Franklin

Equity Crowdfunding for Investors : A Guide to Risks, Returns, Regulations, Funding Portals, Due Diligence, and Deal Terms.

Author/Creator:
Nutting, Matthew R.
Publication:
New York : John Wiley & Sons, Incorporated, 2015.
Format/Description:
Book
1 online resource (306 pages)
Edition:
1st ed.
Series:
Wiley Finance Ser.
Wiley Finance Ser.
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Other records:
Subjects:
Electronic fund raising.
New business enterprises -- Finance.
Small business -- Finance.
Form/Genre:
Electronic books.
Summary:
Learn the ins and outs of equity crowdfunding with this informative guide Equity Crowdfunding for Investors is a comprehensive, objective, and authoritative guide to the social and financial rewards of crowdfunding. Before now, angel investing - and the spectacular returns possible in this asset class - has been off-limits to all but the wealthiest Americans. Now equity crowdfunding portals allow the general public to buy shares in startups and fast-growing private companies for the first time in generations. This book provides the guidance individuals need to invest wisely, tempering the excitement of leading-edge technology, innovative business models, and exciting new brands with thorough, practical know-how - including investor limits and requirements, portfolio strategy, deal terms, and much more. Readers will learn the pros and cons of investing in equity crowdfunding so they can make an informed investment decision, as well as best practices for finding, researching, evaluating, and buying into potentially profitable startups. Digital components include tables, graphs, comparison charts, screen captures, checklists, and other tools that further enable readers to make suitable investment choices. Equity crowdfunding is a new, exciting, and evolving way for growing businesses to raise capital and for average investors to buy equity in those businesses. It has been hailed as a "game changer" in the private capital markets, particularly the angel investment asset class, which includes angel investing. This book shows readers how to take full advantage of this new avenue of investment, without being taken advantage of themselves. Make smarter investment decisions Avoid being ripped off Find the best information available Understand the SEC rules and limits Equity crowdfunding can produce huge returns. It also comes with huge risk. Some
companies will succeed, but many will fail. Everyday investors can mitigate some risk and increase their chance of profit with the fundamental insight provided in Equity Crowdfunding for Investors.
Contents:
Cover
Title Page
Copyright
Contents
Foreword
Preface: The New Angel Investors
Definitions of Key Terms
Acknowledgments
About the Authors
Chapter 1 The Foundations of Online Crowdfunding
The Internet Doesn't Change Everything
But the Internet Changes Some Things
Rewards Crowdfunding Blasts Off
Wisdom and Madness of the Crowd
Rewards as a Gateway to Equity
Debt and Donation Crowdfunding
Lending to Your Peers
Donation Crowdfunding
Emergence of Equity Crowdfunding
Chapter 2 Equity Offering Platforms (under Regulation D)
Definitions
Liquidity
Liability
Regulation D Basics
Regulation D Offering Platforms
Deregulating General Solicitation
Distinguishing Reg D and Title III
Reg D Offering Platform Categories
Profile: MicroVentures
Done Deals
Deal Flow
Closing the Deal
Profile: CircleUp
Done Deals
Deal Flow
Closing the Deal
Suspense Builds around Title III
Chapter 3 Equity Crowdfunding
Paving New Roads to Capital Markets
A Deeper Dive into Title III
Title III Provisions for Issuers
Title III Provisions for Investors
Title III Provisions for Intermediaries
Broker-Dealers and Due Diligence
Experts and Pundits Analyze Title III
Supply-Side Pessimists
Demand-Side Pessimists
The Cautious Outlook
Chapter 4 Intrastate Equity Crowdfunding
The Intrastate Exemption
The Surge of Intrastate Exemptions
Can Funding Portals Receive Compensation?
The Bohemian Guitar Success Story
Deal Trickle, Not Flow
More Intrastate Crowdfunding Exemptions
Chapter 5 Deal Flow
Stages of Business Development
Growth Potential
Historical Angel Deal Flow
Chapter 6 Angel Investors
Angel Investors before Crowdfunding
Traditional Angel Investors
Financial and Social Motivation
Running the Numbers.
Where's the ROI?
Angel Groups and Angel Crowds
Wisdom and Madness of Crowds
New Angel Investors
Two Keys to Angel Investing Success
Chapter 7 Equity Crowdfunding Portals
Suitability and Due Diligence
Revenue for Platforms
Purebred and Hybrid Platforms
The Equity Crowdfunding Ecosystem
Generalists, Specialists, and Aggregators
Orientation to Equity Crowdfunding Sites
Terms and Conditions of Use
The Investor Dashboard
Application for Issuers
Chapter 8 How to Invest, Part I: Portfolio Strategy
Private Securities Risk and Reward
Risk and Diversification
Alternative Assets
Asset Allocation
Dry Powder
Before You Pull the Trigger
Return on Investment
Liquidity
Employment
Exits
Chapter 9 How to Invest, Part II: Identify Suitable Offerings
Narrow Down Your Selection of Offerings
Social and Personal Motivations
Financial Motivations
Selecting Equity Crowdfunding Sites
Get Good Advice from Informed Advisers
Tying It All Together
Chapter 10 Equity Crowdfunding Securities
Straight Equity: Stock and LLC Units
Common and Preferred Stock
Drawbacks of Corporations
Limited Liability Companies
LLC Drawbacks
Stock or LLC Units: Which Is Better for Investors?
Convertible Debt, the Hybrid Security
Chapter 11 Deal Terms
Negotiations and Standards
Do All Those Terms Really Matter?
Deal Terms for Straight-Equity Offerings
Economic Terms
Control Terms
Terms Relating to Liquidity Events and Future Financing
Other Terms
Evaluating Deal Terms
The Joys of Due Diligence
Chapter 12 How to Invest, Part III: Due Diligence
DIY, Outsource, or Collaborate
The Crowd
Three Buckets: Legal, Financial, Business
Legal Due Diligence
Corporate Information
Operational Information
Potential Liabilities.
Intellectual Property
Financial Due Diligence
Financials Required for Equity Crowdfunding
Business Due Diligence
Founders and Management Team
Individual Characteristics
Group Dynamics
Business Operations
Business Plans
Market Analysis and Competitive Advantages
Forecasts and Projections
Exit Strategy
Chapter 13 How to Invest, Part IV: Funding and Postfunding
Your Rights as a Shareholder
Management Participation
Manage Your Equity Crowdfunding Portfolio
Return on Investment
Your Investor Network
Chapter 14 Liquidity and Secondary Markets
Restrictions on Transfers
Why Sell? Who Will Buy?
Secondary Markets in the Digital World
Title III Secondary Markets
Conclusion
Epilogue: Trends and Innovations
Equity Crowdfunding Resources
About the Companion Website
Index
EULA.
Notes:
Description based on publisher supplied metadata and other sources.
Local notes:
Electronic reproduction. Ann Arbor, Michigan : ProQuest Ebook Central, 2021. Available via World Wide Web. Access may be limited to ProQuest Ebook Central affiliated libraries.
Contributor:
Freedman, David M.
Other format:
Print version: Nutting, Matthew R. Equity Crowdfunding for Investors
ISBN:
9781118857809
9781118853566
OCLC:
910159962