Equity crowdfunding. Retail investing. Bitcoin. Robinhood. GameStop. Short sells.
Investing is a fast-paced business. The creation of Equity crowdfunding and the ever-evolving opportunities it presents to investors is intoxicating if not a bit difficult to keep up with. Public Yield is your source to learn about investing, equity crowdfunding and exciting startup opportunities.
Equity Crowdfunding 101
Not long ago, to be eligible to invest in a company, you had to have a specific list of credentials and a whole lot of money. Entrepreneurs had to appeal to accredited investors in order to build capital and set their businesses in motion. This all meant that if you were an entrepreneur unable to attract some of these bigger players, or a wannabe investor without the mandatory reputation and cash, your investment and capital raise options were limited to nonexistent. Until the creation of equity crowdfunding.
There are nearly 6 million businesses in the US, and the majority of these companies have difficulty accessing capital through traditional markets. When the JOBS Act was passed in 2012, equity crowdfunding was born. Wealth is no longer a pre-requisite to be an investor and businesses can crowdsource their initial investments from anyone and everyone. Equity crowdfunding provides unique opportunities for startups and private companies to attract like-minded investors who, in addition to providing monetary funds, become loyal brand ambassadors of the businesses they back. It also opens the door to allow almost anyone to be an investor, regardless of wealth. Equity crowdfunding can be divided into two sections: Regulation crowdfunding and Regulation A.
Regulation crowdfunding and Regulation A
Regulation crowdfunding enables eligible companies to offer and sell securities through crowdfunding via online transactions. This isn’t your typical GoFundMe fundraising. As the name states, this crowdfunding is regulated by the SEC and allows companies to raise up to $1.07 million a year.
Regulation A, frequently dubbed the “mini-IPO”, requires much more documentation but allows companies to raise up to $50 million a year. Many startups and private companies opt for Regulation A because it requires less red tape than a traditional IPO but allows them to make a lot of cash. Reg A is an efficient means to raise capital and simultaneously allows a business to attract fans, customers, clients and followers.
Public–Me. You. Anyone. Everyone. Investing is no longer a clubhouse for a specific few. Equity crowdfunding is investing for the crowd, and without wealth restrictions, almost anyone can be an investor.
Yield–You know the old adage. High risk, high reward. Startups and private companies are attractive investments because there’s an opportunity to own big shares of the company and potentially make a lot of money. There’s also the chance you’ll lose your shirt.
That’s why we started Public Yield. Investing in startups is an exciting business, with real opportunity to make real money on businesses we actually care about. But it can be difficult to know where to begin. The best investor is the informed investor, and Public Yield Capital is your source to learn more about investing and discover exciting startup opportunities.
Much like a prospectus for public markets, an Offering Memorandum is a document used for private markets. This document is more or less a detailed business plan, which helps investors understand the opportunities and shortfalls of the investment being presented.