Crowdfunding for startups can be confusing for the uninitiated… but it doesn’t have to be.
Equifund CFP is our newly launched equity crowdfunding platform that connects young companies looking to acquire crucial seed capital for early-stage development, with investors keen on buying equity in companies at their earliest financing stages – when they have the greatest potential for future growth.
In the past, these companies could only access capital from wealthy individuals known as “accredited investors”.
However, with the signing of the JOBS Act in April 2012, and the adoption of Title III of the JOBS act known as Regulation Crowdfunding (Reg CF) which came into effect in May 2016, eligible companies are now allowed to raise capital from non-accredited investors for the very first time.
More importantly, everyone – regardless of net worth or income – can participate in the early capital raising activities of startup and early-stage businesses through equity crowdfunding.
Regarded as an excellent fundraising option for new issuers or early-stage companies with lower valuations, Reg CF is a securities offering that is similar to a Kickstarter campaign. Companies can raise funds online from the crowd through an exclusive crowdfunding portal (like Equifund CFP), but instead of rewards-based crowdfunding, these companies can use securities-based crowdfunding to offer and sell stock to investors.
Under a Reg CF offering, eligible early-stage companies are now allowed to raise up to $1,070,000 from retail investors every 12 months.
Crowdfunding for startups has completely changed the game for small businesses that were previously barred from raising funds from non-accredited sources.
Successful Reg CF raises not only help startups realize their goals much faster than self-funding ever did, but it also puts entrepreneurs in touch with their target market instantly. As brand-new companies begin developing their ideas into products and services for market, the speed at which they raise funds and the exposure they receive can be crucial to their early stage development.
Equifund CFP is an industry-leading platform that was built to specialize in Reg CF offerings.
By targeting our community of members, early-stage companies can gain significant exposure to a powerful audience of early investors, raise funds at an affordable cost of capital, transform their business ideas into reality, and build momentum to attract further investment down the road.
To see if your company is eligible for a Reg CF offering, please visit our FAQ section on our website.
New SEC regulations ensure that anyone can now invest in a securities-based crowdfunding offering. However, there are several other important features of Reg CF that investors should be aware of.
For example, companies are required to disclose important information that will help you determine if a particular investment is appropriate for you. This includes pertinent information about the business, the company’s officers and directors, what the funds are intended for, financial information, related party transactions, risks specific to the company, and more.
With Equifund CFP’s simple user interface, all of this information is easily accessible as you browse through our list of offerings. Keep in mind, only the best and most transparent companies make it through our extensive due diligence process.
Also, individual investors are limited in how much they can invest during any 12-month period. The limit is dependent on a person’s net worth and annual income.
These limits protect investors from downside risks but they also allow investors to gain significant exposure to the upside potential of early-stage investments.
Also, investors should be aware that securities purchased in a crowdfunding transaction generally cannot be resold for a period of one year, unless certain conditions are met.
But while all of these rules and regulations surrounding Reg CF offerings may seem complicated, you can rest easy knowing that Equifund CFP has made the process of crowdfunding for startups as simple as possible. Our goal is to do all of the heavy lifting so investors can spend more of their time evaluating opportunities and ultimately make better investment decisions.
With our state-of-the-art platform, investors gain instant, front-of-the-line access to highly-curated companies at the earliest financing stages of their life cycles – before they transition into the rapid growth phase. Join today, and you can help promising new companies build and grow their ideas and help transform them into reality.
For a more in-depth explanation of how to participate in Reg CF offerings as an investor, please visit our FAQ section on our website.
Here at Equifund, we feel that high-risk, high-reward, alternative assets have an important place in every diversified portfolio, and so we’ve made crowdfunding for startups as simple, straightforward, and seamless as possible for both companies and investors.
Equifund CFP is the first FINRA-registered crowdfunding portal to be based in Canada, with access to the full North American market.
If you are a company or an investor that’s interested in Equifund CFP – the industry-leading platform that’s revolutionizing crowdfunding for startups – we invite you to join our community today.
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