All Companies need funding, but lately it is hard to come by…

There is a new way for companies to get the funding they need:

“Crowdfunding”

MediaShares provides a methodology for companies to get the funding they need by selling their stock on their own

Websites to their fans, customers, users, or affinity group.

We call our system a “Crowdfunded IPO”

CrowdfundingUsually thought of as getting smaller amounts of money from a large crowd of investors.

Crowdfunding in 1606 – A Copy of the World’s First Share of Stock

First Shareholders of the Dutch East India Co, A Small Crowd!

Dutch East India Company lasted 200 Years – At one point had 4785 Ships

May 17, 1792 – Buttonwood Agreement – Signed due to Stockmarket crash in March of 1792!

The Birth of the New York Stock Exchange and Crowdfunding in the U.S.A.

Tickertape - First used in 1870Enabled Communication with More Shareholders

Tickertape helped the stockmarket, but did very little for ladies fashions.

Telephone Invented in 1876 – The Crowd Got Larger

1969 – First Internet Connection

The Internet Grew!

1991 – First Online Brokerage - The Crowd Got Much Larger!

September 4, 1998 Google Incorporated

Entrepreneurs outside of the U.S. began to use the Internet for crowdfunding…

Justin Wilson, Formula One Driver, financed his Team by selling stock to his fans

Trampoline Systems, first London technology company financed by Crowdfunding

Sell-A-Band: Invest $10 online, finance the group, and get the band’s album

Online Crowdfunding in the U.S. Today:

• Crowdfunding as Donations (Exempt from SEC investment regulations):– Kickstarter.com– IndieGoGo.com– RocketHub.com

• Crowdfunding as Investments (Highly regulated):• Exchange listed stocks (Disney - 1MM shareholders)• Private investments (Secondmarket and Sharespost) • Peer-to-peer loans (Prosper, Lending Club)• Huge changes coming!

Kickstarter successes - Donations:

Kickstarter – Some huge successes:

Word got out that Pabst Beer Company was for sale

Pabst Beer and Others Proved that Crowdfunding Works

Companies could get their funding from:– Users (Twitter, Facebook, Classmates, video game

companies, – Fans (movies, celebrities, NASCAR teams)– Customers (companies with large databases)– Affinity groups (Christian groups, Organizations, Clubs,

Cable companies, or any Website with an online following)

BUT…Internet investments were still under extremely strict

regulations - SEC and FINRA

New IPO Rules in the JOBS Act

•Relaxed disclosures for EGCs (No SOX 404)•Confidential S-1 Submissions•Relaxed rules on analyst activities•“Testing the waters”•These changes are effective immediately

New category of issuers:

“Emerging Growth Companies” – Under $1Billion

Stock Trading - Perception

Stock Trading - Reality

Stock Trading - Reality

Algorithmic Stock Trading

Amount of stock trades as a percentage of the overall volume of trading:

70 % done by machines (computers)

Source: Tabb Group

IPO’s Have Become An Exit Strategy,Not For Growth Capital

• At one time, an IPO was for growth capital• Intel, Microsoft, and Apple received capital to grow• Various factors changed everything• Underwriters now looking for easy sell – high profile

companies like Facebook, Twitter• Insiders want to cash out and dump to others• “Popsters” not Investors now• Secondary Churning/Trading by machines (computers)• Growth investors are VC’s, Angels, and Private share buyers• IPO’s now come too late in the growth cycle• Crowdfunding can fix the problem

MediaShares and Crowdfunding can fix the problem…

•Direct Registration enables stock sales from a company’s own Website or Facebook Page•S-3 Filing – Shelf Offering•No need to open and pre-fund an brokerage account•Stock purchase uses an ACH checking account debit•Held in book-entry for issuer•Very small transaction charge ($1.00 to $3.00)

MediaShares Uses a System Already in Place:

Direct Registration

Simple Form to Buy Stock

QwikShares eliminates pre-funding the typical brokerage account

Stock is purchased through an ACHchecking account debit, credit card, or other electronic payment

Direct Registration Supplier holds stock in book entry for company & purchaser

Form satisfies FINRA “suitability” requirements for “know your customer”

Company gains valuable demographics on each shareholder

Company and broker now have payment info for future purchases!

Purchase as little as one share

Very small fee: $1 to $3 for transaction

Thank You!

Gene Massey

MediaShares.com 1334 Westwood Blvd. Suite 6Los Angeles, California 90024

(310) 871-3668 cellEmail: gene@mediashares.com