Marketing an Investment Crowdfunding Campaign in North Carolina

By Roy Morejon
Enventys Partners

In 2015, my agency ran an investment crowdfunding campaign for Digitzs, a new payment platform.

Digitzs is a groundbreaking, patent-pending platform and mobile app where merchants get paid next day and can choose their Visa or MasterCard fees (from 0 to 3 percent). The system caters to a trillion dollar marketplace: merchants in the middle who don't swipe cards or use shopping carts. Laura Wagner, founder of Digitzs, recognized that navigating the waters of a fast-growing and ever-changing equity crowdfunding space can be difficult, so she sought the expertise of our team.

Roy Morejon

We teamed up far in advance of the launch of Digitzs’ initial equity raise. The goal was twofold- Digitzs needed to garner support from investors, while also gaining name recognition to prove market viability.

Command Partners was able to offer a full range of services to help make the Digitzs campaign a success, including:

• Developing a pitch deck used for investor and media outreach throughout the campaign
• Managing Digitzs social media accounts
• Handling investor outreach across multiple platforms and coordinating meetings between investors and the Digitzs team
• Designing and developing landing pages for driving investor, media and general traffic
• Writing scripts and storyboards for videos specific to investors and the media
• Creating and distributing press releases to targeted media lists, pitching stories to journalists and securing media coverage
• Designing web pages, branded headers, press inserts and other graphics

While working with us, Digitzs exceeded their investment goal and went on to get over $8M in commitments.

This was our first equity campaign, which was exciting in and of itself, but it was exciting for another reason: Digitzs marked the beginning of a new era of investment crowdfunding for Command Partners.

The Future of Investment Crowdfunding in NC

On May 16, 2016, the SEC allowed Title III of the JOBS Act to go into effect, making investment crowdfunding legal throughout the country by allowing non-accredited investors to invest in startups and small businesses. Shortly thereafter, on July 22, the NC PACES (Providing Access to Capital for Entrepreneurs and Small Business) Act, was signed into law by Governor Pat McCrory. Now that there are federal and state laws regulating investment crowdfunding, my agency can begin to work with new companies raising capital through investment crowdfunding across North Carolina.

Now is an exciting time for these new investment crowdfunding laws to take place. In 2015, funding from investors for North Carolina companies grew 122 percent, to $1.18B. Here in Charlotte, the startup climate keeps getting better. The Kauffman Index of Startup Activity ranked the Charlotte metro area as the 25th best place for startup activity, up from number 28 in 2014. The rate of new entrepreneurs is also up from 2014, at 0.29% compared to 0.26%. This makes sense given the vibrant startup community within Charlotte.

Consider HQ Charlotte, for example, formerly known as Packard Place. HQ Charlotte at Packard Place caters to entrepreneurs and startups, offering co-working spaces, suites and more within their 90,000 sq. ft. space in the heart of uptown. Additionally, Packard Place is home to six world-class accelerator programs that help launch new companies right here in Charlotte.

With so many great opportunities for startups in North Carolina and here in Charlotte, we’re looking forward to a bright future for investment crowdfunding. If you need help marketing an investment crowdfunding campaign, contact us today.

Roy Morejon brings over 20 years experience in delivering integrated marketing services for B2B and B2C clients, helping transform companies by increasing online visibility and brand awareness through targeted digital marketing, corporate communications and data-driven search marketing campaigns. He is an expert at digital strategy, analytics, search engine marketing and crowdfunding. As a trusted advisor to dozens of global startups, Roy is a key player in the local Charlotte marketing community, serving as co-founder of the Digital Marketing Association, regional chair for the Business Marketing Association and founder of North Carolina Businesses for Social Responsibility.

FAQs About the New North Carolina Crowdfunding Law, the NC PACES Act

By Jim Verdonik

I am part of  the NC PACES Act team that provided advice to the State of North Carolina about enacting our new state crowdfunding law called the NC PACES Act. Below is a link to some FAQs I wrote that summarize the resulting North Carolina crowdfunding statute that was enacted in July 2016.

Jim Verdonik

There have also been some proposed changes to SEC Rule 147 which are important to allow more businesses to use state Crowdfunding laws, and these are also summarized in the post.

Click here to see my NC PACES Act FAQs post on my blog.


Jim is an attorney with Ward and Smith PA. You can reach Jim at JFV@WardandSmith.com.

Also check out his business related videos at www.YouTube.com/eLearnSuccess

Jim writes a column about business and law for American Business Journals.

You can purchase his book Crowdfunding Opportunities and Challenges at Amazon.

Governor Signs North Carolina Investment Crowdfunding Bill

By Mark Easley Sr.

The NC PACES Act, “Providing Access to Capital for Entrepreneurs and Small Business”, was signed into law today by Governor Pat McCrory. The bill passed both the NC Senate and NC House by unanimous votes during the short session, and North Carolina now joins over 30 other states that have passed similar laws. The NC PACES Act enables a new way to finance startups and small businesses in our state known as investment crowdfunding.

Kevin Herrington, Mark Easley, Benji Jones, Gov. McCrory, Secretary Skvarla, Senator Barringer
at the signing of the NC PACES Act investment crowdfunding bill.

The creation and passage of the NC PACES Act investment crowdfunding exemption was a team effort by the General Assembly, the NC Secretary of State Securities Division, the NC Commerce Department, the Governor’s office, and our North Carolina startup community and small business supporters. The bill was originally co-authored by former Representative Tom Murry, and the now retired head of the Securities Division David Massey, and was at the time known as the NC JOBS Act. This exemption became a model piece of legislation that was used as the basis for many of the crowdfunding exemptions passed in other states. Many thanks are due to Tom and David for creating this groundbreaking securities law concept which is now helping to finance small businesses and create jobs all over the country. The bill was then brought to the Senate with some enhancements by chief sponsor Senator Tamara Barringer, and became known as the NC PACES Act. We are grateful to Senator Barringer for her hard work and advocacy for the bill.

We would also like to thank all of those in the executive branch who supported and advocated for the bill, including Governor McCrory, Lieutenant Governor Forest, Secretary of State Marshall, Commerce Secretary Skvarla, and their staffs including Mike Arnold, Kevin Harrington, Ashley Jones, John Hardin, and all those who contributed to the effort.

On the legislative side we would like to thank the other chief sponsors of the bill including Senator Gunn and Senator Hise, and Representative Shepard and Representative Hastings and their staffs. In addition, NC Congressman Patrick McHenry, who created the federal JOBS Act, also supported our efforts.

The North Carolina startup and small business communities are supporters of the bill. We would like to thank the following supporters:

Joan Siefert-Rose – CEO of CED and staff

Larry Robbins – Founder and partner at Wyrick Robbins

Joseph Nixon – NC Biotech Center

Bill Warner – Entredot Small Business Accelerator

Jim Roberts - Wilmington startup community leader
Dan Roselli - Charlotte startup community leader
Chris Heivly and Dave Neal – Startup Factory

Jason Widen – HQ Raleigh

Adam Kline – American Underground

John Austin – Groundwork Labs

Lister Delgado – IdeaFund Partners
Wade Fulghum and Lewis Sheets – NC State Entrepreneurship Initiative

Brooks Raiford – NC Technology Association

John Demers – Film and TV production community leader

The NC Chamber

We would also like to thank the local press that provided balanced coverage of the bill and its importance to North Carolina small business over the last several legislative sessions: Rick Smith of WRALTechwire, Laura Baverman of exitevent.com, Lauren Ohnesorge of Triangle Business Journal, and Mark Binker of WRAL.

Last but not least, I want to send very special thanks to our small but dedicated NC PACES Act team that voluntarily worked hard to make this happen, and to give back to the community and state. None of this could have happened without the dedication and hard work of this team:

Benji Jones – Partner at Smith Anderson

Jim Verdonik – Partner at Ward and Smith

Brooks Malone – Partner at Hughes Pittman Gupton CPAs

Steve Reaser – Small businessman

Nick Bhargava – Co-founder of real estate crowdfunding site Groundfloor

Mital M. Patel – Attorney at Wyrick Robbins

When we work as a team, good things happen. Thanks to all for your efforts.

Best regards,

Mark Easley Sr.

NC PACES Act Team leader,

Startup and small business advisor, and crowdfunding advocate

Additional coverage including video of today's signing ceremony:

Signing Event Video on YouTube
Secretary of State Announcement Newsletter

ExitEvent Facebook

ExitEvent Twitter

Triangle Business Journal Story

Press Coverage of the Passage of the NC PACES Act

The passage of the NC PACES Act investment crowdfunding exemption bill has been in the news in our local press in the Triangle. The Governor is expected to sign the bill shortly.

WRAL Techwire has a post on NC Secretary of State Praises Crowdfunding Bill, and another one on NC's Crowdfunding Law: What it means, an Attorney's View.

Triangle Business Journal reports NC PACES is Headed to the Governor's Desk.

The News and Observer has a post on NC Crowdfunding Law would provide a new way for companies to raise capital.

We Made It! NC PACES Act to Become Law

By Benji Jones

The NC PACES Act: “Providing Access to Capital for Entrepreneurs and Small Business” has been passed by the NC House by a vote of 114 to 0, the NC Senate by a vote of 49 to 0, and is now headed to Governor McCrory for his signature.  After 3.5 years in the making, intrastate investment crowdfunding is finally coming to North Carolina!  

 

Senator Tamara Barringer

Senator Tamara Barringer, co-sponsor of the bill, states: “The NC PACES Act has passed the North Carolina House and Senate unanimously, paving the way for small businesses to raise much needed capital, providing jobs and opportunities for North Carolinians.”

What does this mean? 

A North Carolina business will be able to raise up to $1 million in any 12-month period (or up to $2 million with audited or reviewed financial statements) from investors who are North Carolina residents.  There are no wealth or income limitations on who can invest; however, investors who are not “accredited” may only invest $5,000 in a particular venture in any 12-month period.

Companies will be permitted to promote the offering publicly, after filing a notice (as well as substantive disclosures) with the Securities Division of the North Carolina Secretary of State.  A fee of $150 will also be charged.  Companies are required to communicate in writing the business plan, financials, use of funds, and risks of the offering. Investors are required to certify in writing at the time of sale that they understand the risks of purchasing unregistered securities and that they may lose their entire investment.

Companies may (but are not required to) use a professional crowdfunding intermediary that meets the requirements established by NC PACES and related rules.  They are required to establish an escrow to hold funds prior to closing.

Benji Jones

Companies that issue securities under NC PACES will be obligated to provide quarterly reports to investors discussing management compensation, operating results, and financial condition, etc.

When can we start?

Companies can start gathering materials, preparing disclosures, and consulting advisors now.  However, you will not be able to formally pursue investors under NC PACES until the Securities Division of the North Carolina Secretary of State’s office adopts specific rules to implement the provisions of the Act.  The Secretary of State’s office has played a critical role in formulating this exemption and, although the law gives it a 12-month period to act, hopefully, it will give implementation of these rules highest priority. 

There are some details to iron out so stay tuned here for more updates.   

The content contained on this blog does not provide, and should not be relied upon as, legal advice. It does not convey an offer to represent you or an attorney-client relationship. All uses of the content contained in this blog, other than for personal use, are prohibited.

Benji Jones is a partner at the Ward and Smith law firm with extensive experience in representing companies in exempt and non-exempt securities offerings.  Feel free to reach out directly to the author with questions or comments.