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Janine Shea

Jumpstart Our Business Startups Act: Frequently Asked Questions About Crowdfunding Inte... - 0 views

  • How do I register with the SEC as a funding portal? Answer: The SEC must adopt rules governing funding portals before permitting anyone to register with the SEC as a funding portal. These rules will address the form and process needed to register with the SEC as a funding portal.
  • The JOBS Act requires these intermediaries to, among other things: provide disclosures that the SEC determines appropriate by rule, including regarding the risks of the transaction and investor education materials  ensure that each investor: (1) reviews investor education materials; (2) positively affirms that the investor understands that the investor is risking the loss of the entire investment, and that the investor could bear such a loss; and (3) answers questions that demonstrate that the investor understands the level of risk generally applicable to investments in startups, emerging businesses, and small issuers and the risk of illiquidity;  take steps to protect the privacy of information collected from investors;  take such measures to reduce the risk of fraud with respect to such transactions, as established by the SEC, by rule, including obtaining a background and securities enforcement regulatory history check on each officer, director, and person holding more than 20 percent of the outstanding equity of every issuer whose securities are offered by such person;  make available to investors and the SEC, at least 21 days before any sale, any disclosures provided by the issuer;  ensure that all offering proceeds are only provided to the issuer when the aggregate capital raised from all investors is equal to or greater than a target offering amount, and allow all investors to cancel their commitments to invest;   make efforts to ensure that no investor in a 12-month period has purchased crowdfunded securities that, in the aggregate, from all issuers, exceed the investment limits set forth in section Title III of the JOBS Act; and any other requirements that the SEC determines are appropriate.
Janine Shea

How Mosaic brings cleantech investing to the masses | GreenBiz.com - 0 views

  • Invest as little as $25, or as much as you want, in clean-energy projects. Earn a princely 6.38 percent interest annually for the next five years. Make the world a better place.
  • Mosaic, based in Oakland, Calif., has figured out how to crowdsource solar projects in a way that seems to be a win-win for everyone. For each project, it seeks investors — smaller fries, like you and me — to fund a given project, promising a respectable rate of return. As loans get repaid, investors can roll the proceeds back into new projects, or take the money and run. Think of it as Kickstarter for clean energy.
  • He dropped out of Yale in 2002 to help build a youth movement for climate solutions.
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  • “30 under 30” in energy by Forbes.
  • Their company started slowly, garnering interest-free investments from individuals to fund solar installations on five community projects. They range from homes on a Navajo reservation in Arizona to the Asian Resource Center in Oakland. All are smallish installations
  • I invested $100 in the Asian Resource Center installation in 2011, in equal parts to support the fledgling company as well as a social-service organization in my hometown
  • Those first projects were funded using a zero-interest investment model similar to Kiva, where investors get their principal back over time but no interest. This allowed Mosaic to avoid federal regulation and to go to market, learn the business, get feedback, and show traction for the idea. At the same time, it launched into the process of registering with the Securities and Exchange Commission, the federal agency that governs investment firms.
  • More recently, the company started raising money for projects in which it would pay interest. It can do this while waiting for SEC approval thanks to something called Regulation D, which exempts from regulatory oversight the offer and sale of up to $1 million of securities in a 12-month period.
  • A small group of investors was invited to put in as little as $25 and have been promised a return of 6.38 percent over five years.
  • The project is projected to save the youth center more than $160,000 through reduced electricity costs.
  • I invested $200 in this project as part of Mosaic’s private “beta” investment round
  • nlike investing in CDs, there are risks in Mosaic’s projects. The solar-installation customer could default on its monthly payments. The solar anels or installation could be faulty, tying the project up with repairs, negotiations, or worse.
  • If I want, I can reinvest the earned interest and repaid principal in other Mosaic projects with the click of a button.
  • “As an asset class, the default rates on solar leases and power purchase agreements are extremely low,”
  • There are a lot of unknowns: the number of people willing to invest sums, small or large, in energy projects offered by a start-up with a very short track record; the cost of attracting and servicing these investors; the number of available investment-quality energy projects; the actual performance of those projects during the life of the investments;
  • Together with a $2 million grant from the Department of Energy
  • , the company aims to scale its offerings, including geographically, to get millions of Americans involved with funding clean-energy projects.
  • It’s a bold idea: Raise money from the masses in order to bring solar to the masses, providing value to everyone along the way.
  • Having proved the concept, Parish and Rosen are now ready to kick things into high gear, throwing open the doors to all qualified investors.
  • “The economics of solar have begun to make sense in more places, and online investing and peer-to-peer finance are becoming widespread. Those are the two big forces that we’re a part of.”
  • I asked him why no one had done this before. “It’s a really difficult set of skills and competencies that you need to pull together on one team to make this business model work,” he explained. “You need the securities law expertise. You need the solar project finance expertise. You need the technology expertise to build the online investment platform, and you need the marketing expertise to get people to invest in the projects.”
  • For each project, Mosaic provides the underwriting and due diligence. “If we like it and it meets our investment committee’s criteria, we make a loan offer to the project developer or the project owner, and negotiate a loan to them.” Mosaic takes a servicing fee (the difference between the interest rate charged the developer and the rate pays investors) and an origination fee of between 3 and 5 percent of the loan, which the developer pays. Mosaic doesn’t do the installation itself — it contracts that out.
  • Clearly, not yet a pathway to riches. What’s needed is volume.
  • “Our goal is to be doing billions of dollars of investments a year in clean-energy projects,
  • “We have already had a lot of developers coming to us," he says. "We’re interested in offering high-quality, clean-energy projects for people to invest in.
  • We believe clean energy is good in and of itself and is a great asset class for investment. So we’re looking at all kinds of projects.”
  • It’s not just solar. Parish and Rosen are looking at a broader category of projects to finance — what they call clean-energy infrastructure. That includes other forms energy as well as energy-efficiency projects and electric-vehicle infrastructure.
  • All told, 51 investors ponied up $40,000 for the 106-panel installation; the whole project got funded in just six days. I’ve already received my first interest payment.
  • However it plays out, it’s a compelling and potentially disruptive business model. Allowing smaller investors to participate in clean-energy investments is an exciting possibility. And the relatively predictable returns of solar
  • can make these investments a safer bet than many traditional Wall Street investment vehicles.
  • And not for just small guys. Imagine if larger mission-driven investors, including pension funds and university endowments, started pouring money into Mosaic. The expanding investment pools could rapidly accelerate the growth of renewable energy and efficiency projects in the marketplace.
  • “I think a lot of people are just excited about the model,” says Parish, “and have been wanting to find a place that they can feel good about investing, that they can also generate pretty good yield from. And that’s what we’re trying to do.”
  • Parish makes a point: Some of this is an exercise in feel-good investing. But that’s nontrivial: How many of your investments do you feel good about? Even some of the so-called socially responsible funds hold stocks of fossil-fuel companies and other corporate nasties in their portfolios. If the nascent trend of disinvestment in fossil-fuel companies takes off among climate-minded investors, where will they next put their money? If Parish and Rosen have their way, there will be a new generation of cleaner investment alternatives to be found — perhaps, like me, right in your own community.
Janine Shea

'Crowdfunding' Rules Are Unlikely to Meet Deadline - NYTimes.com - 0 views

    • Janine Shea
       
      Deposits huh...?
  • Under Title III, companies wishing to sell stock to the public will have to provide information to investors and the S.E.C., including financial disclosures that grow more extensive as the size of the offerings increases. They will be allowed to sell stock only through an intermediary: either a broker-dealer or a specialized crowdfunding Web site, or portal. The intermediaries will have to take steps to ensure that small investors are protected, even from themselves. The law limits how much a person can invest in crowdfunding in a year, depending on income and net worth.
  • protection measures could, if fully adopted, make crowdfunding prohibitively expensive.
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  • The industry is likewise taking aim at a requirement that issuers raising more than $500,000 provide investors with audited financial statements.
  • intermediaries
  • The crowdfunding provision, Title III of the Jumpstart Our Business Startups Act, creates an exception to the general rule that before a company can sell its stock to the public, it must register with the S.E.C., a process of disclosure requiring elaborate and expensive assistance from lawyers, accountants and investment bankers that most small companies cannot afford. Instead, businesses seeking less than $1 million will be able to raise capital online from small investors in a streamlined process.
  • And with the departure of the S.E.C. chairwoman, Mary L. Schapiro, and three of her top deputies — including two who manage the offices writing the regulations — some in the nascent equity crowdfunding industry worry that it could be 2014 before their line of business becomes legal.
  • deposits on a product.)
Janine Shea

2013: What's In Store For Crowdfunding And Angel Investors - Forbes - 0 views

  • evolve into best practices and common leadership – this will accelerate the crowdfunding phenomena towards the $1 trillion market we predict it to be by 2020.  The investor democratization and customer communication involvement crowdfunding allows will trigger widespread corporate implementation by Q4, 2013.
  • mainly angels at this point – are in for the long haul
  • and not necessarily for a return on capital.
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  • Symbid confirms that their investors want to live vicariously through the efforts and innovation of the issuers.  Their Angel investors frequently roll over their investments.  The investor communication tool allows for investors to easily be updated and even vote on board members and larger decisions with the founders.
  • “In Europe, there will be increasing fusion between crowdfunding and angel networks. The notion that they are two entirely distinct concepts is an artificial one, and we will begin seeing more and more investors using both online (crowdfunding platforms) and offline (angel networks) methods to make their investments.”
  • However, US Angel networks will embrace crowdfunding more when
  • prediction
  • crowdfunding for equity becomes legal in the US in 2014.
  • er dealers that will emerge in 2013 as crowdfunding for equity is delayed. 
  • The exception will be the new brok
  • Leading crowdfunding for equity players like Chance Barnett at CrowdFunder and Candace Klein at SoMoLend are getting licensed as brokers and will start engaging leading angel networks in the US.  SecondMarket’s partnership with Angelist is a recent direction how the landscape is changing.  Angelist had $12 million plus in transaction by angels into start ups in December 2012.
  • The new angel network ‘upstart’ FundingPost
  • While content is king, distribution is king kong
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