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  1. #1
    Senior Member
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    Oct 2016
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    Smile Type of equity crowdfunding

    There are numerous types including REG D 506 (b), 506 (c) REG CF and also REG A+ with each having their own regulations, disclosures, and SEC filling requirements. Who can explain it for me please?

  2. #2
    Senior Member
    Join Date
    Sep 2016
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    I don't think "types" is the right word for those. Because, when you talk anout type, everyone thinks of these

    1. Equity Based Crowdfunding: Investors receive a stake in the company. (If Pebble goes big, you get a percentage of the prize).

    2. Donation Based Crowdfunding: Contributions go towards a charitable cause. (You paid for 50 children in Africa to receive watches).

    3. Lending Based Crowdfunding: Investors are repaid for their investment over a period of time. (You invest in Pebble, and get your money paid back over time).

    4. Reward Based Crowfunding: Investors receive a tangible item or service in return for their funds. (You invest in Pebble, and get a first edition watch.)

    I think those are rules and regulation governing the types of equity crowdfunding you want to invest in.

  3. #3
    Member
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    Jun 2017
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    There are three in the USA as of September 2017

    1. Reg CF--Up to $1 mill Seed Equity Crowd Investing: Starting in May 2016, the SEC made it possible for U.S. startups to raise up to $1 million from “main street” (non-accredited) investors. These rules, also called Title III, are very exciting because they enable Investors of any wealth level to invest amounts as small as $100 into seed rounds in startup companies for the first time since 1934. In the half year since launch in May of 2016, 52 companies raised $13 mill of capital in total, averaging $250k each. Here is a summary of Reg CF and platform listing.

    2. Title II - Up to $4 mill Startup Equity Crowd Investing for Accredited investors: There is no maximum for Title II, and generally the sweet spot is from $100k to $4 mill. Starting in September 2013, the SEC defined equity crowd investing for startups that appeal as investments without the restriction of having to be a consumer gadget. The SEC allowed Title II equity crowdfunding websites for the first time to raise investment capital, but only from wealthy “accredited” investors. By my calculations, this has resulted in $600 mill of capital raised by Title II platforms in 2016. Shares are not liquid after these offerings. Here is a list of popular Title II platforms.

    3. Regulation A+ Up to $50 mill Mature Startup and Mid-Stage Equity Crowd Investing: In a historic move, the SEC introduced another whopper in the summer of 2015--Regulation A+ (Title 4, summary here) allows mature start-ups and mid-stage companies (Reg A+ suits these types of companies) to raise $4 mill to $50 mill in equity capital from main street investors worldwide, with stock that is liquid for the investor immediately after the offering completes. Reg A+ can be used to provide liquidity to founders and long-standing investors and provides the option to conduct an IPO to the NASDAQ, the NYSE, the OTCQX or OTCQB with a more flexible and cost-effective method than traditional small-cap IPOs have allowed. Approximately 20 completed offerings have raised more than $200 mill since Jan 2016, averaging $10 mill each. Here's how to succeed with your Reg A+ offering.

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