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What reporting requirements do issuers have to their crowdfunding investors AFTER they've completed a financing?
The issuer must post on its website an annual report along with its financial statements certified by the principal executive officer of the issuer to be true and complete in all material respects and a description of the financial condition of the issuer.
If, however, an issuer has available ... more
The issuer must post on its website an annual report along with its financial statements certified by the principal executive officer of the issuer to be true and complete in all material respects and a description of the financial condition of the issuer.
If, however, an issuer has available financial statements that have either been reviewed or audited by a public accountant that is independent of the issuer, those financial statements must be provided and the certification by the principal executive officer will not be required.
The annual report also must include the disclosure required by paragraphs (a), (b), (c), (d), (e), (f), (m), (p), (q), (r), and (w) of Section 201 of the Reg CF Rules.
The report must be filed no later than 120 days after the end of the fiscal year covered by the report.
The issuer must continue to comply with the ongoing reporting requirements until one of the following occurs: (1) The issuer becomes a public reporting company; (2) The issuer has filed, since its most recent sale of securities under the crowdfunding exemption, at least one annual report and has fewer than 300 holders of record; (3) The issuer has filed, since its most recent sale of securities under the crowdfunding exemption, the required annual reports for at least the three most recent years and has total assets that do not exceed $10,000,000; (4) The issuer or another party repurchases all of the securities issued under the crowdfunding exemption, including any payment in full of debt securities or any complete redemption of redeemable securities; or (5) The issuer liquidates or dissolves its business in accordance with state law.
The issuer must file with the Commission and provide to investors and the relevant intermediary a Form C: Progress Update (Form C-U) to disclose its progress in meeting the target offering amount no later than five business days after each of the dates when the issuer reaches 50 percent and 100 percent of the target offering amount. This requirement shall not apply to an issuer if the relevant intermediary makes publicly available on the intermediary’s platform frequent updates regarding the progress of the issuer in meeting the target offering amount.
The issuer must file an annual report on Form C: Annual Report (Form C-AR) no later than 120 days after the end of the fiscal year covered by the report.
An issuer eligible to terminate its obligation to file annual reports must file with the Commission, within five business days from the date on which the issuer becomes eligible to terminate its reporting obligation, Form C: Termination of Reporting (Form C-TR).
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Can a crowdfunding portal "curate" opportunities or must they accept any company willing to list on their portal?
A platform can set parameters for the type of company and offering it will accept. And then it can (indeed, must) deny access if it believes there is potential for fraud or if the issuer has not complied with the regs. Put those together and most platforms have the ability to filter out the types of... more
A platform can set parameters for the type of company and offering it will accept. And then it can (indeed, must) deny access if it believes there is potential for fraud or if the issuer has not complied with the regs. Put those together and most platforms have the ability to filter out the types of companies and offerings they don't want to host.
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Who does the Crowdfunding Professional Association (CfPA) represent in the industry? Who does the Crowdfunding Professional Association (CfPA) represent in the industry?
The CfPA represents a range of stakeholders in the crowdfunding industry including investors, issuers, intermediaries (/crowdfunding portals), and the growing community of service providers (e.g. accountants, lawyers, analytics firms, marketing and communications firms).
In order for the industry to... more
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What kind of data and analytics is available in the crowdfunding industry?
Hi. We've been collecting data on Regulation Crowdfunding since the launch of the industry in May, 2016. As of last year, this data is being transmitted daily to Bloomberg for industry analysis and investment opportunities. Our dataset is the most comprehensive one out there and covers all current a... more
Hi. We've been collecting data on Regulation Crowdfunding since the launch of the industry in May, 2016. As of last year, this data is being transmitted daily to Bloomberg for industry analysis and investment opportunities. Our dataset is the most comprehensive one out there and covers all current and closed platforms as well as all current and withdrawn offerings.
We work with hedge funds, institutions, venture capital and the like as they look to explore expanding into this alternative asset class. Our dataset includes $1B in RegCF transactions.
If you'd like to schedule a call to discuss your needs please reach out to: sherwood@theccagroup.com and reference this thread.
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Hello, I am TRAORÉ ADAMA. I tried to submit my project for crowdfunding participation funding. But I'm told I must fill out Form C. I don't know what it is. And I would like someone to guide me and help me complete this form. I really care about the project. Thank you!
Hello! The Form C is the disclosure information that needs to be filed with the Securities and Exchange Commission before you can launch a campaign under Regulation Crowdfunding. Lawyers generally charge $5-10,000 to prepare it.
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While the regulations clearly state that an issuer can't conduct a Reg CF offering on multiple funding portals simultaneously, is there anything that would prevent a potential issuer from running a Testing the Waters campaign on multiple funding portals at the same time?
Nothing in the rules prevents it although platforms could impose their own contractual requirements (eg, if you use our platform for TTW you have to use us for the actual offering).
BTW, the SEC were not actually expecting that TTW would happen on platforms! They thought TTW would be on social media... more
Nothing in the rules prevents it although platforms could impose their own contractual requirements (eg, if you use our platform for TTW you have to use us for the actual offering).
BTW, the SEC were not actually expecting that TTW would happen on platforms! They thought TTW would be on social media or on issuers' own sites.
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For Funding Portals, who offers the best insurance? Meaning liability insurance for funding portals. Thank you!
I've worked with Monica Minkel of Holmes Murphy for years. She does the best she can for us given the very difficult insurance market for crowdfunding platforms which are considered high risk (and hence the insurance is expensive). Monica is very familiar with the crowdfunding insurance market. ... more
I've worked with Monica Minkel of Holmes Murphy for years. She does the best she can for us given the very difficult insurance market for crowdfunding platforms which are considered high risk (and hence the insurance is expensive). Monica is very familiar with the crowdfunding insurance market. Please let her know that I sent you, if you reach out. minkel@holmesmurphy.com
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I would like to know if there is any other distinctive crowdfunding model other than the four basic crowdfunding models that include donation-based, reward-based, equity-based, and debt-based models? Excluding the hybrid, of course.
Hello Kiko,
There is also revenue-sharing and royalty crowdfunding. Those two are similar but each has its own nuance depending on how you structure your unique deal.
Just keep two things in mind:
1. Investors will want good investment terms
2. Crowdfunding doesn't actually r... more
Hello Kiko,
There is also revenue-sharing and royalty crowdfunding. Those two are similar but each has its own nuance depending on how you structure your unique deal.
Just keep two things in mind:
1. Investors will want good investment terms
2. Crowdfunding doesn't actually raise you money, marketing does. Gotta market your deal.
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What are the accounting requirements for a crowdfunding campaign? What are the accounting requirements for a crowdfunding campaign?
The SEC requires GAAP based financial statements. Depending on the amount you want to raise, the requirements could be anything from self-prepared, GAAP based financials, all the way up to an audited set of financials. Reviewed financials are required if you want to raise up to $1,070,000. Anything ... more
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I am on a budget setting up my license crowd Funding portal with the FINRA/ SEC. I have completed everything and just need to send me finger print. is there a checklist for the thing i need to do so i can do everything properly and know my roadmap. is it hard to change the na
I'm sorry, but I'm not a platform expert and can't help you with those questions. But congratulations on your hard work and I hope you find success shortly. One of the benefits of joining the CfPA is access to our thought leaders, and also referral to qualified professionals who could answer your qu... more
I'm sorry, but I'm not a platform expert and can't help you with those questions. But congratulations on your hard work and I hope you find success shortly. One of the benefits of joining the CfPA is access to our thought leaders, and also referral to qualified professionals who could answer your question. My best advice is squirrel some funds away to hire a good securities attorney to answer those questions. Continued Success!
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