The biggest concerns about equity crowdfunding revolve around cap table management, red tape, and perception.
With Reg CF, companies will be able to raise up to $1 million from the crowd within a 12 month period, and they will be required to follow certain regulations dealing with transparency and reporting. FlashFunders has streamlined the process to make compliance easy and simple.
Managing Your Cap Table
Our unique investment portal allows you to accept investments from crowd, international, and accredited investors at the same time, within one round.
Traditionally, any new investment meant one less seat on your cap table, but we’ve changed that. As a transfer agent, FlashFunders holds all investments under $20,000 in book entry form, so none of your Reg CF investors count against your shareholder limit.
Reg CF investors and accredited investors retain liquidation preference over common stock, but only investors investing over $20,000 gain conversion or voting rights. Crowd investors are passive investors with no voice in the direction of your company.
After a funding round closes, our SEC-registered transfer agent, FlashFunders Shareholder Services, LLC, holds your investors’ stocks in book entry form. We manage your cap table and inbound investor requests, and help disseminate your annual financial report, so you can focus all your attention on building your business.
Red Tape With Raising Capital For Your Business
Raising capital traditionally cost thousands of dollars in legal fees as startups navigated the intricacies of regulatory and legal compliance. We made it simple for you.
Our legal team created documents that we provide to companies at no charge, saving startups thousands of dollars while ensuring full compliance. Our terms allow entrepreneurs to keep the autonomy they need to run their business.
When you raise a Regulation CF round, you commit yourself to submitting your financials with the Securities and Exchange Commission (SEC) and sending those financials to your investors.
Also, they are top-level financials. You never have to give away your secret sauce.
Perception of Equity Crowdfunding
Some people fear that accepting investments from the crowd means passing up the opportunity to take in investments from “smart money,” or angel investors who bring connections and experience to the table. But investments from the crowd offer some advantages that have never existed before - converting customers into evangelists.
Turn a customer into a mouthpiece for your company. People trust direct recommendations from their friends and family, making word-of-mouth your most powerful advertising. Crowd investors can help your company go viral.
Crowdfunding is as much a marketing tool as a financing strategy. Since your crowd investors don’t count against your shareholder limit on your cap table, you can try to accumulate as many as possible, so they will spread the message about your company.
Gaining crowd investments signals to venture capitalists and angel investors that you’ve established a market share. This positions your company for future growth, since you can already demonstrate that you have achieved a product-market fit.
When you raise money on FlashFunders, you can accept investments from the crowd and angel investors at the same time. Rather than exclude one group for another, FlashFunders’ unique structure lets you build a community around you.
Take Advantage of Regulation CF
Since the JOBS Act was created, we’ve worked to create a platform to take advantage of the benefits of the law while making the process simple and affordable.
Raising capital from your customers rewards them with a share in your your future, creating lasting fans while keeping your company attractive to the finance community for future financing rounds.
It couldn’t be easier to raise capital from angel investors, international investors, and the crowd.
If you're ready to finance your business through equity crowdfunding, fill out an application and our team will help guide you through the process.
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