6. 10 Requirements JOBS Act
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Registration & Incorporation in US
Names – Directors, Officers, >20% SH
Business Description & BUSINESS PLAN
Prior years Tax Returns
Financial Statements
Use of Proceeds
Offering Details & Progress Updates
Share price & methodology (VALUATION)
Ownership & capital
Capital (existing, offering & differences)
7. Rules – FORM C Disclosure
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Registration & Incorporation in US
Names – Directors, Officers, >20% SH
Business Description ONLY
Prior years Tax Returns
Financial Statements ONGOING & ANNUAL
REPORTS
Use of Proceeds
Offering Details & Progress Updates
Share price & methodology (VALUATION)
Ownership & capital
Capital (existing, offering & differences)
8. GAAP Financial Statements
< $100K – CEO
$100K to < $500K Review
$500K = AUDIT by non-PCAOB but licensed
Certified Professional Accountant (CPA) Firm
Not the same CPA as preparations!
9. EQUITY is not Easy
Tough requirements include:
Business Plans
Financial Statements
Use of Proceeds
Valuation
10. $
Devil in the Details
$XM Valuation/ $X per share price/ Total $XK
Spend:
$XK Now
$XK Next
$XK Then
MAKE
$XK
$XK
$XK
SELL
$YK
$YK
$YK
OPERATE
$ZK
$ZK
$ZK
Microventures, CircleupSoMoLend is debtAngel List – accredited investors
Chaos – examples of errors
Chaos – examples of errors
Registration & Incorporation in the U.S.Name, legal status, address, website, etc.2. Names of directors, officers, and 20%stockholders3. A description of the business and theanticipated business plan of the issuer4. Prior year tax returns5. Financial statements6. Description of intended use of raisedcapital & proceeds7. Target offering amount, deadline, andregular progress updates through the lifeof the offering8. Share price and methodology fordetermining the price9. Description of the ownership and capitalstructure of the issuer, including a lot ofdetail about the terms of the securitiesbeing sold10. Terms of any other outstanding securitiesof the company, including a summary
Microventures, CircleupSoMoLend is debtAngel List – accredited investors
Not all the requirements but not to be done over night.
When it comes to reward-based crowdfunding, while these don’t establish an equity price which can be considered a direct comparable, they serve a very important role in market validation of the execution and scalability of the business model. Price points, customer traction, sales funnel, order fulfillment, and other critical information can be gleaned from a rewards-based campaign and incorporated in the next iteration of the product, or serve as validation of key business model assumptions.Since many valuations of pre-revenue startups rely on key performance indicators (KPI) and not on financial fundamentals, KPI validation is critical in building investor confidence and can indirectly impact valuations and funding(ESOP) where stock options are issued to early employees and investors with very low exercise prices, which are set to equal the price of common stock at the time the options are issued. The equity prices flowing through crowdfunding platforms will create a new set of early stage valuation comparables, data that have largely been missing from the public eye before. This can potentially have huge implications on the pricing of ESOP plans, particularly in the early stages.Read more at http://venturebeat.com/2013/10/08/crowdfunding-101-dont-forget-to-protect-your-idea/#SYYEMlRC8xvTg4s5.99Read more at http://venturebeat.com/2013/10/08/crowdfunding-101-dont-forget-to-protect-your-idea/#SYYEMlRC8xvTg4s5.99When it comes to reward-based crowdfunding, while these don’t establish an equity price which can be considered a direct comparable, they serve a very important role in market validation of the execution and scalability of the business model. Price points, customer traction, sales funnel, order fulfillment, and other critical information can be gleaned from a rewards-based campaign and incorporated in the next iteration of the product, or serve as validation of key business model assumptions.Since many valuations of pre-revenue startups rely on key performance indicators (KPI) and not on financial fundamentals, KPI validation is critical in building investor confidence and can indirectly impact valuations and funding.Read more at http://venturebeat.com/2013/10/08/crowdfunding-101-dont-forget-to-protect-your-idea/#SYYEMlRC8xvTg4s5.99
Pebble Watch campaign was an outlier
DNA Zoo Tees. Funding used to fulfill orders and “ramp up production” Infringed on songs.
