SEC: Startups Can Now Raise $50 Million in ‘Mini IPO’


wall_st_2_featuredMarch 25, 2015

The SEC on Wednesday approved game-changing final rules in the implementation of Title IV of the JOBS Act, known as “Regulation A+,” which will allow small businesses and startups to raise up to $50 million from “the crowd.”

As I reported more than a year ago, this little-known provision of the JOBS Act will allow a startup company or emerging business to hold a “mini IPO” from the general public, not just accredited investors, and should be a complete game-changer for the way businesses are funded.

When Congress passed the JOBS Act in April 2012, Regulation A+ was an attempt to fix Regulation A, a rarely-used provision of federal law that allowed companies to raise up to $5 million in a public offering. Regulation A was a bust because it required the company to register its offering in each state where it was to be sold. The cost of complying with each state’s “Blue Sky Law” was exorbitant, compared to more commonly used laws such as Regulation D that allowed a company to raise the same amount of money, or more, without having to pay for expensive state-by-state compliance.

Under the SEC’s new rules for Regulation A+, the amount that could be raised increases to $50 million and the need for state compliance has been eliminated. More importantly, Regulation A+ allows those funds to be raised from the general public, not just accredited investors like with Regulation D offerings.

The question that had everyone in the crowdfunding world holding their collective breath was simple: Would the SEC keep their proposed rules intact when its leadership voted, or would they succumb to the pressure of state securities regulators who were adamantly opposed to lessening of restrictions for their own selfish financial reasons? The answer is that the SEC stuck by their guns and allowed companies to raise Regulation A+ without having to go to each state and spend a fortune registering their offerings.crowd funding 033115 screen

Related: People Invest in People — an Overlooked Aspect of Private Investing

Another important issue the SEC decided involved who can invest in these offerings. The JOBS Act limited Regulation A+ offerings to “qualified investors” which led some to argue that only “accredited investors” would be allowed to invest. Accredited investors are those individuals who earn more than $200,000 per year or have a net worth of greater than $1,000,000. However, the SEC broadly defined the term “qualified investors” under Regulation A+ to allow anyone to invest, albeit with some limitations as to the amount.

For those worried about protecting investors from fraud, Regulation A+ only allows investors to invest 10 percent of the greater of their annual income or net worth in these securities. The SEC has also implemented other strong investor protections such as “bad actor” background checks on the companies offering the securities, and disclosure of the company’s financial information as part of the offering.

The Regulation A+ rules can be read in full here. There are hundreds of pages, so get ready for a long read or a fast way to bore yourself to sleep. Having read the entire thing, I can tell you with confidence as a crowdfunding attorney that Regulation A+ has a chance to dramatically change the way small and emerging businesses raise capital in America.

The rules released by the SEC today now have to be published in the Federal Register before they become law, which takes about 60 days. As soon as that happens, entrepreneurs will have the ability to raise millions of dollars from “the crowd” in a simplified and comparatively affordable offering using Regulation A+.

Related: Real-Estate Crowdfunding Set to Top $2.5 Billion This Year

Kendall Almerico
Contributor
Crowdfunding Attorney and JOBS Act Expert
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National SBIR Conference with the 2nd annual National Innovation Summit and Showcase and 16th annual TechConnect World Conference


pixel_invisQDOTS imagesCAKXSY1K 8The National SBIR Conference and the 2nd annual National Innovation  Summit and Showcase will be held in parallel with the 16th annual TechConnect World Conference, at the Gaylord Convention Center, May 12-16, 2013. 

National Innovation Summit


 

 

In support of the White House and Congressional call for innovation commercialization initiatives, the National Innovation Summit and Showcase delivers the world’s largest showcase of industry-vetted emerging-technologies ready for commercialization.   Don’t miss as TechConnect presents the Nation’s top innovations emerging from our federal technology funding programs.  All showcasing innovations  are vetted by our industry and investment review committees, and all will participate the TechConnect Corporate Acceleration and Matchmaking Programs with our participating Corporate and Investment Partners.

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National Innovation Awards


awards iconFederal Agencies fund the inspiration, Industry picks the winners!

Announcing the TechConnect National Innovation Awards, presenting the nation’s top innovations as ranked by the TechConnect investment and corporate partners. Awardees to be announced on-site during the joint innovation conferences.

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National SBIR Conference


The Small Business Innovation Research (SBIR) and Small Business Technology Transfer programs are highly competitive, encouraging small businesses to engage in Federal Research/Research and Development (R/R&D) work with potential for commercialization.

National SBIR/STTR conferences are typically the largest and most important conferences specializing in helping small businesses learn about participating in SBIR/STTR programs. At this Conference, representatives from all 11 federal agencies with SBIR programs will attend, in addition to other SBIR/STTR experts and trainers. Conference highlights include:

  • Presentations from all SBIR Agency Program Managers
  • Learn how to successfully submit competitive research proposals
  • Hear from government, industry and academic experts on successful commercialization strategies
  • Interact with SBIR Agency Program Managers, technology entrepreneurs, large company representatives, and researchers in Roundtable discussions, sessions and 1-on-1 meetings
  • Learn about cutting-edge opportunities in defense, agriculture, energy, and health/medicine
  • Optional pre conference workshops on SBIR Phase I, Phase II and licensing and commercialization

More About the Conference: http://nationalinnovationsummit.com/?goback=%2Egde_3221076_member_239262171

 

Finding Angel Money is Easier if You Know the Rules


Fundraising is brutal. Actually, according to Paul Graham, “Raising money is the second hardest part of starting a startup. The hardest part is making something people want.” More startups may fail for that reason, but a close second is the difficulty of raising money.

A while back, I outlined “The 10 Best Sources of Cash to Start Your Business” for startups, listing angel investors as alternative #6. I still get a lot of questions on these mysterious and often invisible investors, so here is another attempt to bring them out of the ether.

By definition, an angel investor is not an “institutional investor.” Venture capitalists (VCs) are paid to invest other people’s money, and measured on the rate of return they get. Angels are typically high net worth individuals who are investing their own money, for a wide range of motives.

So “good” angels are ones with motives that are consistent with what you bring to the table. This means they usually invest in people who have the right “chemistry”, and areas of business they already know. They tend to work locally, so they can “touch and feel” their investments.

Angel investors also tend to limit the size of individual investments to $250K or less. If you need more, you need VCs or a flock of angels. So how do you find those good angels?

  • Use personal networking. The best angels you will find are the ones who know you personally, or know a member of your team or advisory board. If a potential investor gets to know you BEFORE you are asking for money, your credibility and investment probability will be improved by an order of magnitude.
  • Entice angels to play along. Of course, angels are really mortals. They want to make a difference. Asking an angel to work with your company in an advisory role is a great way to establish a relationship that may lead to a cash investment. If you impress the angel, it will likely make her at least an archangel (advocate) when it comes to funding.
  • Court local angel groups. Since angel investors most often focus only in their own geographic area, it’s most effective to court the local group, or even make a guest appearance with an archangel. If you can earn an archangel’s confidence, he or she will invite you to pitch the group, and you’ll have an edge in the voting.
  • Mine national databases. If you are still alone, submit your application to the leading online website national databases of angel investors, Gust (USA) and National Angel Capital Association (Canada). These sites have arrangements with hundreds of local groups and individual investors that you might otherwise have missed.
  • Remember angels beget angels. That means that once you get the first one, he or she becomes your best advocate for finding more. Investment angels don’t like to travel alone, so they will bring in others if they can (it’s called share the risk).
  • Don’t forget passive angels. These are angel investors who are private, meaning they don’t go to meetings, but will invest if someone they trust brings them an attractive opportunity. Find the right investment advisor, or member of your advisory board, and the “match-making” will happen.

Remember that angels have a culture all their own, and it pays to understand how to deal positively with them after you find one. There are some books out there to help, like the one I just published with Joe Bockerstette “Attracting an Angel – How to get Money from Business Angels and Why Most Entrepreneurs Don’t”, and an old standby “The Art of The Start”, by Guy Kawasaki.

Even if you follow this recipe, you are likely to find that fundraising is a brutal challenge. But if it results in a good angel or two watching over your startup, you will definitely be one step closer to heaven.

Marty Zwilling

Leadership Secret Number One — Pure Energy! October 03, 2012


The Seven Core Qualities is not a complete and perfect list, but rather designed to show you the common qualities of successful leaders that I’ve worked with over the years. How many of these qualities do your favorite leaders embody? How can you strengthen these qualities within yourself to enhance your ability to lead?

The first quality we’ll look at is PURE ENERGY. By Tony Robbins

Change, transformation, and results all require enormous energy. Many people fail to achieve what they want simply because the mind is willing but the body is weak. Their mind says, “let’s go get ‘em” and their body says, “I can’t get out of bed.” Whenever you think of someone who has charisma or impact, isn’t it true that they also have a significant amount of psychological, emotional, or physical energy? Of course, there are many different styles of energy. Some are external in their style of communication and intensity, but everyone who is successful somehow brings energy—a physical, emotional and spiritual energy—into their environment. Being able to tap into that energy even when you are exhausted, even when things aren’t going your way, often separates those who achieve and lead at the highest level versus those who fall short.

There are certain fundamental things that people do to increase their energy regardless of how much sleep they’ve had or where their blood sugar is. We’ve all had tough days where in spite of the circumstances something inside snapped us into a state where we took off and made something extraordinary happen.

What was it that shifted? Our energy and our psychology, because they are tied together. Virtually everyone knows someone whose psychology is so poor that they can walk into a room and suck the energy out of the building. And, we also know there are others who do the complete opposite: they bring energy to any environment they live in. People gravitate towards them.

The scary part is when the person in the position of leadership has no energy. We all know what that does to the momentum of an organization. Look, it’s no secret that we’re living in tough economic times. Your ability to find a competitive edge—to tap your capacity and the true capacity of your team—often will be based on your ability to shift your energy and the emotions of those around you. I’m not talking about some naive approach to life where you delude yourself through positive thinking that everything will be just fine. I’m not talking about BS’ing yourself. The type of person I’m talking about is someone who can make the tough decisions and take the necessary action to turn things around in spite of the challenge. In other words, a real leader…someone who can talk about the real issues, get everyone to face the challenges, and have enough energy to find the solutions necessary, even in the most dire of circumstances.

Without energy, nothing moves—nothing changes. But with energy, anything can be expanded or transformed. It is important to remember that there are multiple ways to expand your energy. One is to physically take care of yourself—to train your body so that you have that expanded sense of energy and endurance. But you can also find energy (even when you’re exhausted) by tapping into a vision, a sense of purpose, which brings energy not only to yourself but to your team as well. Often, people feel exhausted not because they’re not in great physical shape or don’t have a vision, but because they have inner conflicts. They are trying to meet two different “masters” that don’t support each other, so their energy becomes divided. Finding and unifying vision and purpose is what has given power to so many great leaders. Steve Jobs was famous, or in some cases “infamous,” for his relentless intensity. It came from his undivided focus to create the greatest products and the greatest company in the world.  Similarly, the standard that Steve Wynn holds for himself and for every member of his team creates an energetic momentum that not only affects him personally but everyone he has the privilege to lead.

The important distinction here is you can’t manage what you don’t measure. How would you rate your level of energy on a consistent basis (especially when things are not going your way)? What would you give yourself on a scale from 0 to 10? If the number is not high enough for you to be an effective leader, what could you do to improve it? On a scale of 0 to 10 where would you rate your energy?  We’ll touch on some of the simplest and most powerful ways to increase your energy in a future blog and video.

In our next blog post we’ll look at the second core quality of leadership, EMOTIONAL MASTERY.

The Core Qualities of Leadership


By Tony Robbins

What are the essential qualities that make a great leader? What are the skills, strategies, or tools that we can use to shape our natural gifts into true effective leadership?
For more than 35 years I’ve been obsessed with learning the answer to what makes a difference in the quality of people’s lives: Why is it that some people who are given every advantage so often fail to achieve what they desire and deserve. In contrast, we all know people who have lived incredibly difficult lives—lives filled with unimaginable challenges, and often injustice—who still seem to find a way to breakthrough and get results, not only for themselves, but find a way to serve others in a very deep and meaningful way.

I’ve had the honor of working in 100 countries with more than 50 million people from every walk of life: from incredible leaders to the most challenged individuals you can imagine. We’ve had 4 million people in my live seminars, so at this point I’d have to be an idiot if I didn’t see that there are certain patterns that cause people to succeed and other patterns that cause people to fail—patterns that cause people to be overwhelmed and stressed out and other patterns that allow people to find deep meaning and success in virtually every aspect of their lives.

Part of my understanding has come from the fact that for decades I’ve been a leader called upon by leaders. I get the call when the fire starts. When the President of the United States has to address the nation. When an athlete is burning down on national television and I’m required to intervene and create measurable change on a moment’s notice.

The one thing that I’ve found that separates the quality of people’s lives—the single largest difference—is the capacity to lead. Leadership skills are not just a gift. Leadership skills are something anyone can learn.

Who is a leader? You and I both know it’s not always the person who controls things by position. How many times have we been in a meeting when the person at the lowest position was influencing the direction of a decision or a project? We all know that leadership—whether you are the CEO, or the manager, or the mom—is about the ability to influence the thoughts, emotions, and actions of other human beings.

But here’s the key: there’s an energy to leadership. There’s a passion. There’s a level of connectedness that leaders have with others. It’s their ability to get things done and make progress that sets them apart.

Over the years, I’ve had the opportunity to learn from and become friends with legendary leaders. People like Las Vegas casino tycoon Steve Wynn, who defines vision, energy, and relationship. In 1989, when a new major casino had not been built in nearly 20 years, he decided to test his vision and put it into action by building the Mirage and then quickly thereafter Treasure Island. Then after proving his success, he created the magnificent icon of the Bellagio. Steve started a $12 billion building boom, which has culminated in his finest works in the Wynn and the Encore. For turning Las Vegas into the premiere entertainment capital for much of the world, Time magazine recognized him as one of the “World’s 100 Most Influential People.”

Or what about Tony Hsieh, the founder of Zappos, who took what most people thought was a crazy idea—selling women’s shoes over the Internet? Are you kidding me? Women will never buy shoes over the Internet, they have to try them on. The answer: Free shipping and guaranteed free returns.  It was a huge risk, but he decided that it wasn’t about selling shoes; it was about delivering happiness. Zappos inspired a level of customer service that was completely unheard of and took a company from an apartment in San Francisco to the largest online shoe retailer, which Amazon bought in a deal valued at $1.2 billion.

What do you think it took for a guy like my dear friend Marc Benioff to leave Oracle and take his vision of converting onerous business software into something as easy and engaging as using Facebook or buying a book on Amazon? In less than 13 years, he transformed an idea into salesforce.com, a $3 billion company, which this year, for the second year in a row, was named “The Most Innovative Company in the World” by Forbes.

All of these people all have different styles. But leadership, in its essence, comes from the same core qualities. It’s not just great oratory. The spirit of great leadership is the capacity to take visions and to influence others to do more than they would ever have done on their own. Great leaders help people raise their own standards so that regardless of whether or not the leader is present, the organization or individual still performs at a higher level than ever before. At its essence, leadership is the ability to inspire people. It’s the ability to ignite the human spirit and execute consistently.

Leadership is not luck nor is it haphazard. Anyone who has been successful in any one area consistently is not lucky. They are doing something unique. Remember, success leaves clues!

My obsession has been to find what great leaders do, codify it and put it into a system where people don’t just learn it intellectually, but where they’re so engaged that they build the mental and emotional muscles that get them to follow through when the going gets tough. Because ultimately, it’s not what you know but what you do consistently that defines your level of impact.

In any organization, the chokehold on the growth of the business is almost always the psychology and the skill sets of the leader. Sometimes their psychology lacks energy: often, they are emotionally exhausted by things in their personal life, or sometimes there’s an energy leak because they are stressed about relationships within the organization or with clients that they are not connecting with. Sometimes the challenge stems from a lack of financial mastery, or other times it’s a lack of time mastery. I’ve found 80% of success is psychology and 20% is based on skill sets. 

Leaders from the President of the United States to the president of a software company are often defined by their different styles. But there are seven core qualities that extraordinary leaders seem to share in common.

A blog is short and I like to go deep. Over the next week we’ll dig into each of the seven core qualities of leadership. Each day we’ll give you one of these principles to evaluate and measure. Whether you are a CEO or a parent, you can see which qualities you might want to strengthen to enhance your ability to lead in your business or personal life.

Here’s a list of what I’ll cover over the next few weeks — watch for these posts here in your LinkedIn news feed!

Core Qualities of Extraordinary Leaders

  1. Leadership Secret Number One – Pure Energy!
  2. The Number One Secret to a Leader’s Edge in Uncertain Times
  3. The Two Secret Skills Great Leaders Master
  4. The Chokehold to Growth – Here’s the Leader’s Missing Link
  5. The Final Secret of Great Leadership
  6. What I’ve Learned About Great Leaders