Since September 2013 start-ups and other companies have been able to solicit the public for debt and equity financing using exempt or private offerings. This is the first time in 80 years the SEC has permitted general solicitation of “private” placements. As a result, an entire new industry, with a new asset class, has come into being.
But how to find serious investors in this gold rush? There are over 350 crowdfunding portals or web sites and hundreds more peer-to-peer web sites where investors can be found. So what does the entrepreneur say to whom? How much detail does he or she communicate on which platforms?
How much information should be in the pitch book or elevator video? And on what platforms?
Rule 506 Metrics, the media group affiliated with Private Placement Advisors LLC (PPA), identifies which crowdfunding sites and which peer-to-peer sites are the most likely forums to raise seed capital for specific types of start-ups or business expansions. For example, Rule 506 Metrics has developed relationships with commercial real estate peer-to-peer portals and real estate crowdfunding web sites. So we know how much time to spend on which sites for which deals
Rule 506 Metrics publishes video courses on a variety of topics of interest to start-ups and investors. Private Placement Advisors publishes a 30-second elevator video for each offering we sponsor.
The Other Problem
Once you have an interested accredited investor, what is your story and how is it presented? Once you get in the front door, what do you say?
The solution to this problem is largely in your hands. PPA finds solutions for entrepreneurs seeking equity or debt financing under Titles II, III, and IV of the JOBS Act. We do what we can to introduce you to prospective investors. The rest is up to you.
Thereafter, if appropriate and if you wish, we draft disclosure documents and file them with Federal and state regulators. We establish that the issuer and its principals are not disqualified under Bad Actor provisions. We provide "factual inquiries" into whether any disqualification event exists, demonstrating SEC-required "exercise of reasonable care." We provide accredited-investor verification services required by Title II of the JOBS Act. We assist intermediaries and issuers to educate potential investors