Crowd Equity vs. Crowd Funding

Crowd Equity

vs. Crowd Funding

I make a distinction because not all crowd funding will fall under crowd investing. People are already confused about what is happening. Over the next 12 months, you will see huge changes in how websites handle both.

Crowd Equity sites will offer shares of a business for sale. These sites will over see the process. A business owner will not be able to do this alone on his own. These sites are called third party intermediaries.  If you make less than $100,000 you can only invest 5% of your income. Obama called on the Treasury Department, Small Business Association and Justice Department to monitor the new legislation closely and report regularly on their finding

Here are the basic rules

• The law allows an entrepreneur or small business to raise up to $1 million per year through an SEC-registered crowd funding intermediary. The House bill did not require an intermediary and would have allowed people to raise money via Facebook and other social media websites.
• Intermediaries seeking to help companies raise money through crowd funding must register with the SEC, make sure investors are advised of the risks they are taking, and take measures to prevent fraud.
• Individuals with an income of less than $100,000 per year are allowed to invest the greater of $2,000 or five percent of their income.
• Individuals with an income of more than $100,000 can invest up to ten percent of income, with a cap of $100,000.
• Companies that use crowd funding must provide financial statements to investors. Companies seeking to raise $100,000 or less would have to provide tax returns and a financial statement certified by a company principal.
• Companies seeking between $100,000 and $500,000 in capital would have to get independent accountants to review these statements.
• Audited financial statements would be required for companies seeking more than $500,000 in capital.
• Companies can avoid registering with the SEC until they have 2,000 shareholders, up from 500 currently.

Would you like to get a consult on your crowd funding project? Call 909 626 3835

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Crowd Fund to Save the Earth

GreenUnite was launched for a niche it hopes can become a platform for anyone with great ideas and eco-friendly projects to get funding and make them a reality. You won’t find any fancy new iPad cases on this site, but you will find wearable recyclables. Every project saves the earth. GreenUnite describes itself  a revolutionary crowdfunding and educational platform focused on helping to launch important products, technology and content dedicated to creating a more sustainable world.

They connect passionate individuals and organizations with green supporters devoted to making a difference in the world. They are creating a community that thrives on connections and interconnections that spark meaningful change to educate others on the effects of climate change. They also offer the option of donating portion of the funds raised to green U.S.-based charities that are personally selected by the project’s creator.

Got a green project? This might be a place for it.

Want to learn more? Click Here for some no cost events!

Book Project Cracks $1 Million Dollars By Crowd Funding

The third project get over $1 million dollars in financial support is also the first book to do so. Rich Burlew wanted to

raise $57,500 to reprint an out of print book from his “Order of the Stick” webcomic. He was able to get that amount in only 2 days. The money continued to come up so that the final amount was $1,254,120.00

Crowd Funding has been likened to the PBS or NPR drives for money for a project. These supporters get premium gifts for the amounts of money that they give. Each crowd funding site is different and has different rules. As the money came in, Burlew added to the rewards, in the end there were 64 different rewards. He was able to make adjustments to the campaign as it grew. When one goal was met, he set a new goal.  Almost 15,000 people gave and over 25,000 books were sold. He fan base drove this campaign over the top. He used that leverage to reach out to additional audiences as the amounts of money came in

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• Crowd Funding a Dance TV Show (wrightplacetv.com)

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