Vim Funding

Moving right along…

screaser — Sat, 31 Mar 2012 16:05:34 +0000

As you’re certainly already aware, we’ve moved our crowdfunding blogging over to FundingLaunchpad.com.

Our future posts here will be about company events and other information/news about the greater funding space. There are things happening beyond crowdfunding, of course, and we’ll keep an eye on those events for you.

Lots of progress since we last posted… here are a few quick highlights:

Kyle

First off, we were lucky enough to bring on Kyle Lamy as our front-end developer and all-around coding genius. Kyle just moved to Boulder from the east coast; help us welcome him to town!

We’ve been working with Phil Feigin, former Colorado Securities Commissioner, to navigate the legal and political waters around equity-based crowdfunding. Phil recently took us downtown and introduced us to the team at the Securities office, and we walked them through our plans. Great conversation, and hopefully it will lead to good things for Vim Funding.

Vim Funding recently pitched at Angel Capital Summit to a packed room… lots of interest in what we’re doing, as well as a bit of (understandable) skepticism. (How are these guys going to be the first in the nation to do this???) We placed 7th out of 40 teams in the informal “Venture bucks” contest; not bad considering I ran out of time in my pitch and had to gloss over the financial/investment part of the presentation. As soon as we start operations I think the interest will convert to investment dollars.

Our platform is getting closer and closer to ready for our first clients (once we have all the other pieces in place, of course)… check out the sweet new homepage below:

And finally, we’re getting lots of interest from potential clients, partners, and retail investors. Things are coming together and I couldn’t be more excited about the opportunity that we have in front of us — unlocking a whole new source of capital for companies in Colorado (then the US, then the world).

Cheers!
-Steve

Crowdfunding Feature: Cooking For A Purpose

dave — Fri, 20 Jan 2012 17:00:47 +0000

It doesn’t matter that he is looking to launch a 501(c)(3), Chef Michael is a true entrepreneur. Today I interviewed Mike to learn more about him, his amazing startup venture Cooking for a Purpose, and his crowdfunding experience.

After 15 years with UPS, Mike followed his passions of cooking and teaching. He attended cooking school and then ran an after cooking program at a local community center. When government funding ran dry Mike decided to pursue crowdfunding to create his own program.

Mike feels teenagers in his Bronx neighborhood face two challenges:

Both parents work and after school programs have been cut leaving kids with a lot of free time
Diabetes is rampant because kids don’t know how to shop or prepare good food – fruit and vegetable based meals that do not come out of the microwave or a fast food restaurant.

Mike is on a mission to get kids off the streets and learning a trade, specifically healthy cooking. His crowdfunding campaign will allow Cooking For A Purpose to rent a kitchen and supply materials so about 40 kids per “semester” can learn to prepare 4 course meals, 3 days a week, in 20 week sessions starting in September. Mike plans on accepting every interested kid regardless of their ability to pay for the program.

Mike was an active donor to crowdfunding programs himself so using this funding mechanism for his own startup was natural. He also believes it is powerful because his cause will strike a chord with the general public.

Mike does recognize crowdfunding is a lot of work. He spends 6-8 hours a day activating his 400 Facebook friends, communicating via Twitter, and responding to every inquiry he receives immediately because otherwise, he believes, potential investors lose interest. Fortunately for Mike, he has a large base of friends and supporters. Social networking means that those who cannot donate much can help spread the word allowing anyone to play a major role in Cooking With A Purpose’s success.

Mike realizes there are countless good causes for you to invest in. So why choose Cooking With A Purpose? Mike says he isn’t doing anything for himself. Rather, he is looking to turn kids into adults with a purpose. This project revolves entirely around doing right for the community. One unique element of Cooking With A Purpose is donors’ ability to see their good deeds in action. A video feed will allow parents and supporters to see the class in action.

The Cooking With A Purpose crowdfunding raise just starts and runs through mid-March. To learn more you can review the official crowdfunding page or email him. He promises to respond promptly.

The Ideal Crowdfunding Bill

dave — Thu, 12 Jan 2012 17:00:14 +0000

With multiple crowdfunding bills floating around Capital Hill, Funding Launchpad wants to provide our perspective on the ideal crowdfunding bill. Crowdfunding received great attention in Congress last fall because crowdfunding has the ability to revitalize America’s entrepreneurial leadership, which in turn would allow America’s startups and small businesses to create jobs.

In order to achieve this goal, any new law must delicately balance making crowdfunding a viable, attractive fundraising solution for startups and small businesses while providing appropriate investor protections. The chart below provides an overview of Funding Launchpad’s recommendation alongside a comparison of the passed and pending legislation.

Comparison of Funding Launchpad’s Recommendation and Congressional Crowdfunding Bills

Below we explain each of our positions in detail.

Crowdfunding raise cap of $1 million per 12-month period. A lower limit will eliminate the utility of crowdfunding for some organizations without benefiting individual investors.
Individual investor cap of $1,000; $25,000 for accredited investors. A lower cap would increase the cost of fundraising therefore diminish the viability of crowdfunding. A $1,000 limit, versus $10,000, encourages diversification, a best practice for reducing investor risk. Allowing accredited investors to participate at a higher dollar value increases the utility of the crowdfunding exemption without increasing the cost to entrepreneurs or the risk to retail investors.
No annual investor cap. Imposing limits on the aggregate annual investment actually increases investor risk by reducing diversification. It also creates monumental enforcement complexity for intermediaries and regulators.
Funds transferred when within declared minimum and maximum raise. Corporate fundraisers should be required to declare a minimum and maximum target, with a 25% or smaller spread. Investments, held in escrow until the raise period ends, would be released to the company if at least the minimum threshold is reached. The minimum threshold ensures enough funds are transferred to help the company execute its business need. The maximum eliminates the risk of over dilution for all parties.
General solicitation is inherent in crowdfunding. The wisdom of the crowd will generally help the best investments garner exposure and capital while guarding against fraud.
Licensed intermediaries should be required. Involving a licensed intermediary will facilitate transparency, provide scalable oversight, and reduce the possibility of fraud as the intermediaries themselves will succeed or fail based on investor reputation.
The SEC’s Integration Doctrine, allowing crowdfunding and another types of raise simultaneously, should apply. Otherwise the viability of crowdfunding is reduced.
State security agency registrations should be pre-empted. Requiring state registrations increases the cost and complexity, limiting crowdfunding to the viability of Regulation D Rules 504, 505, and 506.
Quarterly SEC filings should not be required. SEC filings could cause a significant portion of the capital raised to go towards auditors, not innovation and entrepreneurship.
Directors and officers of crowdfunded companies should not be personally liable for fraud as proposed by S. 1970. Doing so will push small businesses to more traditional fundraising tactics.

Funding Launchpad Presents at Boulder Denver New Tech

dave — Wed, 11 Jan 2012 18:02:05 +0000

Last night Brian Tsushiya represented Vim Funding (soon to be re-branded as Funding Launchpad) at one of the largest monthly front range meetups: Boulder Denver New Tech (BDNT). The crowd of about 350 was engaged in the presentation that covered fundraising options available to startups and small businesses today, the history of crowdfunding, the status of pending Congressional crowdfunding legislation, and recommended action steps for entrepreneurs. (See our blog post tomorrow that covers the state of crowdfunding legislation, and our recommended bill for startups and investors, in detail).

The audience questions and Twitter stream were extremely positive demonstrating interest in crowdfunding and Funding Launchpad’s upcoming launch. Samples Tweets include:

“Vim Funding has a petition to get crowd funding lesislation passed in the Senate. Sign! vimfunding.com/petition”
“Vim Funding looks like a very needed service made by some really experienced guys. Excited about that.”

If you missed the two previous “sold out” How Do You Raise $1M using the Internet? meetups, Brian announced a third presentation on January 30, 2012. Here is your chance for an in-depth discussion that will prepare your startup or small business to raise funds through crowdfunding. Sign up here.

Twitter Stream for Funding Launchpad Presentation at BDNT

Daily Crowdfunding Feature on Twitter

dave — Tue, 10 Jan 2012 16:09:03 +0000

Congress is talking about crowdfunding legislation and so are we! To help promote interest in crowdfunding for startups and small business, we have launched our newest Twitter undertaking, the Daily Crowdfunding Feature. (Please also note our new Twitter account, @FundingPad. An exciting new logo and website, FundingLaunchpad.com, will be unveiled soon).

Our goal for this project is to highlight the diverse nature and opportunities crowdfunding offers. Ranging from artistic to philanthropic to for profit, we scour over 50 crowdfunding platforms and present the most interesting campaigns every weekday at 2 pm Mountain time. Be sure to follow us on Twitter and prepare to be inspired.

Our first feature was Occupy Love, a documentary that dares to ask how the economic and ecological crises we face today are a great love story. And that Occupy Wall Street is really protesting that our current system is failing to provide us with health, happiness or meaning. This campaign, seeking $50,000 but ideally $100,000, is live for another month.

Another feature was Counter Culture, an Austin food trailer “relocating to a building”. A bold step for a vegan restaurant in the heart of beef country. The move allows entrepreneur Sue Davis to offer her meatless, dairy-free, and raw foods, which have earned 4.5 stars on Yelp, for more hours – breakfast, lunch, and dinner six days a week. The new location will open in Spring if this project receives another $5500 by February 1.

Entrepreneurs: Want to be highlighted in our Daily Crowdfunding Feature? Or have your fundraising efforts covered by our blog? Please contact dave [at] fundinglaunchpad [dot] com.

Recap: Crowdfunding Meetup

dave — Thu, 05 Jan 2012 17:46:55 +0000

Last night, Brian Tsuchiya and Steve Reaser presented their second meetup on crowdfunding. One thing is clear… The startup and small business community is excited about crowdfunding and the potential passing of the Entrepreneur’s Access to Capital Act. There were 75 attendees last night following 60 in December. The audience was knowledgeable which led to a very interactive discussion.

Here are some of the topics Brian and Steve covered:

The broad range of funding tactics currently available to entrepreneur’s
Crowdfunding history
The status of pending crowdfunding legislation, which they believe will pass, it is a matter of when and the exact terms
Examples of recent successful crowdfunding campaigns ranging from politics to artistic projects to for profit businesses
Tips for crowdfunding in today’s landscape

Brian and Steve suggested two actions steps for entrepreneurs:

Most importantly is to proactively share your support for crowdfunding with Congress by signing Vim Funding’s petition and contacting your Senator. (Our own Colorado Senator Michael Bennett introduced a crowdfunding bill which is more concerned with avoiding fraud than helping entrepreneurs create jobs).
If you want to be one of the first to successfully raise funds when (not if) the new legislation passes, The Startup Guru and Vim People is offering a 12-week course that will prepare you for success.

A special thank you to Wendy Norris from tekhne and all of our attendees for supporting startup and small business community.

Here are the visuals from last night’s presentation.

Crowd Investing 101

screaser — Tue, 03 Jan 2012 23:14:19 +0000

Crowd-Investing: A Whole New Type of Funding

A new way to raise funds for your business is on the horizon — here’s what you need to know about the upcoming crowdfunding exemption.Crowdfunding simply refers to the process of raising money from a large group of supporters; usually through small donations per contributor. Crowdfunding has been used quite successfully in this country to support charitable causes (FirstGiving, Kiva) and creative projects (Kickstarter). Over half a million projects worldwide have been funded through crowd-funding, and the number of successful campaigns is growing rapidly.

In countries like the UK, crowdfunding has also emerged as a viable source of capital for startups and small businesses. That is not yet an option in the US because of our securities laws — but that is about to change. Soon you will be able to invite your loyal customers to become part owners in your company, raising a significant amount of capital for growth in the process.

A bill was recently passed by the U.S. House of Representatives which would allow businesses to use crowdfunding to raise capital in exchange for debt or equity. A similar bill is under consideration by the Senate, and the White House hasexpressed their support for the initiative.

How will crowd-investing work?

You will essentially craft a campaign on a new dedicated crowd-investing site, provide relevant information to potential investors about your company, and then spread the word via social media and other tools. If investors like what you say, they commit via the website. At the end of your campaign if you have met your target investment amount the crowd-investing site will finalize the investments and send you your money, less any fees.

A look at H.R. 2930 and S. 1791

House Bill 2930, which was passed on 11/3/2011 by a margin of 407 to 17, outlines the following key provisions for raising investment capital through crowdfunding:

Up to $1 million may be raised in a 12-month period, or up to $2 million if audited financials are provided to potential investors.
Companies raising funds through crowdfunding may use social media, general advertising, and other similar means to spread the word to prospective investors.
An investor may invest up to $10,000 or 10% of their annual income (whichever is less) in an individual offering. Investors do not need to be “accredited”.
Crowdfunding-round investors would not count toward the 500-investor threshold at which companies are required to go public.
The issuer must state a target amount, and then must raise at least 60% of that amount for the round to occur. If the 60% threshold is not reached then no funds change hands.
A licensed intermediary may be used to execute the transaction. Intermediaries shall be required to warn of the risky and illiquid nature of these investments, take reasonable steps to reduce fraud, carry out a background check on the issuers, maintain records per SEC rules, and shall not offer investment advice.
State securities laws are preempted in this type of offering, which means that pre-registration of offerings with state agencies will not be required.
Raising money through crowdfunding will not prevent you from concurrently raising funds through other existing mechanisms.

Senate Bill 1791 outlines a similar crowdfunding exemption, with a few important differences:

The per-round limit is set at $1 million, and the per-investor limit is capped at $1000.
An intermediary will be required, not optional.
The state rule-making authorities will have more of a say in registration and other requirements.

What does all this mean for me?

We have been following this legislation closely. The most likely outcome is that very soon, you will be able to raise up to $1 million for your business through crowdfunding, up to $1000 at a time. You will need to use a licensed intermediary for your offering, and the costs, restrictions, and paperwork associated with a crowdfunding offering will be very reasonable — less than many other current options.

In addition, tapping into the power of your network via crowdfunding can be a great way to gain exposure for your growing business!

Is crowd-investing right for my company?

As with any crowd-funding campaign, your biggest asset is your established fan base. A large and engaged following — both on social sites and in the real world — will give you the best chance of successfully raising a round through crowd-investing. There will be a limit as to the amount each investor can contribute to your campaign; likely to be between $1,000 and $10,000; so it takes a crowd to fund a large round.

What can I to do help?

As with any proposed legislation, your voice can make a difference. Please consider contacting your Senator and letting them know that this legislation will make a difference to you as a business owner. You can also sign our petition to express your support.

Crowd-Investing is Coming

screaser — Fri, 02 Dec 2011 21:48:32 +0000

These are exciting times for entrepreneurs and small business owners.

Working it’s way through the legislative process is a bill that will allow anyone to invest in private companies through crowd-funding platforms. Currently the average investor only has access to publicly traded companies — that its, any company listed on the major stock exchanges. Private companies like Facebook are currently not accessible to the average citizen; nor were companies like Apple, Google, etc back in their infancy. Only “accredited investors” with connections have access to these companies — but that is about to change.

H.R. 2930, aka the Entrepreneur Access to Capital Act, states (don’t worry, I’ll clarify this):

[blockquote]Entrepreneur Access to Capital Act – Amends the Securities Act of 1933 to exempt from the prohibitions against use of interstate commerce and the mails for sale or delivery after sale of unregistered securities, including unregistered security-based swaps, any transactions involving the issuance of (crowdfunded) securities for which: (1) the aggregate annual amount raised through such issue is $5 million or less; and (2) individual investments in the securities are limited to an aggregate annual amount equal to the lesser of $10,000, and 10% of the investor’s annual income. Authorizes an issuer to rely upon certifications provided by investors. Amends the Securities Exchange Act of 1934 to exclude persons holding crowdfunded securities under this Act from application of “held of record” requirements with respect to mandatory registration of securities. Amends the Securities Act of 1933 to exempt such crowdfunded securities from state regulation of securities offerings.[/blockquote]

A senate version of that bill (S. 1791) is under consideration by the Senate Committee on Banking, Housing, and Urban Affairs.

There are some major differences between the bills, but our best guess is that beginning in Spring 2012, companies will be able to run a Crowd-Investing campaign to:

Offer a stock or debt investment in their company to everyday investors
Spread the word about this offering using social media, traditional ads, shouting from the rooftop… anything.
Raise up to $1,000,000 per 12 month period (possibly more; depends on the final bill)
Accept up to $10,000 from each individual investor
Have unlimited number of small investors without the need to go public
Tap into the power of your tribe to help grow your business!

Upcoming posts will get into more of the details of the crowd-investing process and the pros and cons of this type of investment.

We are truly excited about the positive impact that this new source of capital will have on the entrepreneurial and small-business ecosystems in Boulder, Colorado, and the USA as a whole. Want to help make sure this legislation passes? Please sign our petition!

Got any questions about crowd-investing? We’d love to hear from you!

Seeking Co-Founders

screaser — Mon, 28 Nov 2011 15:08:02 +0000

Greetings! I hope that everyone survived the official start of the holiday season; only ~35 days left until normalcy resumes.

Big news — we’re looking for 2 more co-founders to round out our core team. If you are interested in building a company from the ground up and think you are a match for our team, we’d love to hear from you!

Check out our job listings for more information… and if you know someone who would be perfect for one of these roles please do spread the word.

Cheers,
-Steve

Two Critical Crowdfunding Components: Message, Tribe

screaser — Fri, 25 Nov 2011 15:37:39 +0000

Kanini Mutooni posted a great article yesterday entitled “Crowdfunding 101: 5 things to keep in mind before you launch a successful crowdfunding site“.

I especially wanted to touch on the first 2 points of the article:

1. Find a resounding theme that creates passion

Important, indeed. You are already passionate about what you are doing, otherwise you wouldn’t be doing it (right??).

When building and launching a crowd-funding campaign, part of your job is to find a compelling way to help others catch a little bit of that fire.

What about your project will change the world for the better? Why should someone not only participate but run out and tell 5 of their friends? What about this campaign will give participants a warm glowing feeling every time they look back on it for the next 10 years, as well as making them smarter and more attractive to potential mates?

Yes, I’m being a bit flippant, but the underlying point is still valid: it is up to you to come up with a message that resonates with potential investors. Help them catch the fever that is driving your business, and you will have a successful crowdfunding campaign.
2. Create a community before you launch the site

This should go without saying, but a surprising number of people do not follow this advice. The idea that you throw something up on a site like Kickstarted and just lean back is utterly, mind-blowingly wrong.

Take some time before your campaign goes live (30-45 days is a good rule of thumb) to build your tribe and stoke their excitement for what you are creating together. Reach out to some of your biggest fans personally — a few active cheerleaders with connections can work wonders. (An upcoming post will talk about this further.)

Hope everyone in the US had a good Thanksgiving yesterday. Despite our food-induced coma we’re excited to be back in the saddle getting things ready for our big launch in the spring.

Cheers!

-Steve