Crowd Funding Strategies for Your Business | Mark J Kohler | Small Business Tip

Welcome to Crowdfunding Strategies and Update now this Is an exciting Video because this is A Rapidly Changing Area in The Industry of Finance and Raising Capital for Business using other People’s, Money, Sometimes it’s Called This Is kind of A big deal There’s a lot A lot of People that are excited About Crowdfunding I want to run Through some Definitions what it is the Steps How you Can participate what to look out for I think you’re Gonna love it Let’s go Through the four Rules That a Business, owner must Comply With in Order To do A Crowdfunding Raise of Money Now These are general you’ve got A Really A study up on this and the Crowdfunding Portals Have A Lot of Information There’s A lot of great Articles out There and the government at The Sec Website Has A Lot of Crowdfunding Information The First Rule Is You Have to Work with a portal you can’t Just go out and do This on your Own you have to Work with a portal and Sign Up to do your Crowdfunding with A Licensed Approved Portal Through the Sec Now I Would do your homework Make sure you’re Dealing with a legitimate Portal Step 2, Or rule Number 2 in This Process of Crowdfunding are The Formation Documents and Disclosures all Right Now There’s Five Little Areas Here that you need to be aware of Number one Are The Formation Documents Themselves Are You Doing an Llc are you doing a Corporation you need to have all your docs done Number two is you have to Disclose The Price The Terms and Be very Clear, on what the Person Gives and They Don’t want Anything Wishy-Washy again this is why the Sec is Allowing all this is because They’re Trying to Force it Into A clear Concise Equitable Fair Method to Raise Money Number Three you’ve got a half Good Accounting Records They Have to be reviewed or audited by a third party Accountant Third Party Accounting Firm the nice Thing in the Crowdfunding if You’re Raising for the first Time a million Dollars in it’s somewhere between 500 Grand and A Million you do not have to get Fully Audited financials you can go with a review Now the Fourth Piece That’s Required Under the Second Step Fourth Piece Is that you have to have a good Description about your Company who are you You’ve Got to Really describe what your Business is about the Product the Service And it’s gonna be a little More Detailed Than Just hey I got this great Idea Check me out you know a little YouTube Video for two minutes I mean This is going to Provide More Detail as to what you’re Gonna sell how when Where and And kind of Like a Business Plan if You will the fifth Piece is the last Disclosure in This Area Is that you have to Disclose and Release all the Information about the Owners and Officers so that’s the Disclosure Section And Formation Documents Section so Make sure You’ve got that step Down now the Third rule is Really an Expansion of What I was Talking About in The Disclosures that Financial Disclosure Which was Back in the? Forms and Disclosures Rule That I was Talking about the Third Rule and as you go to Research this at the Sec This is Really an Expansion of that Disclosure They Really Go in Depth as to what Those Financial Statements need to look like You’re Going to want to Study up on that the Fourth Rule in This Process is the Ongoing Compliance Now Obviously, you’re Going to have to do Tax returns, we’re Going to have to maintain good Accounting Numbers but you Also have to do annual Reports to the Sec and so if you’re Gonna go Into this Crowdfunding Game Make Sure that you get a budget as to how much Those in normal Course you’re Gonna cost you and Have a relationship with a firm that Can Help you I’ll Provide that to the Sec but under The Crowdfunding rules you Can Raise up to 1 Million from Individuals Anywhere from 2,000 to $100,000 from Any One Individual but That 2,000 A 100,000 Is going to vary Based on Their Economic Situation Now Let’s Talk about the Individuals and How Much They Can Contribute As Investors for Lack of A better Word Into your Crowd fund Here’s the two groups Just so you have the facts There’s Really Group A and Group B group A is where Most People are going to Fall and if Here’s The Rule if This Person Makes, less Than a Hundred Grand A year in the income Or Is their net Worth Is? Less Than A Hundred Grand Either One Kicks Them Into Group a okay and then they have Two Options They Can Give Two Thousand Dollars Max Or They Can Give Up to the lesser of Five Percent of Their Income Or five Percent of Their net Worth Be our People that Make more Than a Hundred Grand of Income the Year Annual Income and They, also are Worth More Than a Hundred Grand net Worth They’ve Got to have Both now what’s cool about Class B is they Can then give up up to a Hundred Thousand Dollars That’s the Max Hunter K-Max Or 10% of Their net Income Or the lesser of 10% of Their net Worth There’s A Lot of People invested in This and I really Think it’s Exciting for A lot of Small Business Owners so whether it’s you You’re an Advisor for someone That’s Looking to do Crowdfunding There you’re Gonna Have some Accounting support in There you’re Gonna need some legal support in There and It Could be the Difference to to take your Business to the next level so good luck

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