BatteryXchange-surpasses-50percent

BatteryXchange just launched a month ago, https://localstake.com/businesses/batteryxchange/preview, and has already raised over 50% of their target minimum investment.  

One of the best things they've done is opened up access for ANYONE to invest and financially benefit if their business is successful.  

During their market testing, 85% of 100+ businesses surveyed (mostly bars, breweries, restaurants) asked for their mobile chargers.  They ran 1 day pilots with over 25 venues and had over 1000 paying customers. BatteryXchange provides an on-the-go mobile charging solution for cell phone users to stay connected to the people and things that matter to them most.  They are raising investment capital to make their kiosk self-servicing, meet current customer demand, and grow into new geographic markets. 

Check out their campaign at https://localstake.com/businesses/batteryxchange/preview

1st Time Investor in Startups and Other Private Businesses

Does Investing Have to be Scary?

About Will McGuire

We were asked to write this post by several individuals who had questions.

Investing doesn't have to be scary.  I got into this space to help create a world for my community, my kids and other people's kids that didn't exist.  I want them as members of the community to literally be able to invest in private businesses and startups in their community.  This involves educating a large part of the population that has never had access or didn't know they had other options outside of the publicly traded stocks, mutual funds, etc. listed in their brokerage and/or retirement accounts.

Most individuals I meet are at least curious about this new world that has recently been enabled by new investing laws and regulations.  So this post is devoted to all of you who are new to the early stage / private business investing process and would like to learn more.  

Not Investment Advice The following is not meant to be investment advice or an exhaustive list of what to look for in an investment.  It is also not meant to be a detailed list of what all of the terms mean.  Rather it is meant to be a starting point for someone new to the process of investing in startups and private businesses to help point them to where they can get answers to their questions.


Is this safe?
We partnered with a Broker-Dealer platform to form Localstake NC, because as a Broker-Dealer, they are regulated by the SEC and FINRA.  

• Localstake facilitates the raise process in a way that complies with all laws.  
• As an experienced and trusted partner, they've helped multiple businesses successfully complete offerings.
• All investor information is safely stored on their platform and transactions are conducted digitally (e.g. signing deal docs, transferring investment dollars, etc.) ...meaning it's very similar to your other brokerage accounts. 

While investing in this way carries a high degree of risk, including the possible loss of all capital, it also comes with the potential benefits of the following:

• Potentially higher returns than the stock market
• Opportunity to invest directly where you live
• A method to diversify

Never invest more than you are willing to lose and seek guidance from your tax and/or legal counsel to help determine if this type of investing is right for you.


What am I investing in?
You're investing in a small team's ability to form and execute a business plan.  

• Get to know the team through the profiles they create online
• Others in the community may know the team members and can provide recommendations
• Look at the 'traction points' for what the team has already achieved
• See what their plan is for the future

Don't expect to see a business's "secret sauce"... those items that are strategic to its growth that if revealed would provide a competitive disadvantage.  However, businesses are required to list factual data and many state their plans or projections with assumptions.

Additionally, Broker-Dealer platforms such as Localstake NC are required to perform background checks on directors, officers, key management team members and anyone with significant ownership.  While this doesn't provide a gauge on a team's ability to execute, it does provide a level of vetting.


How will a business become profitable?
This is a loaded question.  Let's start with the following.  

• What kind of product or service is the business selling?  
• Who are they selling "it" to?  
• Are people buying because of a need or a want?  
• What is the price point they are selling "it" at?  
• How many "its" do they have to sell in order to become profitable?

The good part to investors is that all of these data points and more are typically answered by the business's team on the investment campaign profile they create on Localstake NC.  If they don't have an answer to your question listed in the campaign material, no problem.  You can ask it directly in the Discussion board which gives the team you are considering investing in a place to answer the question, and the answer can also be seen by other potential investors.


What is my potential return?

Businesses can offer equity or debt.  Why a founding team chose one or the other to offer is typically a matter of what will pass the Broker-Dealer's Underwriting legitimacy test as well as a business's strategy, philosophy and type of business.

Equity is used so that you own a piece of the company.  There is little to no obligation for a company to owe you anything as an investor if the company fails.  You are investing in the long term growth of the company (shared risk) which if they take off, could be big to you as an investor.  For example, if you invest at a $5M valuation, and then the business is sold at a $50M valuation at exit, you get a 10X return on investment or ROI. (less any administrative fees)

• Common or Preferred Shares/Units - Direct ownership upon purchase.
• Convertible Note - A type of debt which can convert to equity at a discount.
• Simple Agreement for Future Equity (SAFE) - You invest in the company now, and your investment will be converted into equity at a discounted valuation when a future equity raise occurs.

Debt is typically used to fund short term (usually 1 to 5 year) needs.  However, there are exceptions to this which are beyond the scope of this article.  When you loan the company money via a debt offering, you aren't listed on the cap table and don't own a piece of the company.  You are agreeing to provide capital and expect to be paid back regularly over time.

• Loans/Promissory Note - e.g. invest and receive X% interest (typically 8-15%) annually, principal and interest is repaid monthly or quarterly
• Revenue Share - return paid as a percentage of actual business revenue e.g. invest $X and receive 1.5X your investment over Y years (typically 3-5) paid monthly or quarterly 
• Convertible Note - Typically pays any principal + interest at the end of the note's term (1-3 years is usual) usually upon investor request OR this interest is added to your principal investment amount upon conversion to equity (e.g. conversion event = usually upon the note's term, sale of company, subsequent raise of $X amount, etc.)

Startups or High Growth Ventures typically issue Equity.  Main Street Businesses typically issue Debt.


So where does that leave us?

We're here to help.  We enjoy providing education to new and existing investors.  Investing doesn't have to be a daunting process.  

We know we couldn't answer everything in this post, but we appreciate answering questions.  Check out our Invest and Get Funded pages as well as other areas of our site.  Feel free to send us your questions, hello@crowdfundnc.com.  Your question and our answer may end up on our site with your permission, so by asking, you're helping out the next person too.

BatteryXchange is live

BatteryXchange has officially launched their investment campaign 

BatteryXchange provides an on-the-go mobile charging solution for cell phone users to stay connected to people and things that matter to them most. Check out their campaign at 

https://localstake.com/businesses/batteryxchange/preview 

and learn even more by signing up for a free investor account on Localstake’s platform.

Wait! Are you telling me that I can literally take $500 and...

Imagine a world where almost all individuals in the community have the opportunity to invest in almost any business in their community...  Wait! What...?

About Will McGuire

Our Community is Innovative
The concept is so foreign yet strangely familiar.  We pass the buildings and bustling entrepreneurs in our communities.  They and their teams serve us coffee as we sit at tables made by a company built by entrepreneurs, while looking at our email, calendar, and news feeds on our phones...apps, phone components, and even the digital data that transports the communication...all made by entrepreneurs.  Did you know several of the innovators who developed the tech we all use reside right here in our state?  

Everything we use to live out our day to day life was at some point created by someone who had an idea and turned it into a business.  Most of these entrepreneurs will need to seek funding at some point in time beyond what they can provide themselves.  That's where trouble seems to start for several entrepreneurs, but they have an incredible asset directly in front of them and most have no idea it exists.  

Do you know what it is?


It's You...
...and me and potentially everyone in the community.  

I was invited to perform a lunch and learn educational session at a co-working location near Charlotte.  In these settings I give people the disclosures that I'm not an RIA, attorney, etc. so I can't provide them or anybody else investment or legal advice.  My job is one of education to businesses, investors and the partner network which serves both.  It's always neat to see individuals in these sessions connect the dots.

In the middle of my session one of the attendees said [ I'm paraphrasing a bit] 
"Wait! Will, are you telling me that if one of the potential high-growth businesses in our co-working space puts out a public offering, I can see that offering from my cell phone and literally take $500 of my money and invest in them?...and if they really take off, I have the potential for VC-like (Venture Capital) returns?"   
I responded,"Yes, the opportunity is now possible...and it's not just high growth ventures. Its also 'Main street' businesses like the coffee shop you love, the brewery you visit, the restaurant or other store that you go to. These all have the potential opportunity to raise capital from anyone." 
Her response:  "That is so cool.  I never knew I had the opportunity to do that, but it makes so much sense.  Why hadn't we been doing this before?"
My response: "Exactly what I said when I 1st learned about it 3 years ago.  Your response is similar to many others I've spoken with once they hear this is possible."


It became possible a little over 3 years ago
Entrepreneurs now have the ability to seek capital from anyone, starting with those who know, love, like, and trust them.  It doesn't matter if who they know are 'accredited investors' or not.  

Businesses can seek capital from wealthy investors and everyday investors using a variety of offering types, providing them the opportunity for returns assuming the business is successful.  Real Estate, "main street" businesses and yes, even  potential high growth startups can raise capital from their crowd.  

Individuals with various risk profiles have the opportunity to find investments tailored to their preferences.

• Regular Pay Back Potential:  Businesses offering revenue shares at 1.5x or 2x returns, or real estate with dividends may be attractive to individuals who prefer investments that offer to pay them back regularly.  Businesses may also offer a perk to make the investment more attractive and to market their business.
  
  Example: A food truck, brewery or boutique may offer a 1.8x return + perk where for a $500 investment the investor gets 10% off the entire purchase once a month when they bring in their friend.
  
  I won't dive into all of the mechanics of how revenue shares can be use by all types of businesses, but just know they are incredibly flexible.
    
• 5x, 10x, 100x, 200x+ Multiplier Potential: If another person prefers high potential gains (high risk), they might prefer to invest in potential high growth startups. 
  
  Example: If the next potential Unicorn offers a public raise early on when their valuation cap is say $5M and Exits/has an IPO at $1B valuation 7-10 years later, the investor shares would be worth $20,000 for every $100 invested. 
  
  A Unicorn (company with valuation of >=$1B) is a rare find, yet the opportunity exists. We have companies across our state who have achieved those types of valuations and also have several who never become Unicorns but still provide the potential for 5x, 10x, and other high multiple returns.

In either case, 

• Businesses have more options to source capital than they did before.  
• Individuals have more opportunities to invest in businesses who have the potential to provide them returns they didn't have access to before.

Anyone who gets into investing in this way needs to know that investing is very risky and no one should ever invest more than they are willing to loose because there is never a guarantee for any return.  

So what world are we creating?
We're creating a world where almost all individuals in the community have the opportunity to invest in almost any business in their community, from their favorite places in town to visit to the potential next high growth startup.  People have the opportunity to literally shape their community by the businesses they invest or don't invest in.  They have the opportunity to the potential returns from the growth of their community.

I hear from people everyday that they want to be connected to the community where they live.  They want to live in communities where they raise their families together with their neighbors who become friends... or even if they don't have kids, they want to experience life together with their neighbors who become friends.  They want to give back.

Most just never knew that they could be even more vested where they live simply by investing in businesses in their community. 

So this brings up a very important question...
"What is your why?"...  In my opinion, it's the most important question I ask every founder.  So it's only fair I share My Why.  My Why is I want to create the world I want future generations to live in... for my kids, my friends' kids and others in my community, including those I'll never meet.  I want them to have the opportunity to do the same, simply by investing in those they know, love, trust and who are creating something of value that is sustainable in every sense of the word.  To me that's community.  At the end of the day, Margin = Mission.  

What's your why?

You can invest in startups and private businesses, you just don't know it yet.

By Will McGuire

About Will McGuire

New laws are in place that allow anyone to invest in startups and private businesses through a process called  Investment Crowdfunding.  Now everyone has the opportunity to invest, but most are not aware of what this means or how it works.  Listen in to the Charlotte Angel Connection podcast as we discuss the potential benefits of Investment Crowdfunding with William Bissett. 

• Why was CrowdfundNC started?
• How does Investment Crowdfunding help solve the "lack of access to capital" problem?
• What is Investment Crowdfunding?
• How can anyone be an investor in early stage ventures and their favorite business around the corner?
• How do businesses who want to raise capital benefit from Investment Crowdfunding?
• How does Investment Crowdfunding make the raise process easier for accredited investors?
• How does Investment Crowdfunding make it easier for greater participation from potentially all individuals?
• How does the overall NC entrepreneurial ecosystem benefit?

These questions and more are discussed in the podcast.

Legal Disclaimer
This post is for information purposes only and should not be regarded as a recommendation of, or an offer to sell or as a solicitation of an offer to buy, any financial product. Such offer will only be made by means of formal offering documents and other definitive documentation, and any potential investor should read such documents carefully, including all of the risk factors relating to the investment, before investing. Investments involve a high degree of risk and those investors who cannot afford to lose their entire investment should not invest. Investments May Lose Value - No Guarantees - Securities and Investments are not FDIC Insured.

Regulation Crowdfunding (Reg CF) Marketing Do's and Don'ts

By Will McGuire

About Will McGuire

In this new world of businesses using media and technology to raise capital from both accredited and non-accredited investors, what are the legal compliance rules for companies, team members and their marketing and sales agents when preparing for and conducting a Regulation CF offering? 

- Who can you talk to?
- What can you say?
- When can you say it?
- Where can you say it?
- How should you say it?

By watching this recorded webinar by Innovate Capital Law, CrowdfundNC, and Localstake you can learn more about the do’s and don’ts of raising capital using SEC Regulation CF. 

Note, this webinar is a general educational event and does not constitute legal or other advice tailored to any specific person or offering. Consult an experienced securities attorney to advise how the principles discussed in the webinar apply to your business and offering. 

Click here to watch webinar. You may be requested to register first to watch.

For more information please contact
Benji Jones, Cofounder
Innovate Capital Law
email: benji@innovatecapitallaw.com

Will McGuire

CrowdfundNC.com

email: info@crowdfundnc.com

CrowdfundNC Welcomes Sumit Vohra as an Advisor

By Will McGuire

Sumit Vohra, a very successful entrepreneur, advisor, board director, investor, and technologist joins CrowdfundNC's Advisory team and will be serving an active role in advising the startups and Main Street businesses we support.

Sumit Vohra

Sumit is the Founder, CEO & Chief Drinking Officer at Lonerider Brewing Company which is the largest custom brewery in the Triangle and operates in several states and the UK.  He also serves as Chairman of Lonerider Spirits.

Sumit is a Board Member for several companies and organizations, and mentors founders at startups in NC.  He is an avid technologist, with deep programming and technical program management experience.  He's also an incredible team builder and recognized leader working to generate long lasting impact on his community.  

See our About page for more information on Sumit's expertise.

We welcome Sumit to the CrowdfundNC team and look forward to his valuable advice and experience as together we serve entrepreneurs and investors in our community.

What We Can Learn From These Interesting Investment Crowdfunding Campaigns on Localstake

By Will McGuire

We often get the question "Can you show me some examples of how investment crowdfunding works?" And we always advise potential crowdfunders to take a look at campaigns that are already up and running and are getting funded to see what works well.

About Will McGuire

Here are a couple of interesting investment crowdfunding campaigns that are currently running on the Localstake platform. The first one is a distillery called Ogdens Own. See the campaign here:
https://localstake.com/businesses/ogdens-own/preview

This company has received commitments of $2M from investors, surpassing their max goal of $1.9M. In this case, they are selling equity in their company, and using a crowdfunding exemption that allows anyone to invest as well as an exemption which only allows accredited investors.  They compiled an excellent profile and story on Localstake, and used a great marketing campaign to explain why their community would want to invest in the business. As a result, they have received many investments from their loyal customer base and community.

The second one is for a real estate cooperative in Michigan called Commongrounds Cooperative. You can see the campaign here:
https://localstake.com/businesses/commongrounds-cooperative-cf/preview

This is another example of appealing to the community for funding of a new venture. In this case, the community will benefit from having a cooperative real estate venture where small businesses can rent space, and also participate in the value generated by the cooperative over time. This raise additionally provides the investor with the ability to opt for a full rate of return on their investment or for them to choose to split their investment returns and allowing the cooperative board to direct these returns to areas of social impact in the community and the building

There is a lot to learn from both of these campaigns, and these are just two examples of the many types of investment crowdfunding campaigns that are successfully raising money all over the country. Contact me at hello@crowdfundnc.com to see if the investment crowdfunding opportunity may be right for you.

This message is not meant to imply directly or indirectly for any individual to take a position in any investment mentioned.  Nor is it meant to be guidance or advice on how to structure an investment offering for any company.  It's meant only for educational purposes so readers can observe what other companies are doing.

CrowdfundNC welcomes Jeff Dayton as an Advisor

Jeff Dayton, seasoned senior executive, board director, board advisor, Angel Investor and leader, joins CrowdfundNC's Advisory team.

Jeff Dayton

Jeff is an accomplished executive in Fortune 500 corporations and startup ventures.   His 30 years of experience include CEO, CTO, and board roles.   He loves finance, deal making, and corporate strategy.    He has a reputation for trust, leadership, knowledge, and teamwork.     

Currently Jeff is CEO of Alpha Funders, a top venture advisory and deal syndication firm.    Previously Jeff has held corporate positions including CTO of Liberty Mutual, Home Depot, and Belk.  In the high-tech space, he has held positions including President of Softbase, Director at BMC, and private equity executive at VSPAN and GlobalSpec.    

Jeff is an advisor to Airing (medtech) and Initial State (IoT).  He is an angel investor in Virtuix, Trusted Insight, late stage Biothera (cancer biotech) and numerous startups.

See our About page for more information on Jeff's expertise.

We welcome Jeff to the team and look forward to his valuable advice and experience as together we serve entrepreneurs, investors, and others in our community.

Congratulations North Carolina!

By Will McGuire

NC IDEA Awards 5 Crowdfunding Grants to North Carolina startups. This is a major milestone for these companies, North Carolina and our community at large.

About Will McGuire

At CrowdfundNC, we aim to grow North Carolina's entrepreneurial ecosystem by democratizing access to capital for all businesses providing new economic opportunities for all. We do this by providing education and services enabling North Carolina startups and existing businesses to get funded using a variety of online private and public offering strategies including investment crowdfunding.

We're proud of these startups and wish them the best on their potential success.

Are VCs needed anymore?

Imagine a world where hundreds if not thousands of people pool as little as $10 each together to invest in startups...

By Will McGuire

Crowdfund Insider just launched an interesting article saying Farewell to Venture Capital at least in the traditional sense where a few determine whether a startup adds value to the masses.  I think there is a space for everyone to play in this amazing disruption occurring with startups and business funding.

About Will McGuire

So are VCs needed anymore? Yes, they are, but because of the new types of exemptions which enable investment crowdfunding, now everyone can participate in startup investing, not just wealthy accredited investors and VCs.

Diversification Strategies of the Wealthy for Everyone

As a middle class American family, my wife and I have diversified our assets using investment crowdfunding since 2016.  We've teamed up with hundreds of investors to participate in $100K rounds to $7MM rounds for startups who are killing it with B2C products, generating new TV series & movies, creating disruptive AgTech, Medical Tech, Fintech, and more.

The reason my family is moving back to our home state is that we want to champion the services that are providing these new economic opportunities to ALL by unlocking the resources of individuals for entrepreneurs.

Everyone can participate...everyone has some value to give and potentially some amazing reward to receive.  Imagine if you had the opportunity to invest in Pendo or Uber or <insert your favorite company> when they were just getting started at $10M, $5M or even $2M valuations.  How would that return impact your family?

Investment crowdfunding also allows individuals to invest in small businesses such as <insert your favorite local coffee shop, restaurant, you name it> and receive a share of the revenue.

Benefit to Startups

Imagine the impact on a startup, when instead of having a few validate their service or product, they have a crowd of hundreds or thousands who not only become their beta product and services testers, but they are economically incentivized by the nature of their investment of $10, $100, $500, $1000, <name your amount> to unlock their connections for startups.  David's on point when he says "All fundraising is the SLOW conversion of your SOCIAL capital into FINANCIAL capital."  Increasing the size of your dedicated social crowd seems to statistically lean in a favorable direction.

Investment crowdfunding allows an unprecedented opportunity for startups and small businesses to pivot their marketing and branding strategies quickly which could be the difference between bankruptcy or success.

It also allows them to connect with individuals who may have a specialty that can help accelerate their growth.  Would they have found this specialty using a traditional VC?...perhaps, but organized diversification provides new opportunities not seen before for startups.

Benefit to Traditional Angels and VCs

Technology is transforming "Traditional" Angels and VCs to "Virtual" Angel and VC Groups.

It is incredibly powerful to be able to aggregate everything needed to make a decision on whether to fund a company through closing the deal all from your preferred device by accessing a single website.

From sourcing deal flow, to vetting and qualifying deals, to finding capital, to having the offering materials automatically generated all in one place, we've only just begun to see the efficiency gains of leveraging online syndicates for investing.

Beyond the $

Everyone should have the opportunity to take the risk of investing in startups to reap the potential reward of freedom the results can provide.  While these financial rewards can be game changing for an individual or a family, it doesn't stop there.  The relationships I've developed with many of the founders I've met (whether I've invested in them or not) go way beyond the $ nature of the investment or the introduction I've made for them.  I like helping value creators...those solving some of our biggest problems of our generation and have had the pleasure of calling several of them my friends.

I look forward to serving all of the value creators and those new to investing out there!  Let me know how I can help. You can reach me at will@crowdfundnc.com.