Jobs act webinar updated jan2013

Creative Investment

Research, Inc. Crowdfunding and B2B Firms

It’s time…

Confidential. Not for reproduction or distribution.

Copyright, Creative Investment Research, Inc. 2013

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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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Disruptive Impact



0

10

20

30

40

50

60

70

80

90

1 2 3 4 5 6

Inv

estm

en

t V

olu

me

Time

Financing for the most difficult to finance small businesses.

Crowdfunding to financing businesses that could qualify for a business loan

Crowdfunding Disruptive Impact

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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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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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What most firms will report:



The name, legal status, physical address,

and website address

The target offering amount, deadline

and regular updates regarding progress

Simple description of the purpose and

use of the proceeds.

Simple description of the business and

anticipated business plan

One or two names of the current

owners Simple offering price Share offering price

Simplified description of financial

condition, including, Simple (one or two person) ownership

and capital structure.

No risks relating to these factors

Simple income tax return and financial

statements..certified by the principal

executive officer Simple offering terms

None Simple or no exercise rights

Names of one or two persons who own

the firm

None

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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Investor Limits/Rules



Less than

$100,000 in

investor net

worth

Can invest: the

greater of $2,000

or 5% of net

income

More $100,000

in investor net

worth

10% of net income,

up to a maximum

aggregate amount of

$100,000

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Pebble Watch Screen Shot



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Funded Projects on Kickstarter



0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

Less than $1k $1 to $10k $10k to 20k $20k to $99k $100k to $999k Over $1 mil

Funded Projects

on Kickstarter by funding

amount

Less than $1k

$1 to $10k

$10k to 20k

$20k to $99k

$100k to $999k

Over $1 mil

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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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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

effort: address, etc

6. Marketing – what is the market for

your product or service?

2. Summary – summarize what you

propose to do

7. Sales – how will you sell your

product or service?

3. Team – describe who you are

working with, if anyone

8. Competition – who will you

compete against?

4. Problem – what problem does your

business address?

9. Milestones – what are your

progress points?

5. Solution – describe your solution to

the problem.

10. Money – how much money do

you need? What will you do with it?

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For further information

Confidential.


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

[email protected]

866-867-3795

202-455-0430

http://www.amazon.com/The-JOBS-Act-Crowdfunding-Businesses/dp/143024755X










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Jobs act webinar updated jan2013