Equity Crowdfunding : Entrepreneurs Don't Wait. Get Prepared Now !

Since the signing of the Jobs Act on April 5th, demands for information and clarity on issuer compliance rules has skyrocketed. Entrepreneurs and startups want to know what steps they should be taking now to successfully launch a compliant crowdfund investing campaign. The launch of  http://www.crowdfundingroadmap.com is the perfect place to get quick answers and easy solutions to help them get started now.

"After working with Startup Exemption’s Sherwood Neiss, Jason Best, Zak Cassady and many others to help get the Jobs Act passed, and after seeing the final disclosure requirements that were written into the law for the issuers, it was clear that  most people would not be able to do this entirely on their own and would need help," said Ruth Hedges CEO and creator of the Funding Roadmap and CrowdfundingRoadmap. “Since crowdfund investing is a  major change in the way startup capital is raised and the rate at which companies are launched and expanded, it's vital that we start raising awareness now and begin to prepare entrepreneurs ahead of time.

I realized that many may need to  become incorporated, they may need assistance from an accountant  (since the bill requires certified and audited financial statements for different levels of fund raising), and they would definitely all need to  begin to create the lengthily materiel spelled out in the bill in a easy and inexpensive way. Our Funding Roadmap business plan and due diligence reporting system on the cloud  is the perfect solution. A partnership between Funding Roadmap, Laughlin Associates, and 1-800 Accountant was created and http://crowdfundingroadmap.com was born."

Setting a goal of one million compliant entrepreneurs.

"It's important to understand we're already heading toward the 3rd month of the 270 day SEC rule-making period, and that January 2013 will come quicker than we might think.” says Hedges. If the proponents and legislators who passed this bill want the launch of crowdfund investing next year to be successful, we all need to set a goal to prepare at  least 1 million entrepreneurs for legalized crowdfunding by early 2013.” says Hedges.  “If we reach that goal then we’ll have a pipeline of issuers to fill the growing list of intermediaries and funding portals emerging across the internet -and a larger percentage of them will get funded when the ground swell of excitement appears from investors looking for innovative companies to invest in. It's imperative that we start raising awareness and  education  to make sure that  entrepreneurs are prepared ahead of time."

Even though Implementation of Crowdfund Investing will not be legal to start until January 2013, time is of the essence. The team at CrowdfundingRoadmap  is proud to offer a one-stop resource center to get started and are urging entrepreneurs to begin preparing for this right away. FundingRoadmap is a one of a kind cloud-based business planning and due diligence reporting software that is an essential tool to this entire process for the issuer, the intermediary and the investor community, who will insist upon this type of transparency and disclosure. In fact they offer the very first and currently the only one of its kind standardized cloud based reporting system available on the market today.

FundingRoadmap is not only suited to crowdfunding, but structures business planning and due diligence reporting to facilitate any type of startup and small business investing or lending.

When the time arrives early next year, becoming SEC compliant and navigating  the due diligence process will not be optional, but a mandatory process for all entrepreneurs looking to equity crowdfund. Funding Roadmap is the only solution on the cloud available to help entrepreneurs meet those compliance requirements in advance.

"This is a monumental time in history for small business and entrepreneurs,” says Hedges, "Now that equity crowdfunding is becoming a reality, we’re fortunate to be the first company to provide this much needed solution -the right place at the right time. We've spent years perfecting our software, worked tirelessly to ensure the highest levels of transparency, disclosure & simplicity in our cloud-based reporting system -and at an unbelievable price.”

“With crowdfunding still in its infancy, it's critical that entrepreneurs know who & where to turn to for answers in this emerging industry. At this time they may not even be aware of the urgency or what will be required by them come early 2013 so the message and solutions needs to start spreading now." said Hedges

Entrepreneurs trying to make sense of what equity crowdfunding is all about can confidently find answers by visiting http://www.crowdfundingroadmap.com , knowing it’s a trusted source, acknowledged & supported by industry leaders and experts who have been heavily involved in setting the stage for this new method from the start. Entrepreneurs looking to raise funds through equity crowdfunding will find the most comprehensive, inexpensive and easy cloud-based tool in Funding Roadmap to help them get started, and which is outlined on the home page at http://crowdfundingroadmap.com. 

These are exciting times but there's also a lot of developments happening in the crowdfunding industry each day which can in some cases lead to confusion. Rather than create even more confusion, CrowdfundingRoadmap makes it  easy for entrepreneurs and Startups to understand the necessary steps that need to be taken now and will continue to provide updates to their cloud based reporting system so everyone using it will instantly be updated as information emerges from the SEC.

About:

Funding Roadmap provides easy and secure multiple choice question prompts that effortlessly walk you through every detail of a plan for your business and the due diligence reporting process applicable for Equity CrowdFunding on the cloud. Includes a video elevator pitch feature and secure document repository, so you can present both a comprehensive profile of your business as well as your personal vision of its future. Share your presentation 24 / 7 in-the-clouds to potential, investors, lenders and partners, and it can even be used to apply for a FEMA/ SBA disaster loan. Keep it current for the everyday guidance of your business and the yearly reporting requirements of the SEC for Equity Crowdfunding and it will save you months of time, money, and frustration while increasing your chances of getting funded faster.

Laughlin Associates specializes in working with start-ups and has assisted over 80,000 companies over its 40 year history. We work hand and hand with our clients to establish their corporate structure and make sure they are set up properly from the start for maximum growth, asset protection and long-term profitability. Laughlin helps you register your Corporation quickly, easily and affordable. Form your corporation today and start raising the money you need to launch your business.

1800Accountant provides a full suite of products and services aimed at helping business owners and entrepreneurs get a leg up on the competition. We have helped tens of thousands of small business owners across the country increase profits, minimize risk and protect their business.We are excited to partner with FundingRoadmap and to help businesses seeking the power of CrowdFund Investing meet and exceed the financial statement and other disclosure requirements so they can achieve their goals. With a dedicated team of Crowd Funding tax experts, catering to clients in all 50 states, our clients have experts at their disposal when needed to keep there business moving forward in the right direction for long term success.

Contact: Ruth E Hedges, CEO, Unismart Capital Software, Inc.
info@fundingroadmap.com
877-780-8955

Get Funded Through CrowdFunding

 Entrepreneurs are about to receive a new and unprecedented funding opportunity—an opportunity that may ultimately determine the success of their business. I’m referring to the method of raising business capital through Crowdfunding.

I want you to be ready to take advantage of this opportunity, and that’s why I’m excited to announce our next webcast on June 12th, 2012. 

Register Today.  Seats Are Limited!

Click this link to register now for
“Get Funded Through Crowdfunding.”

◊ https://navocate.webex.com

When asked ‘How did you hear about this webcast?’ during the registration process, please select ‘Paul Winkle’ in the drop-down menu.

Gov't. Contracts for Technology Companies: Bypass Barriers to Entry

Posted by Paul Winkle on Mon, May 14, 2012 @ 11:54 AM

in

A great way for tech companies to grow organically with their current products and/or service offerings is to procure government contracts. The federal government is the largest contractor in the United States. Landing a government contract, however, is not the same as contracting out your product or service commercially. It is a process that involves considerable up-front work.

There are tactics technology companies can use to break through the barriers to entry and land those contracts. But before we go there, let’s explore some do’s and don’ts when dealing with the government, as described by Matt Hankes in his article “Secret to Winning Federal Contracts” published at www.fedmarket.com.

Matt states, "The game known as federal contracting is fraught with rules and regulations. The game is so complicated that it even has its very own rulebook, the Federal Acquisition Regulation ('FAR')." He goes on to say that "Winning the game is not about following the FAR, though. The winners of government business know the secret is in selling. Yes, selling to those with whom you have created relationships built on trust."

As you can see, relationship building and the sales process is just as important in landing government contracts as it is with commercial ones. You can secure government contracts if your company has products and/or services the government needs AND the ability to build relationships through a skilled and motivated sales department.  The article continues to make this point clear: “Although there are many pitfalls for companies embarking on an adventure in the federal arena, none is more costly or prevalent than the mistake of not adequately focusing on the relationship-building (or sales) process. Selling in the federal marketplace is much simpler in practice than it is in theory. To sell successfully in the federal market, one needs only do three things properly:

1. Establish the customer’s pain point;
2. Create a solution; and
3. Make it easy for the agency to choose you.”
4. 
   

Bypassing the key barrier to entry: past performance

In late 1990’s the federal government codified detailed past performance rules within FAR. Past performance is a significant barrier to entry for companies wanting lucrative government contracts. An article published on http://www.smalltofeds.com/entitled ‘The Small Business Government Contracting “Past Performance” Challenge’ describes it best:

“As a small business begins the proposal submission process to federal government agencies or to prime contractors the past performance challenge is a major challenge. By definition a start-up company in government contracting has no direct government agency past performance projects to site in meeting the requirement in requests for proposals (RFP’s) for historical references to similar projects in terms of size, duration and complexity.”

So how can an established technology company sell their offerings to the federal government?  The article makes one suggestion: “Many small businesses work through prime contractors to "grow" past performance history (subcontracts count). By teaming with a sizable firm a small entity can relate its participation to larger projects and ultimately graduate to a good library of references, carefully maintained and kept as a living, growing data base of good customer service records that can be sited again and again in proposals.”

A better, quicker way:

I will now share a shrewder way to enter the government market.  It can take years for a company to develop past performance status. A great way to eliminate this barrier to entry is to acquire a company which already has a past performance history. The challenge is to locate a target with synergies and a coverage area of expertise in information technologies.

Ideally, you want to acquire a company with a comprehensive understanding of technology and revenue procurement process as well as a proven focus on relationships and sales.

To view a spot-on example of such a company for sale and Navocate's Featured Listings, click here

  

SEC Microcap Fraud-Fighting Initiative Expels 379 Dormant Shell Companies to Protect Investors From Potential Scams

Massive Trading Suspension Is Largest in Agency History

FOR IMMEDIATE RELEASE
2012-91

Washington, D.C., May 14, 2012 — The Securities and Exchange Commission today suspended trading in the securities of 379 dormant companies before they could be hijacked by fraudsters and used to harm investors through reverse mergers or pump-and-dump schemes. The trading suspension marks the most companies ever suspended in a single day by the agency as it ramps up its crackdown against fraud involving microcap shell companies that are dormant and delinquent in their public disclosures.

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Additional Materials

• List of the 379 Companies
• Trading Suspension Order
• Investor Bulletin: Trading Suspensions

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Microcap companies typically have limited assets and low-priced stock that trades in low volumes. An initiative tabbed Operation Shell-Expel by the SEC's Microcap Fraud Working Group utilized various agency resources including the enhanced intelligence technology of the Enforcement Division's Office of Market Intelligence to scrutinize microcap stocks in the markets nationwide and identify clearly dormant shell companies in 32 states and six foreign countries that were ripe for potential fraud.

"Empty shell companies are to stock manipulators and pump-and-dump schemers what guns are to bank robbers — the tools by which they ply their illegal trade," said Robert Khuzami, Director of the SEC's Division of Enforcement. "This massive trading suspension unmasks these empty shell companies and deprives unscrupulous scam artists of the opportunity to profit at the expense of unsuspecting retail investors."

Thomas Sporkin, Director of the SEC's Office of Market Intelligence, added, "It's critical to assess risks to investors in the capital markets and, through strategic planning, develop ways to neutralize them. We were able to conduct a detailed review of the microcap issuers quoted in the over-the-counter market and cull out these high-risk shell companies."

The SEC's previously largest trading suspension was an order in September 2005 that involved 39 companies. The federal securities laws allow the SEC to suspend trading in any stock for up to 10 business days. Subject to certain exceptions and exemptions, once a company is suspended from trading, it cannot be quoted again until it provides updated information including accurate financial statements.

Pump-and-dump schemes are among the most common types of fraud involving microcap companies. Perpetrators will tout a thinly-traded microcap stock through false and misleading statements about the company to the marketplace. After purchasing low and pumping the stock price higher by creating the appearance of market activity, they dump the stock to make huge profits by selling it into the market at the higher price.

The existence of empty shell companies can be a financial boon to stock manipulators who will pay as much as $750,000 to assume control of the company in order to pump and dump the stock for illegal proceeds to the detriment of investors. But with this trading suspension's obligation to provide updated financial information, these shell companies have been rendered essentially worthless and useless to scam artists.

"This mass trading suspension is an effective and novel way for the SEC to neutralize potential threats to investors," said Chris Ehrman, Co-National Coordinator of the SEC's Microcap Fraud Working Group. "With the ability to leverage staff expertise throughout the agency's offices and divisions, the Working Group is uniquely positioned to take on risk-based matters like these and focus resources where they are needed most."

This SEC enforcement effort has been led by Mr. Ehrman, Robert Bernstein, Jessica P. Regan, Leigh Barrett, and Megan Alcorn in the Office of Market Intelligence along with Microcap Fraud Working Group staff from each of the SEC's regional offices: Tanya Beard, David Berman, Sharon Binger, Melissa Buckhalter-Honore, Lisa Cuifolo, Tracy Davis, Elisha Frank, Kurt Gottschall, Lucy Graetz, Jennifer Hieb, C.J. Kerstetter, Victoria Levin, Aaron Lipson, Michael Paley, Farolito Parco, Jonathan Scott, and Lauchlan Wash.

The SEC appreciates the assistance and cooperation of the Federal Bureau of Investigation's Economic Crimes Unit.

SEC Issues FAQ On Crowdfunding Intermediaries

A special thanks to Ruth Hedges of Crowdfundingroadmap.com for bringing this to our attention

Jumpstart Our Business Startups Act
Frequently Asked Questions About Crowdfunding Intermediaries

Division of Trading and Markets

May 7, 2012

In these Frequently Asked Questions (FAQs), the Division of Trading and Markets is providing guidance on the implementation of the crowdfunding intermediary provisions of the Jumpstart Our Business Startups Act (JOBS Act). These FAQs are not rules, regulations or statements of the SEC. The SEC has neither approved nor disapproved these FAQs.

The Division may update these questions and answers periodically. In each update, the questions added after publication of the last version will be marked with “MODIFIED” or “NEW.” In addition, the SEC is soliciting public comments on regulatory initiatives under the JOBS Act.

Background

These FAQs address questions about the crowdfunding intermediary provisions in Title III of the JOBS Act.

Click here for the Responses to Frequently Asked Questions

 

10 Tweets That Are Invaluable Startup Advice

By Alyson Shontell, as seen on Business Insider

 

Turtable Co-founder

Turntable.fm's Seth Goldstein took the stage at Big Omaha yesterday.

He gave entrepreneurs advice in the form of 10 tweets, i.e. 140 characters or less.

Here's what he's learned from over 20 years in the tech industry, as both an investor and an entrepreneur:

1. Anything worth doing is worth doing badly. If you think there's a market for something, go for it even if you feel under-prepared. Don't wait until the right moment.
2. Leaders believe it before they see it, managers need to see it to believe it. Leaders are the people with the visions. Managers have a place too; they help leaders execute and prioritize.
3. Dress British, think Yiddish. Look conventional, think unconventionally. Startups need to have a good brand, says Goldstein.
4. Scale a single, social gesture. Find one thing people enjoy doing and hammer away at that. It worked well for Instagram.
5. Hire slow, fire fast. Don't hire just to fill a hole in your team -- Goldstein calls this hiring while wearing beer goggles. B players bring A players down to their level, and B players never reach A level.
6. Have difficult conversations. Don't wait for the other person to bring something important up.
7. What is going up and to the right? Chances are you're doing something right. Even if users aren't growing, there might be another positive metric to focus on. Really examine whatever is working and highlight it.
8. Raise money when you can, not when you have to. Goldstein says the #1 reason startups fail is because they run out of money.
9. It's hard to bring an investor in, it's 10X harder to get them out. Think of it like a marriage to someone who's impossible to divorce. An investor won't be writing a check then walking away, so pick carefully.
10. It's not about the money, it's about the money. "We are being fattened like cows by our venture capitalists for the big exit," says Goldstein. Don't be too proud to sell; billion-dollar exits are rare.

Crowdfunding Prep Guide for Businesses: Survey Question at end.

Posted by Paul Winkle 

inIf you own a business (start-up, early stage or established) and want to capitalize it using the newly passed Crowdfunding Exemption, you will find the following information vital.

There are 8 months before the SEC is required to issue final rules for the protection of investors and to carry out the terms of the Act as it pertains to Title III – Crowdfunding.  Before businesses (issuers) can raise any funds, they are required by the Act to disclose and report a laundry list of information about their companies to a registered Crowdfund Investing Portal (CIP).  There are preparations and positioning strategies an issuer can implement now to ensure a successful raise, grow their business and create jobs. 

Here is an outline of action items you, the owner, need to be thinking of.  This is presented as a motivational guide and act as a tool for further research. 

 Corporate housekeeping and governance

The level of preparation needed here will depend on the stage of development your company is at (start-up, early stage or established). First of all, your company must be incorporated to offer equity shares.  This means researching the rules and procedures of the state you plan on incorporating in.  Consulting an attorney or accountant experienced in this area is advisable.

You should establish a management team capable of handling daily business operations and the financial and regulatory reporting requirements.  Having an Advisory Board of trusted and experienced mentors is suggested. In general, you are setting up a system of rules to follow while running your company.

Business plan and financials

Have a business plan.  All of the information you are required to file with the SEC and report to the CIP will be contained in your business plan.  This includes a description of your business, names of officers and directors, a description of the financial condition of the company, the stated purpose of use of proceeds, ownership and capital structure, the target amount to be raised and the deadline for reaching that target.  The business plan should include an elevator pitch, executive summary, due diligence documentation, financial statements and pro forms.

Utilizing cloud based electronic business plan and due diligence reporting systems that provide complete transparency as required by the Crowdfunding Exemption is preferred.  Your business plan will need to evolve as your company does.  Using a cloud based service will allow you to easily make updates as your company morphs and keep up with reporting requirements.  If you do not have the time or expertise to write a business plan, hire someone. 

Issuers are also required to produce financial statements.  The amount of the offering will determine the level of review required.  For example, companies raising under $100k are required to disclose their most recent tax return and financial statements (certified to be true and complete by the principle executive officer).  If an issuer is raising more than $500k, audited financials are required.

Valuation Model

As an issuer, you are required to provide the commission and investors via the CIP, the share price of securities being offered or the method for determining the price.  Issuers must also state how the securities being offered are being valued, and must give examples of methods for how the securities may be valued in the future.

This is an area that the issuer should seriously consider seeking professional guidance.  Look for help from qualified specialists trained at assembling valuation models.  They will draw information from   documents provided in the business plan, financials and pro forms.

In Closing

I have only mentioned some of the requirements necessary to be compliant with the reporting requirements of the Crowdfunding Exemption.   Additionally, the SEC will most likely add to those requirements in order to protect the investor (they have been granted latitude to do so).

Issuers that begin positioning their companies now will have the best chance of getting crowdfunded next year.

Survey Question

As a business owner wanting to prepare your company to raise money via crowdfunding and after researching the costs of services mentioned in the above article, what would you reasonably expect to pay for the collective, bundled services listed below?

• Incorporation services.
• Cloud based business plan, due diligence and financial reporting services
• Business plan writing services.
• Valuation services.

Navocate provides Business Sales and Acquisitions services for Emerging Companies with revenues from $3M - $30M. Specifically, Navocate focuses on the market segment above business brokers, and below investment banks. For more information please visit www.navocate.com

Big News Developments in JOBS Act Funding Platform

EarlyShares.com, a crowdfunding platform whose mission is to fund early-stage and entrepreneurial companies under the recently passed JOBS Act, is pleased to announce the signing of a strategic alliance agreement with Navocate Business Sales + Acquisitions. Navocate will serve as EarlyShares.com’s official provider for merger & acquisition intermediary services to all EarlyShares.com crowdfunded companies. EarlyShares.com will serve as Navocate’s official crowdfunding platform for its early-stage companies.

EarlyShares.com is quickly becoming the industry standard “go to” crowdfunding portal. Once the SEC finalizes its rulemaking, EarlyShares.com will raise capital from small investors to fund entrepreneurial companies. Under the Act, crowdfunded companies can raise up to $1,000,000 from investors through funding portals such as EarlyShares.com. Additionally companies will no longer be limited to the 500-shareholder rule, or any other State shareholder count limit, as the Federal Jobs Act pre-empts State law. The new limit is 2,000 shareholders. Under the new JOBS Act signed by President Obama on April 5th 2012, investors with annual incomes of less than $100k will be limited to $2,000 investments, while those who make over $100k annually will be limited to $10,000.

Navocate will provide M&A services to EarlyShares.com portfolio companies that mature to be sold as a corporate acquisition or to partner with private equity. “EarlyShares.com targets and validates companies that can provide our crowdfunding investors a good return on investment within three years of the funding date,” said Maurice Lopes, CEO of EarlyShares.com. “Partnering with Navocate provides our later-stage portfolio companies with a relatively easy and convenient transition path for acquisition by larger companies, or to partner with private equity for continued growth.”

Karl F. Buhl, managing member of Navocate, said, “We are pleased to be selected as the official M&A service provider for all EarlyShares.com portfolio companies. Navocate will be there to successfully transition EarlyShares.com’s emerging companies by providing M&A intermediary services for corporate acquisitions, or by matching emerging companies with a private equity partner.”

About EarlyShares.com

EarlyShares.com, founded in 2011, is an equity-based crowdfunding platform (Funding Portal) which provides early-stage companies and investors a secure, easy to use platform for raising and investing capital. EarlyShares.com has corporate offices in Miami, FL. Contact: Maurice Lopes, CEO. PR(at)EarlyShares(dot)com http://www.EarlyShares.com

About Navocate Business Sales + Acquisitions

EarlyShares.com, founded in 2011, is an equity-based crowdfunding platform (Funding Portal) which provides early-stage companies and investors a secure, easy to use platform for raising and investing capital. EarlyShares.com has corporate offices in Miami, FL. Contact: Maurice Lopes, CEO. PR(at)EarlyShares(dot)com http://www.EarlyShares.com

About Navocate Business Sales + Acquisitions

Navocate provides business sales and acquisitions services for emerging companies with revenues between $3M and $30M. Headquartered in Tampa, Florida, Navocate focuses on the under-served M&A segment above business brokers, and below investment banks. Contact: Paul Winkle. paul@navocate.com http://www.navocate.com

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EarlyShares.com
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