Category Archives: Technology

Federal Reserve Bank of Dallas, Houston Branch and ThinkCrowdFund.com to Host Equity Crowdfunding Town Hall in Houston

CrowdPay

Small business forum created to connect issuers and non-accredited investors with expert state securities officials and crowdfunding platforms.

Equity Crowdfunding Town HallAs the wait continues for the SEC to finalize Title III crowdfunding rules, several states have moved forward with the passage of intrastate crowdfunding exemptions. Texas was the thirteenth state to pass its intrastate crowdfunding rules in 2014.

Texas-based crowdfunding consulting, technology and transparency agency, ThinkCrowdFund.com, is the first in Texas to create a small business forum allowing entrepreneurs and non-accredited investors to connect with equity crowdfunding portal developers and state securities experts. The Think First Equity Crowdfunding Town Hall event is coming to Houston, Texas on March 25, 2015 and will be hosted by the Federal Reserve Bank of Dallas, Houston Branch and ThinkCrowdFund.com.

ThinkCrowdFund.com has partnered with newly approved Texas-based equity crowdfunding portals MassVenture and TruCrowd.com to offer expert advice to issuers looking to raise capital utilizing the new intrastate crowdfunding rules passed unanimously by the Texas State Securities Board in November 2014. Management consultant and small business development expert Cynthia Nevels is the Founder of ThinkCrowdFund.com.

“We believe in order for intrastate crowdfunding to work in Texas, we must educate the crowd and bring all stakeholders together to understand the rules of the game,” Nevels said.

More than $400 million has been committed through equity crowdfunding since Title II of the JOBS Act was approved on September 23, 2013, through the end of 2014, according to Crowdnetic, which aggregates data from nearly 20 equity crowdfunding platforms.

Texas State Securities Board Commissioner John Morgan, whose agency enacted the rules, recently predicted that Texas will become a leader in equity crowdfunding investment and growth. The new crowdfunding rules allow Texas-based entrepreneurs to raise up to $1 million per year. Offerings must be carried out through a registered broker-dealer or state-approved portal like MassVenture, TruCrowd, NextSeed or CrudeFunders. Texas-based non-accredited investors may contribute up to $5,000 per offering, with no individual limits for accredited investors.

The Think First Equity Crowdfunding Town Hall in Houston will host panelists from the Texas State Securities Board, two of the five approved equity crowdfunding portals, banks, Federal Reserve Bank of Dallas, Houston Branch and the U. S. Small Business Administration. The event is designed to help issuers and investors present their questions to the experts to ensure entrepreneurs and non-accredited investors understand what is needed to comply with the state’s rules and to safely raise funds.

“Some industry leaders believe the crowd will regulate the market and will prevent bad apples from committing fraudulent acts against non-accredited investors, however we believe education and full transparency are the keys to ensuring we create a safe crowd and a vibrant economic development eco-system,” Nevels said.

Equity crowdfunding online could help local small business owners who do not have the initial seed capital or ability to obtain a loan from their local bank or credit union. The portals will link issuers to investors and create a source to take their idea, prototype or business to the next stage. Microlenders and some banks see crowdfunding as a first round option for innovators looking to prove their product or business has an audience and can raise the capital it needs to potentially leverage for a second round of funding.

The next town hall will be held on Wednesday, March 25, 2015 at the Federal Reserve Bank of Dallas, Houston Branch at 1801 Allen Parkway, Houston, Texas 77019 from 9:30 a.m. – 11:30 a.m. The event is open to the public. Pre-registration on Thinkcrowdfund.com and a state ID are required.

For more details, please visit http://www.thinkcrowdfund.com.

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Texas Intrastate Crowdfunding Rules

Texas to Pass Equity Crowdfunding Rules

By Cynthia Nevels | Senior Editor for Disruptive View

Texas is expected to pass its own rules as it relates to online equity #crowdfunding.

Who’s in charge here?

The Texas State Securities Board regulates the securities industry in Texas. The SSB registers all securities, securities dealers, agents, salesmen and investment advisers in the State of Texas. The SSB offers consumer education for investors on its website and accepts complaints about offers and sales of securities and about securities dealers and investment advisers.

The federal Securities and Exchange Commission (SEC) protects investors by enforcing the federal Securities Act. The SEC website, like that of the SSB, offers a wealth of information for investors and also accepts complaints.

What does intra-state equity Crowdfunding mean?

Section 3(a)(11) of the 33 Act exempts from registration any security that is part of an offering sold only to persons residing within a single state if the company is also doing business in that state. So, as long as a company complies with the federal intrastate exemption, it only needs to be concerned with the state’s crowdfunding rules when conducting a crowdfunding offering; it won’t also have to comply with the federal crowdfunding law.

What does this mean to local small to midsize businesses?

Texas-based businesses now have more options to raise capital. This alternative may lead to new innovations, more jobs and stronger companies that will boost the local economy. Well, at least that’s the hope. Businesses in the oil and gas, real estate, technology, art and entertainment, agriculture, food and hospitality industries may see an uptick in investment through online equity crowdfunding activities. This may be true for those business executives who are savvy enough to recognize the opportunity, create a strategy and execute said strategy. Be sure you are ready to take on the responsibility of managing investors, communicating with investors in a timely fashion, and complying with state and potentially federal requirements.

What should non-accredited investors know before investing in local companies in exchange for equity?

For blue collar “Joe” who happened to have read an article about equity crowdfunding and decided investing in a local business sounds like a good idea, my advice to you is to conduct your own due diligence and research the company’a mission, products and services, marketing strategy, financials and the background of the organizers. If you aren’t sure where to start, call the Texas State Securities Board, your local financial planner that specializes in equity crowdfunding, a crowdfunding attorney, utilize a transparency agency or read posts shared by the crowd – albeit what someone says on a crowdfunding or social media feed should not be your final check before forking over your hard earned money.

Is Texas the first?

No, Texas as is now the 13th state to create its own equity crowdfunding rules and by-pass the JOBS Act. The U. S. SEC has not released or finalized the federal rules and some states see the billion dollar opportunity equity crowdfunding presents and they have decided to take the bull by the horn and jumpstart small business and economic development in their state.

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special guest Kate Knight, Director of The GroundFloor