NowStreet’s Capitalizing on Financial Innovation Webinar Series

Preparing Issuers for equity-based Crowdfunding April 25th 1pm to 2pm EST

Rewards-based vs. Equity-based Crowdfunding – which is right for your business?

Protect your IP when Crowdfunding

Get compliant for equity Crowdfunding

The “Preparing Issuers for equity-based Crowdfunding” webinar is ideal for any

company seeking to raise capital via the imminent crowdfund exemption as well as any

professional guiding new crowdfund issuers such as investment bankers, investor-

relations professionals, brokers, emerging portals, CPAs and attorneys.

Moderator: Dara Albright, Founder, NowStreet – Panelists: * Liz Kulik, CEO and co-founder of donation-

and equity-based crowdfunding incubator ProHatch; *Mary Juetten, Founder of Traklight; *Ruth Hedges,

CEO of Funding Roadmap

Dara Albright, Founder of NowStreet Twitter: @nowstreet

www.nowstreetjournal.com dalbright@nowstreetjournal.com

http://facebook.com/nowstreetevents

Liz Kulik, CEO and co-founder of donation- and equity-based

crowdfunding incubator ProHatch, will provide:

•Key differences between equity and other forms of crowdfunding,

•An overview of the latest developments in equity crowdfunding,

•Tips for ways issuers can begin preparing for their crowdfunding

campaigns,

•Concrete steps to ensure issuers are ready to hit the ground

running once equity crowdfunding goes live

The Challenge

Social impact, business and community

entrepreneurs struggle to find access to capital.

The Solution

Crowdfunding is people to people capital

powered by socially networked broadcasting.

Ma

rk

et

Po

te

nt

ia

l

US $300

Billion

Global $1

Trillion % Growth/Year

$ Growth/Year (millions)

Segments

$1,470

61% 72%

115%

91%

274%

Source data from Crowdsourcing.org / Massoultions, Halo Report and National Venture Capital Association

• 40+% of the projects posted on crowdfunding

sites get funded

• 2.84 weeks on average to raise first 25% of

funding goal. 3.18 weeks on average to raise

last 25% of funding goal

Experts Predict $300 Billion market in the US

in donation, reward, equity & lending

Does a Crowdfunding Strategy Fit?

Non-financial rewards are offered

in exchange for a contribution.

Returns are experiential & exciting

from thank you notes to pre-sell of

first run production or a cameo role

DONATION

Non-Financial Returns

Tax deductible contributions to

501(c)(3) organizations, All other

business & personal project

contributions from personal funders

are taxable income to the funded

entity, Returns are intangible

Subject to pending SEC regulation, the

general public (accredited and non-

accredited) can invest in the

securities of small businesses and

startups qualified to list on registered

BD/Portals, w/a variety of economic

return strategies including stock sales,

refinancing exits, dividends &

customer-owner discounts

Micro-finance, peer to peer, local bank

lending models prevail, with

conditions for application based on

commercial or impact lending that

range from a structured pay-back

w/and w/o interest over time.

REWARDS

Non-Financial Returns

EQUITY

Financial Returns

LENDING

Financial Returns

Title 1

Reopening US Capital

Markets to Emerging

Growth Companies

IPO on-ramp for private cos. w/<$1b revenue, 2 yrs financials,

exempt from Dodd-Frank & financial controls audit requirements,

decreased Sarbanes/Oxley compliance requirements

Title II Access to Capital for Job

Creators

Lifts Reg. D/Rule 505 & 144A ban on general solicitation and

advertising, allows internet access to accredited investors

Title III Crowdfunding Registration exemption for start-ups and small companies raising

up to $1m/year/entity

Title IV Small Company Capital

Formation

Increases the amount of capital that can be raised under a Reg A

exemption from $5m to $50m

Title V Private Company

Flexibility & Growth

Mandatory threshold for private co registration raised from 500

shareholders to 2,000, as long as less than 500 are non-

accredited

Title VI Capital Expansion

Raises the holders of record numbers required for SEC

registration of non-listed bank or bank holding companies from

500 to 2,000 and lowers the number of holders of record

required for deregistration from 300 to 1,200

Pioneering JOBS Act Legislation

INVESTORS

Limited in the amount he or she may invest in the crowdfunding securities in any

12-month period:

• If either the annual income or the net worth of the investor is less than

$100,000, the investor is limited to the greater of $2,000 or 5% of his

or her annual income or net worth.

• If the annual income or net worth of the investor is $100,000 or more,

the investor is limited to 10% of his or her annual income or net worth,

to a maximum of $100,000.

ISSUERS

The aggregate amount sold to “all investors”, may not exceed $1 million in any

12-month period. Transactions made through a broker dealer, or through a

“funding portal” (a new designation under the Securities Exchange Act of 1934)

which meets SEC requirements. Issuers must comply with the disclosure and

other requirements that will be fully clarified when rules are promulgated by the

SEC and FINRA.

Title III Crowdfunding

“Must Haves”

Company must be registered and incorporated in the US

Names of the Directors, Officers, and any Shareholder with more than 20%

ownership

Business description and anticipated business plan

Financial statements with varying levels of attestation depending on the

amount of capital being raised;

• $100,000 or less, tax returns and financial statements certified

by principal executive officer • $100-500,000, reviewed financial statements • $500,000 or more, audited financial statements

Goal for capital raise and target dates

Planned uses of capital raised

Share price and methodology for determining share prices

Detailed information on ownership and capital structure, including terms for

the shares being offered under crowdfunding

Terms of any other outstanding shares and the differences between those

outstanding and those being offered

Progress reporting required

• Enterprise Model & Implementation Plan

• Entity structure (corporate, 501c3)

o Legal

o Accounting

• IP / online exposure

• Future funding and exit strategies

• Disclosure, Documentation and Due Diligence

• Brand value

• Social marketing commitment

• Content/Story/Digital production

• Follow through (fulfillment, reporting, funder communication)

Consider the Impact of Crowdsourced Capital

Prepare for Equity

• Equity, following JOBS Act rules is expected in Q3/2013 to

complete the Crowdfunding donation/reward/equity/lending

capital ladder.

• Equity issuers have time to strengthen offerings and valuation,

develop campaign strategies, and increase networks.

• In the meantime, Rewards based campaigning is an immediate

option that provides capital loyal customers, brand awareness,

media attention, market testing, etc. directly with consumers,

and without sacrificing ownership.

Thank you for participating in the webinar. To listen to a replay

please visit: https://www.brighttalk.com/webcast/9407/72505

We also hope to meet you in person at the 2nd Annual Crowdfunding

Convention & Bootcamp

www.crowdfundingroadmap.com/bootcamp

Save $25 use the coupon code: nowstreet