Tuesday, July 17, 2018

Investment Crowdfunding Helps Startups Generate Future VC Funding

How is investment crowdfunding helping generate more and bigger investments by VCs? See my comments in this post on WRALTechwire.
About Mark Easley

The three venture funding reports listed in the article are very interesting posts, and it is great to see this strong trend for our North Carolina businesses. I am sure there are many reasons for the increase in venture funding, including more money than ever is available from existing and new venture funds, and we have a very vibrant and active startup community in the Triangle and around the state.

In my opinion we now truly have one of the top startup ecosystems in the nation, allowing us to rank right up there with places like Austin, Boston, Seattle and Atlanta as places where startups want to be and investors want to invest. The strong consideration of our area by Apple and Amazon reinforces that belief.

Of course I view things from the investment crowdfunding perspective, and I think that has made a contribution to the growth of the venture capital market nationwide in a couple of ways:
  • A larger pool of potential companies for the VCs to back. Many companies that are too early stage for most of the VC community have been able to prove their value proposition and achieve important metrics with seed stage investment crowdfunding rounds. So this is providing a larger pool of pre-vetted companies as they move to the Series A and later stages where the VCs like to participate. About the same amount of money is now being raised by companies with crowdfunding as is being raised from early stage angel investors, so the available pool of seed stage funded startups is now much larger.
  • Earlier exit opportunities. The investment crowdfunding platforms have begun to create secondary markets for the stock of these startups. Before, it usually took 5 to 10 years for even a very successful startup to be acquired or have an IPO. But now the early investors and startup employees have a new alternative to getting some of their return earlier. They can sell some of their stock as a secondary offering on one of the investment crowdfunding platforms (Microventures.com in Austin has been a leader in this area), or they can use the Federal JOBS Act Regulation A+ to sell up to $50M worth of their stock as an investment crowdfunding round in what is known as a “Mini IPO”. A percentage of the stock can be from early investors and employees.
Both of these developments are helping the VCs to raise money for their own funds and then invest it in startups, because there is a larger pool of pre-vetted startups to put the money to work, and the potential for some quicker returns on investment. The effect of these developments is not that large yet in North Carolina, but I think it will grow into a significant factor here soon as it has in places like Silicon Valley, Austin, Boston, Seattle and Atlanta. So our startup community has a strong future ahead of it.

Friday, June 22, 2018

First NC PACES Act Crowdfunding Campaign Launches

By Mark Easley

It’s North Carolina business history in the making. An innovative Raleigh startup is the first company in North Carolina to find investors--not through PowerPoint and pitches--but through investment crowdfunding, thanks to the state’s new NC PACES Act. The Secretary of State Securities Division has issued the compliance letter for the offering and it is now live online on the LocalstakeNC crowdfunding platform.
About Mark Easley

You can find some amazing video of the Hush Buddy toddler sleep training system at www.hushbuddysleep.com. Here is a news story about the offering in WRALTechwire and another post in Triangle Business Journal. North Carolina Secretary of State Elaine Marshall has a press release about it.

Hush Buddy inventor Scott Hanson tells the story:

"Our company is Hush Buddy, which is bringing an exciting patented sleep training system for toddlers to market. The Hush Buddy system is complete with a storybook, parent’s guide and 'Whisper, the Hush Buddy', a night-light character that requires quiet to glow and dims if there’s sound to motivate the child to go to bed quietly. Moms report impressive results in two nights or less.

Thanks to the NC PACES Act, any resident of North Carolina can now get in on the ground floor as an investor in Hush Buddy with as little as $500. It’s easy to do with a free online investor account at https://nc.localstake.com/for_investors. And other North Carolina based businesses and startups can follow the lead of Hush Buddy and get funded with crowdfunding at https://nc.localstake.com/for_businesses. We think this is a win-win-win for North Carolina businesses and startups, everyday investors, and the state itself."

You may contact Scott Hanson with questions about the company and offering through the offering website. For more information click on Whisper the Hush Buddy below.

Saturday, May 19, 2018

Investment Crowdfunding Seminars

A video of the investment crowdfunding seminar we did recently at the American Underground startup accelerator in Durham is now available. We had a large crowd of interested startuppers and small business owners for our lunch and learn session at AU. 

Mark Easley
These seminars are held at various locations around the state in conjunction with our crowdfunding partners. Mark Easley, the publisher and editor of CrowdfundNC.com is the featured speaker, and he discusses how to use the new North Carolina Localstake NC investment crowdfunding platform to get funding for your startup or existing business.

Localstake NC enables startups and existing businesses to conduct a cost effective and professional debt or equity securities offering and get funding from new sources: their community, customers, partners, and supporters.

This seminar will help both entrepreneurs and investors understand these new funding options and how to make use of them. 

You can learn more and sign up for one of our upcoming live seminars on the Events tab.