We are on the cusp of a revolution in the way capital is raised, and the programmers at SXSW are taking notice. Crowdfunding is coming out of the basement and into the boardroom and will have a profound impact around the globe.
The passage of the 2012 JOBS Act broke down barriers and opened doors for small businesses of all types to raise capital by allowing business to openly solicit for financing from their communities and the public. Before this revolution began, the capital raising process was a long and difficult one – an entrepreneur gets a loan or invests private capital, does a friends-and-family round, seeks out venture capitalists. Even after all of that, 50 to 70 percent of startups fail within the first 18 months, primarily due to lack of access to capital, and if you do stay in business, you eventually do a very expensive and time-consuming public offering. It’s a tough route, as many of the entrepreneurs at SXSW can tell you!
The introduction of equity crowdfunding not only allows entrepreneurs and growing companies to directly target investors, from their neighbor to angel investors, it also opens the earning pipeline for more investors. Suddenly, deals that weren’t previously available to the average person, or unaccredited investor, are more visible, and more businesses thrive as a result.
Several events at SXSW Interactive 2014 will highlight what these changes mean for companies and investors alike.
The *Real* Crowdfund Investment Panel at SXSW
What: “The *Real* Crowdfund Investment” will feature OfferBoard CEO Chris Tyrrell and OfferBoard CMO Jessica Randazza.
Where: SXSW Interactive, Hilton Austin Hotel, Room 616AB, Austin, Texas
When: Friday, March 7, 12:30-1:30 p.m.
Chris Tyrrell is the CEO and a founding member of OfferBoard, a soon-to-launch investment platform that leverages the technology of the Australian Small Scale Offerings Board (ASSOB), the world’s oldest small equities funding platform, to help companies raise capital through Regulation D securities offerings. Chris is also Chairman of CrowdFund Intermediary Regulatory Advocates (CFIRA), the leading advocacy organization for the securities crowdfunding industry and a board member of ASSOB.
Jessica Randazza is chief marketing officer and a founding member of OfferBoard. Before joining OfferBoard, Jessica served as Vice President & partner for Interference Inc. and The Supertouch Group. Focusing on driving social communication, and developing interactive marketing with technology outputs, each unique experience Jessica crafts is built with the promise of creating digital buzz and scaling through word-of-mouth. Prior to Interference + Supertouch, Jessica helped lead the founding of the social communications team at Digitas in New York. Her work has included brands such as Showtime, Whirlpool, Kraft, Diageo, American Express, Gawker, Nestlé, and Old Navy.
Why?: With the anticipated Title III new regulations of the Jumpstart Our Business Startups (JOBS) Act, which will allow for crowd funding on equities investments by accredited and unaccredited investors. Anticipated regulations will create a new asset class of investors with financial contributions making investments in businesses seeking new growth and ROI. This panel will help attendees understand:
- The differences between Title II, III, and IV
- What can business owners do now?
- What does it mean for folks wanting to invest?
- What is equity crowdfunding solving?
- Who are good candidates for equity?
Startup Debut Media Event
What: The Official Media Showcase of SXSW Interactive 2014; a meet-and-great featuring startups and market innovators displaying their new products in a boutique environment.
Where: Fleming’s Steakhouse, E. 2nd Street, Austin – across the street from the convention center
When: Sunday, March 9, 6-10 p.m.
Who: A variety of startups, including crowdfunding companies:
EquityNet is used by thousands of entrepreneurs, investors, government entities and business incubators to plan, analyze, and capitalize privately-held businesses. Founded in 2005, EquityNet features profiles of over 600 investors and investment groups providing access to 20,000+ individual investors and has helped entrepreneurs across North America raise over $217 million in capital. The platform is designed to make the funding process more efficient for entrepreneurs and the investment decision process more effective for investors by combining novel analytics, business benchmarking and standardization to achieve a superior experience for investors and a higher funding success rate for entrepreneurs.
Givelocity is a community for shared giving. Members pool pledges and vote on where collective donations are sent every month. Givelocity is a unique online platform designed to harness the power of crowdsourcing, allowing individuals and businesses to create theme-based communities, or neighborhoods, for shared impact. The site offers enterprise tools to engage employees and build a culture of giving back. The platform fosters a sense of community, reinforcing social and economic equality, with the advantage of offering anonymity and better mapping of credible, accountable charities. With more scalable and sustainable donating, Givelocity is changing the way people give back.
OfferBoard is an online private placement platform for middle market and emerging growth companies that leverages the experience and technology of the Australian Small Scale Offerings Board (ASSOB) — the world’s oldest securities platform. Helmed by financial industry veterans, OfferBoard allows investors to tap into the estimated $900 billion primary private placement market and support the growth of middle market, the backbone of the U.S. economy and the future of the global economy. OfferBoard securities offered through Finance 500, Inc., member FINRA/SIPC.
The CrowdBuilder platform was developed by seasoned public relations professionals to help reporters find expert sources and help businesses build their crowd. Whether launching a crowdfunding campaign or trying to raise awareness of your startup, CrowdBuilder can help entrepreneurs get news coverage, build their social media presence and grow their brand at a price they can afford.
Why?: Get the chance to see some of the newest products and hear about emerging market companies from entrepreneurs. And, free drinks and food, of course. It is SXSW, after all.
The New Era of Investor Relations Panel at SXSW
What: “The New Era of Investor Relations” will feature veteran securities attorney Doug Ellenoff, Leverage PR Principal Joy Schoffler, EquityNet CEO Judd Hollas, and author and start-up consultant Judy Robinett.
Where: SXSW Interactive, Hilton Austin Hotel, Salon JK, Austin, Texas
When: Monday, March 10, 11 a.m.-Noon
Judd Hollas is a pioneer in the field of crowdfunding with multiple patents granted for web-based capital marketplace systems. As founder and CEO of EquityNet, he leads the company’s efforts to create and introduce innovative new products and services and is responsible for its strategic direction and fiscal and professional integrity. Prior to founding EquityNet in 2005, Judd served as division manager for Beta-Rubicon, Inc., a consulting firm specializing in technology assessment and business due diligence services, where he researched methods of conventional due diligence, causes of private enterprise failure and methods for risk prediction. Judd has 20 years of experience as an independent technology analyst and investment manager in the private and public domains. He has personally invested in more than 30 emerging technology companies in a wide range of industry sectors, including various software sectors, semiconductors, biometrics, networking, wireless communications, and conventional and alternative energy.
Joy Schoffler is the founder of Leverage PR, a publicity firm for companies in the financial, legal and real estate industries. A leader in the crowdfunding industry, Joy has been invited to events hosted by the White House and Congress, has attended working sessions at the SEC and serves on the boards of the Crowdfunding Professional Assn, the Crowdfund Intermediary Regulatory Advocates, and CF50, a think tank for the global crowdfunding ecosystem. Joy is a contributing author for the upcoming DealFlow Media, Wiley-published book, “Crowdfunding: The Definitive Guide to Raising Capital on the Internet.” Joy also founded CrowdBuilder, a SAAS-based publicity platform for growth-phase companies. Prior to launching Leverage PR, Joy worked in the private equity world where she helped early-stage companies raise more than $20 million, make the Inc. 500 list, and secure Fortune 500 accounts.
Doug Ellenoff is a partner at Ellenoff Grossman & Schole LLP. Mr. Ellenoff is a corporate and securities attorney with a specialty in business transactions and corporate financing. The firm is involved in various capital market initiatives, such as, crowdfunding (CrowdESQ.com), SPACs, PIPEs and Registered Direct offerings. He represents many venture capital investor groups and corporations involved in the capital formation process and provides counsel with regard to their respective ongoing regulatory compliance. Doug also has extensive experience in private placements, corporate restructurings, mergers and acquisitions concerning both public and private companies.
Judy Robinett served as the CEO and president of a publicly-traded biotech company for eight years. She now works with early stage companies developing their company and funding strategies. Her experience ranges from management positions in large organizations, to serving Board of Directors, to authoring state legislation, and participating on the team defining performance criteria for the Malcolm Baldrige Award for Medical Excellence, for which she received an award from President Bill Clinton. With her powerful network of senior executives, funding sources, and content experts she helps companies identify the things that are often causing them to stall and brings together the various resources needed to put them on the right track for success. Whether their needs are a workable funding strategy, a focused company strategy, or technology resources, Ms. Robinett either fills the needs herself or calls on her team of internationally renowned experts to get the job done. Ms. Robinett has given 300+ speeches worldwide on funding strategies, licensing, business ethics, transparency, board responsibilities, leadership (MIT, BIO-EU, Cal-Poly, AT&T, Westinghouse, and the Department of Energy).
Why?: In 2013, the ban on general solicitation of accredited investors was lifted, causing the largest change to securities laws in decades. While everyone from startups to hedge funds will enjoy new liberties in investor marketing and outreach campaigns, it’s critical that the new rules are followed to a T, eliminating the chance for exemption rescission. Panelists will provide attendees communications and investor relations guidance and clear explanations of how to stay compliant in this new era of investor relations.