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Equity CrowdFunding Opens Up a New Frontier in Raising Capital

May 24, 2016

Raise money directly from customers to create evangelists and diversify your sources of capital.

  • Raise money from 230 million American adults thanks to new regulations.
  • Access the most diverse pools of capital ever available.
  • Create evangelists while maintaining control of your business.

What is Equity Crowdfunding?

In 2012, Congress passed the Jumpstart Our Business Startup (JOBS) Act, which changed the startup investing game by allowing companies to sell private stock to the general public.

The new law allowed startups to solicit investments publicly from “accredited investors,” or people who make over $200,000 annually ($300,000 for married couples) or have a net worth over $1 million. It sparked the beginning of a golden era in private investing.

In 2015, venture capitalists deployed $58.8 billion in the private market, the second biggest year in two decades, and the biggest year in venture capital since the dot-com bubble burst in 2000.

The flood of venture capital may not last forever, and venture capital may not be the best option for every startup. So in 2015, the SEC finalized rules to expand investor access to the private capital markets.

Title III of the JOBS Act, also known as Reg CF, opened a new frontier in investing. Reg CF lets startups raise capital from the most diverse source yet - 230 million American adults.

Creating Evangelists While Keeping Control

When you raise capital, you don’t need to cater to investors seeking the fastest possible returns. You can sell shares of your company to people who are as passionate about your business as you are.

Reg CF allows you to market your company directly to your customer, effectively eliminating the middleman. That customer-become-investor can become an evangelist for your company and in turn positively impact your growth.

At the same time, you’ll maintain greater control of your business, and have an active community of shareholders helping to validate your idea from the onset. After your round closes, our SEC-registered transfer agent, FlashFunders Investors Services, helps keep your cap table clean and organized.

FlashFunders Shareholder Services, LLC manages your shareholders in book entry format online, so that those investing under $20,000 don’t count against your 2,000 shareholder limit. We also help to manage inbound investor inquiries, and disseminate your annual financial reports on your behalf.

Although Reg CF investors purchase shares at the same price as accredited investors, only investors who invest over $20K in your company receive significant shareholder rights, such as voting rights or the right to maintain proportionate ownership in future funding rounds.

Some individuals have raised concerns about the impact of fundraising via Reg CF and how it affects institutional investors’ perception later in a company’s life cycle. FlashFunders is unique, because our platform helps companies raise capital from everyone - crowd, accredited, and international investors - in a single round.

FlashFunders streamlined the early stage fundraising process to save startups time and money. You can Learn More about how we handle the red tape, and set you up for successful future capital raises. If you're ready to get your funding round started, apply below and let our team guide you through the process.

Apply Now