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.

NC IDEA Foundation and LocalstakeNC Announce a New Grant Program to Support Investment Crowdfunding Campaigns

By Mark Easley

About Mark Easley

NC IDEA Foundation has announced a new grant program that provides grants to North Carolina startups and existing businesses that are preparing investment crowdfunding campaigns to raise capital. NC IDEA has partnered with the North Carolina investment crowdfunding platform LocalstakeNC to help companies cover the costs of creating and promoting an investment crowdfunding campaign on the LocalstakeNC platform.

Investment crowdfunding is a new way for businesses to raise money by selling debt or equity securities to the public using an investment crowdfunding platform like LocalstakeNC. Businesses can sell equity securities including preferred or common stock or SAFEs, or debt securities including convertible notes, revenue share loans, or promissory note loans. Now NC businesses and startups can use new securities laws including the NC PACES Act (raise up to $2M), the Federal JOBS Act Regulation Crowdfunding (raise up to $1M), and Reg A+ (raise up to $50M) to raise funds, and both accredited and non-accredited investors can invest in North Carolina startups and businesses that offer securities using these laws. LocalstakeNC also supports 506(B), 506(C), and 504 offerings.
 
As NC IDEA states in their press release:

"Platforms like Localstake NC have emerged over the last few years to help companies raise investment capital from individual investors. The recent passage of the NC PACES Act gives North Carolina companies another mechanism to raise capital from individuals in a compliant and organized manner. Conversely, these platforms allow all individuals regardless of accreditation to support local companies with their investment dollars. While this mechanism has helped thousands of companies across the country successfully raise capital, to date, few companies in North Carolina have taken advantage of this potential alternative to raising money. Through a competitive application process similar to other Foundation programs, NC IDEA will award $5,000 grants to selected companies wishing to expand their businesses via investment crowdfunding on Localstake NC this Spring. Grant recipients will be supported by NC IDEA and work directly with Localstake NC to have an active fundraiser on their platform by May 2019. Grant funds will be used to pay for platform fees ($2K) with the remainder directed toward supporting marketing materials and other related expenses."

NC IDEA Investment Crowdfunding Grant applications will be open from December 17th to January 28th.

Want to learn more and apply? See the Crowdfunding Grant Announcement here. And you can learn more about the Crowdfunding Grant Program here.

There will be an online webinar hosted by NC IDEA and LocalstakeNC to explain the process and answer questions on December 17th at 1:00pm. You can register for the Crowdfunding Grant Webinar here.

How To Build an Audience Before Your Crowdfunding Campaign Launches

About Mark Easley

Here is a very interesting post in Forbes about the importance of building your audience before you launch a crowdfunding campaign and how to do it. Author Evan Marsamis has it right, the marketing work done before your launch is as important as what you do after launch. Rule 1 of Crowdfunding: Create Your Crowd!

From Forbes:

How to Build an Audience Before Launching your Crowdfunding Campaign
By Evan Marsamis

Investment Crowdfunding Helps Startups Generate Future VC Funding

How is investment crowdfunding helping generate more and bigger investments by VCs? See my comments in this post on WRALTechwire.

About Mark Easley

The three venture funding reports listed in the article are very interesting posts, and it is great to see this strong trend for our North Carolina businesses. I am sure there are many reasons for the increase in venture funding, including more money than ever is available from existing and new venture funds, and we have a very vibrant and active startup community in the Triangle and around the state.

In my opinion we now truly have one of the top startup ecosystems in the nation, allowing us to rank right up there with places like Austin, Boston, Seattle and Atlanta as places where startups want to be and investors want to invest. The strong consideration of our area by Apple and Amazon reinforces that belief.

Of course I view things from the investment crowdfunding perspective, and I think that has made a contribution to the growth of the venture capital market nationwide in a couple of ways:

• A larger pool of potential companies for the VCs to back. Many companies that are too early stage for most of the VC community have been able to prove their value proposition and achieve important metrics with seed stage investment crowdfunding rounds. So this is providing a larger pool of pre-vetted companies as they move to the Series A and later stages where the VCs like to participate. About the same amount of money is now being raised by companies with crowdfunding as is being raised from early stage angel investors, so the available pool of seed stage funded startups is now much larger.
• Earlier exit opportunities. The investment crowdfunding platforms have begun to create secondary markets for the stock of these startups. Before, it usually took 5 to 10 years for even a very successful startup to be acquired or have an IPO. But now the early investors and startup employees have a new alternative to getting some of their return earlier. They can sell some of their stock as a secondary offering on one of the investment crowdfunding platforms (Microventures.com in Austin has been a leader in this area), or they can use the Federal JOBS Act Regulation A+ to sell up to $50M worth of their stock as an investment crowdfunding round in what is known as a “Mini IPO”. A percentage of the stock can be from early investors and employees.

Both of these developments are helping the VCs to raise money for their own funds and then invest it in startups, because there is a larger pool of pre-vetted startups to put the money to work, and the potential for some quicker returns on investment. The effect of these developments is not that large yet in North Carolina, but I think it will grow into a significant factor here soon as it has in places like Silicon Valley, Austin, Boston, Seattle and Atlanta. So our startup community has a strong future ahead of it.

Investment Crowdfunding Seminars

A video of the investment crowdfunding seminar we did recently at the American Underground startup accelerator in Durham is now available. We had a large crowd of interested startuppers and small business owners for our lunch and learn session at AU. 

Mark Easley

These seminars are held at various locations around the state in conjunction with our crowdfunding partners. Mark Easley, the publisher and editor of CrowdfundNC.com is the featured speaker, and he discusses how to use the new North Carolina Localstake NC investment crowdfunding platform to get funding for your startup or existing business.

Localstake NC enables startups and existing businesses to conduct a cost effective and professional debt or equity securities offering and get funding from new sources: their community, customers, partners, and supporters.

This seminar will help both entrepreneurs and investors understand these new funding options and how to make use of them. 

You can learn more and sign up for one of our upcoming live seminars on the Events tab.

Investment Crowdfunding Platform Launches in North Carolina

By Mark Easley

Localstake NC enables startups and existing businesses to conduct a cost effective and professional debt or equity securities offering and get funding from new sources: their community, customers, partners, and supporters.

Mark Easley

Investment crowdfunding has been growing significantly around the nation, with billions of dollars raised across many different platforms. Now it's our turn North Carolina! It's time to start investment crowdfunding our most promising North Carolina startups and existing businesses to help grow the economy, create jobs, and enable new products and services in communities all over our state.

Localstake NC is the first investment crowdfunding platform exclusively serving North Carolina. Startups and existing businesses ranging from technology startups to retail shops and restaurants can use the platform to raise money to get a company started or to help it grow.

Localstake NC will be hosting private Reg D 506(b) accredited investor offerings, 506(c) accredited investor offerings that can advertise and do general solicitation, and also public investment crowdfunding offerings using the North Carolina PACES Act exemption or Federal JOBS Act Regulation Crowdfunding or Reg A+ exemptions for retail investors and accredited investors. Startups and existing businesses can have offerings of several types including equity, SAFEs, convertible notes, revenue share loans, and conventional loans.

The new NC PACES Act investment crowdfunding law provides a great new innovative option for raising money from all North Carolina residents.

What are the new securities law exemptions like the NC PACES Act and Regulation Crowdfunding?

Start-up companies and existing businesses play a critical role in creating new jobs and growing the economy. The North Carolina Providing Access to Capital for Entrepreneurs and Small business (NC PACES) Act crowdfunding legislation enables a safe, fair, and easy way to finance startups and existing businesses in North Carolina called investment crowdfunding.

Regulation Crowdfunding is a part of the federal JOBS Act securities law exemption. It is more complicated and expensive to implement, but enables investment crowdfunding at the national level. Offerings using both types of exemptions can be hosted on Localstake NC.

And for the first time, all North Carolina residents can invest in startups and small businesses that use the NC PACES Act or Regulation Crowdfunding to raise money. North Carolina residents can now allocate a portion of their investment funds in an organized and transparent way by opening an investment account on Localstake NC, which is a registered Broker/Dealer in North Carolina. This enables investors to connect with local businesses that are raising money, access organized company profiles and financial information, and build and manage a diversified portfolio of local investments.

North Carolina residents can help fund businesses in their own community while potentially receiving a good return on their investment from interest on revenue share loans and other types of loans. They can also invest in equity offerings from high growth startups that were previously only available to wealthy angel investors, venture capitalists, and private equity firms. These types of investments can now be open to everyone. 

How do businesses get funded on Localstake NC?

The investment crowdfunding mission of a startup or small business is to create a great company profile and offering on Localstake NC that explains:

• The company vision
• The problem to be solved
• The product or service solution they have for that problem
• Identification of the target market and how to reach it
• A business plan and model that works
• An analysis of the competition and how to win
• A reasonable financial projection of the business
• The team that that can make the business a success
• The terms and disclosures about the investment offering

On the company profile webpage on Localstake NC, the business will make the case for the funding they need to get that done, and explain the investment offering they are making.

The next step is to run an investment crowdfunding campaign to raise the needed funding. The goal is to find investors in the community and around North Carolina that share your enthusiasm for your business and will help fund it. Localstake NC also provides the broker/dealer investment accounts and the tools to enable investors to invest, and to manage the required disclosures and reporting to investors by the company.

Businesses can use Localstake NC to raise money using a variety of securities law exemptions including Reg D Rule 506(b) and 506(c), Rule 504, Regulation Crowdfunding (Reg CF), Reg A+ (Mini IPO), and NC PACES Offerings (NCPO). And the securities offered can be a variety of types including convertible notes, preferred or common equity, SAFEs, revenue share loans, or other types of promissory note debt securities.

About Localstake NC

Localstake NC is an extension of Localstake Marketplace LLC, a registered Broker/Dealer, which provides capital raising advisory services and an online investment platform. Localstake, based in Indianapolis, has helped small businesses raise millions of dollars using investment crowdfunding since 2013. Localstake supports federal and intrastate investment crowdfunding offerings in Indiana, Michigan, and Colorado, and is now bringing that expertise to North Carolina. Localstake Marketplace is a registered Broker/Dealer in North Carolina and other states, which means offerings conducted on the platform are regulated under the purview of FINRA and the SEC. Please visit Localstake NC to learn how it works, how to raise funding, how to invest, how to sign up for a free trial business account or how to sign up for a free investor account.

About CrowdfundNC.com

Localstake NC is partnering with CrowdfundNC.com, an educational and services website that is building the ecosystem needed to support investment crowdfunding in North Carolina. At CrowdfundNC.com you can find the tools and services from the top investment crowdfunding experts in North Carolina to help you put together the right offering, create and market your crowdfunding campaign, and get the funding you need.

Our services partners are North Carolina crowdfunding specialists including crowdfunding advisors, law firms, marketing agencies, sales channel advisors, video creation services, business planning advisors, technology development companies, CPAs, HR service companies and more for the startup and small business community.

The publisher and editor of CrowdfundNC.com is Mark Easley, a leading advocate and expert advisor for investment crowdfunding in North Carolina. Please visit CrowdfundNC.com for more information about CrowdfundNC, getting funded, investing, services, and the NC PACES Act.

For more information:

If you are interested in getting funded you can sign up for a free trial business account on Localstake NC to get started. Investors may sign up for a free investor account to stay informed about the opportunities. Please contact Localstake NC by email support@localstake.com and CrowdfundNC.com by email crowdfundnc@nc.rr.com.