Before launching MySwimPro, Fares led digital marketing at multiple venture-backed technology startups developing brand strategy and sharable content. His analytic approach to driving growth and creative insight for engaging audiences and branding has been attributed to the success of numerous early-stage companies. Fares, a Syrian-American has been recognized by Arab America as one of 15 Arab Americans who stole the spotlight in 2017.
🚨Financial Disclaimer 🚨
Do your own research! Fares Ksebati is not a licensed financial advisor. This video, the topics discussed, and ideas presented are opinions and presented for entertainment purposes only. Remember, I'm an entrepreneur, not your business advisor or money manager. The information presented should not be construed as financial or legal advice. Always do your own due diligence in all your business decisions and investment opportunities!
💰Learn how to INVEST in startups, build wealth, and diversify your portfolio. Link below:
www.startupinvestoracademy.com/?
Fast pace... very informative... & accurate content... make for a valuable video. Thankyou!
great content super helpful!!
Awesome 💯💯
Thank you so much for this video! I'd love a further explanation of S.A.F.E.
I got you!
Thanks a lot bro.
thank you again for the continued online MBA!!!
To make a course or not to make a course....that is the question?! 🤔
@@fksebati Yes!!!
Great! I have been looking to learn more about this, especially about LaunchGood because I was going to try something for World Swim Day but it didn't work out. in shaa Allah in 2021 or future projects.
LaunchGood is awesome!!
Security: Equity
Total securities offered: 71,429
Early Bird Price: $0.70
Stocks:142
Now my question is are those securities mine as well?
I invested in chip . Does this mean I'm part of the business? Also will I be invited to events and will I get a return sharehold from what I invested?
Thanks again for the informative videos. I had a question and you might have addressed in another video if so could you please direct me to it. If not could you please explain how you could determine the price per share for say a SAFE invested at a $5 million cap with a 20% discount? Thanks for any help here.
Video on SAFEs: th-cam.com/video/HwuUXA17dvw/w-d-xo.html&t
Here is the thing that always perplexes me about raising funding as a pure startup with no capital or expenses -- exactly what is being reviewed and/or audited? A company with no income, or just a basic influx of cash from the owner and no expenses doesn't seem like it would have much to review/audit.
For sure, checkout this video where I do a deep dive on how to evaluate a startup: m.th-cam.com/video/LylWjW9OTtw/w-d-xo.html
I love your video
Thanks for watching :)
Man, this was an awesome and super practical video! Quick random question over here that I would love to hear your opinion about. If Shark Tank allowed the projects that pitch in the show to do equity crowdfunding, what do you think would be the best way to make that happen, both for Shark Tank, the entrepreneur and the followers of the show. Thank you!!
Good question. In a way, the entrepreneur is crowdfunding for their product/service just by being on the show. I've met several entrepreneurs who have been on the show, and just by being on TV is a huge marketing lift which gives them a surge of sales/revenue. This is sort what an equity crowdfunding round is minus the equity part. Because of current SEC rules you can't publicly solicit funds like that, but if they were to hypothetically open a round on TV, they would fill it easily and raise way more money than they're looking for from the sharks.
@@fksebati Thank you for the answer!! And would it be legal for the program to have an equity crowdfunding platform where all the projects are added automatically after presenting on the show? Just so that the community is more involved and has the option to invest in those projects
@@alexbernadas6124 Not sure, but that sounds like a cool concept for Shark Tank to implement. Seems like a lot of potential conflict of interest. Time will tell!
Have you looked at raising through DealMaker?
Hi, I would like to understand how all investor's crowdfunding SAFE's are shown in a single line item on a company's cap table. What is the logic behind the same. Thanks
Good question! This is only done when there's a SPV (Special Purpose Vehicle). Special Purpose Vehicles (SPVs) are legal entities that are created for one specific purpose. In venture, SPVs are used to pool money from a group of investors to make a single investment in a startup. This is becoming pretty standard with Equity Crowdfunding deals and sometimes larger groups of smaller angel investors. Founders like SPVs because it's simple and you can accept capital from a group of investors without having to add each one individually to the cap table. Fewer investors on the cap table means less administrative work and the ability to keep sensitive information to a smaller number of people.
I'm interested to learn more about CF and Equity CF? Where best to find consultant on this topic?
Checkout the other videos on my channel...I've made a few on how I've raised $1M for my business through Regulation CF
If I invest into a safe, how do I know what percentage of equity I will have in the company, since it’s not liking with shares?
Good question! I made a video on SAFEs which you should checkout here. In the meantime, with a SAFE you have to look at the valuation cap. If for example, you invest $1,000 in a SAFE with a $1M valuation cap, that's your starting point (0.1% of the startup). If the company raises in the future at a $10M Valuation, you will convert as if you invested at $1M. Then there's dilution based on the round size in the future among other things. That should give you an idea how it works. th-cam.com/video/HwuUXA17dvw/w-d-xo.html&t
@@fksebati Thank you. I’ll check out the video
Is there any documents that investors have to file in SEC if they invested in an early-stage startup?
Great question! Investors don't need to file anything when they invest!
@@fksebati thank you for answering!
@@fksebati They don’t need to file. So is it better not to file, or is it better to file? (I just moved to the USA and everything is new to me. I am wondering to invest in a startup. It would be a crowdfunding investment.)
Can i raise funds for to build a mobile app? What about a website?
You can raise funds to do anything you just need to position the pitch and story appropriately. Although it will be difficult to raise unless you have a compelling story and traction.
Can any company in the world raise money in equity crowdfunding or only American companies (startengine, we fund etc…)
Great question! Yes, any company can do this regardless of location. In the United States, the big three platforms are Wefunder, Republic, and StartEngine. For the UK, it's Seedrs. Outside those regions, see Eureeca. A company can still raise on Wefunder, Republic, or StartEngine outside the United States if they setup an entity in the US for around $500. You can do that with Firstbase.io.
@@fksebati thanks for your reply - so in short I have to setup a company on the U.S to raise funds on equity crowdfunding platform based in the US a right? That’s why you give me the link. Thanks again.
If you reach the crowdfunding investment limit, do you have the opportunity to invest again 1 year later?
Correct! The investment limit for capital raises (the company) and investments (the investor) is reset every 12-months from the time of investment/capital raise.
@@fksebati
Thanks, that’s good to know.
Does the share price typically change for the next round of funding or does it typically remain the same for crowd funding?
@@growthinvesting7113 Yes, the share price (if investing in the same company) is most likely going to change over time as the underlying traction and market potential changes.
How do I get in contact with you
add me on LinkedIn! And shoot me a message.
Is it legal in the USA?
Yes! Crowdfunding and Equity Crowdfunding is very popular in the United States!
I invested in Trust Stamp (recently available on the OTC market) and NowRx through SeedInvest last year, so it is legal. So far, my Trust Stamp investment is already profitable.
Do you have a Luno wallet or Maybank if yes reply luno I have a reward for you
:D i upload the latest crowdfunding videos
I have no idea what this guy is talking about. I may as well be watching an instructional video on how to perform brain surgery.