Seed Equity CrowdFunding, known as Title III: Startups raising $100k up to $1 mill in seed capital fit the newly expanded main street equity crowdfunding rules nicely. This means that main street investors (both accredited and non-accredited individuals) worldwide can now buy shares in your company. The smaller the capital raise, the less demanding the disclosure rules, with break points at $100k and $500k. We can expect many of the existing equity crowdfunding platforms to now expand to include main street investors.
Vetted financials are required in many cases, and there will be marketing costs to promote your offering to investors. These costs could range from as low as $10k to the $60k range. The marketing cost will vary greatly depending on who is doing the marketing and how well it is executed. It costs money to get the attention of investors. Marketing agencies cannot charge a percentage fee on capital raised. They have to charge for their services in cash. But the good news is that the cost of reaching main street investors is far lower than the cost of drawing in Accredited investors if your company appeals to consumers, which is critically important here.
The initial slate of Title III Funding Portals are SI Portal (Seedinvest), IndieCrowdFunder, StartEngine, NextSeed, WeFunder, JumpStart Micro and CrowdBoarders. Many more funding platforms will likely soon be approved by FINRA, and this should is becoming a crowded field with many good entrants. The most attractive Title III platforms will be those that have large scale and use their scale efficiently for Title III startups. IndieGogo/Microventures and Wefunder are the leaders at this point. See the list of Reg CF platforms below:
- Indiegogo / MicroVentures
- Open Deal (Republic)
- DreamFunded Marketplace
- Funding Wonder Crowd
- GrowthFountain Capital
- JumpStart Micro
- Kasdaq (Mr. Crowd)
- NetCapital Funding Portal
- Not So Small Change (Small Change)