The Success or Failure of Your Equity Raise Depends (Mostly) on How Well You Do This

Written by Gene Wright. Posted in Funding/Lending

Want to know whether or not a proposed business investment is sound? Look no further than its Value Proposition. A VP is the starting point for potential issuers in developing equity crowdfunding campaigns that has a significant influence on their success or failure. Simply put, if the VP isn’t clear and compelling enough, investors will look elsewhere for better returns for their dollars.

The Franchisor’s Campaign: How Crowdfunding Expands the Brand

Written by Gene Wright. Posted in Uncategorized

Crowdfunding is not just for youth on social media or techno-whizzes with the latest mobile apps. Not only can crowdfunding work for artists and local business initiatives, it can also work for franchisees and even franchisors.

It makes sense for franchisors to examine the advantages of crowdfunding. Many large, popular companies from various industries such as hospitality, retail and tourism have eager franchisees who could expand the brand, but who simply cannot raise the capital.

The Franchisor’s Campaign: How Crowdfunding Helps Expand the Brand

Written by Gene Wright. Posted in News

Crowdfunding is not just for youth on social media or techno-whizzes with the latest mobile apps. Not only can crowdfunding work for artists and local business initiatives, it can also work for franchisees and, more importantly, franchisors. It makes sense for franchisors to examine the advantages of crowdfunding. Many large, popular companies from various industries such as hospitality, retail and tourism have eager franchisees who could expand the brand, but who simply cannot raise the capital.

Where Is The Capital?

A large part of this is due to a decreasing number of banks willing to lend to small businesses, and the lack of home equity that franchisees have traditionally utilized to facilitate loans. Since the franchisor is not likely to provide the equity up front, it’s in their best interest to help find alternative options to help their franchisees. By hiring a crowdfunding consultant, a franchisor can develop a consistent and compelling message that can be used in multiple crowdfunding campaigns in all applicable states. Using economies of scale means that the franchisor can have a mass-produced campaign process that is customizable to each particular community.

Coming Together

Crowdfunding is not only an effective method to raise capital, but also a great way to build a strong client-base of devoted customers, and to generate buzz in the community. But most importantly, this is an investor’s chance to have a positive impact on their town, by investing in a person or business that matters to them.  By making a crowdfunding consultant available to franchisees to help accelerate growth of the brand, the franchisor is further strengthened as more franchises open in previously untapped markets.

See more at: http://crowdfundingbusiness.net/the-franchisors-campaign-how-crowdfunding-expands-the-brand/#sthash.OWSSsvwK.dpuf

The True Cost of Raising Capital Through Equity Crowdfunding

Written by Gene Wright. Posted in News

As the old saying goes, “you’ve got to spend money to make money.” And although the capital journey may be changing, this old adage remains true. Small business owners must anticipate some costs – either up front or out of the funds raised – in order to fund their capital needs. If a business owner can understand this fundamental principle, he or she will be better prepared for the capital journey ahead.     

In the old days of investing, start-ups would have been required to hire securities underwriters to perform “due diligence” including, many times the cost of an audit and at the least, hire an attorney to make sure that the business venture adequately disclosed its financials [A1] and the risks involved in investment in the company. Then, the securities underwriter would market the deal on behalf of the business owner. This whole process typically begins with a non-refundable deposit, minority stock ownership and a percentage of the total fees raised. Whether or not the business gets funded, the owner must still pay the broker dealer or securities underwriter for the costs of due diligence.

Most business owners realize this is the cost of raising capital and agree that most of the fees will be paid out of the proceeds of the amount raised on their behalf. The reality is this is a normal part of doing business. Most lawyers or CPA’s will not work, on the basis of a success fee (many are not allowed to due to securities regulations). Likewise, loans also cost fees for approval a $750,000 loan can cost up to $40,000. The same can be said for closing fees for crowdfunding equity platforms, which can be from 4-10% of the total raise in some cases. Entrepreneurs need to understand this from the get-go, and appropriately plan for these costs before planning to raise equity capital or debt to avoid disappointment.

Serious entrepreneurs will understand that there are no shortcuts to a successful capital raise. While it may be hard for a new business owner who hasn’t raised equity before to understand, most experienced owners would agree that the process and costs are well worth the effort to accelerate their business growth opportunities.


 

What Opportunities Exist Between Crowdfunding and Franchising?

Written by Gene Wright. Posted in Uncategorized

When you think of crowdfunding, you may think of websites such as Indiegogo.com or Kickstarter.com, which usually feature bright, charismatic entrepreneurs with new and innovative products, writers working on manuscripts, or even aspiring musicians recording new albums.

But crowdfunding can also be used to help entrepreneurs bring popular franchises to their local communities. Crowdfunding and franchising are a very natural fit.

Rebuilding the American Dream: Small Business by the Numbers

Written by Gene Wright. Posted in Uncategorized

Former President Ronald Reagan called them the “forgotten heroes of America”: small business owners who make up a startling majority of job creators, employers and exporters. But these local, home-grown companies often meet huge financial challenges as they try to get their businesses off the ground. From legal advice to proper underwriting, entrepreneurs are facing many challenges raising the equity they need to make their American dream come true. That’s where crowdfunding may help. Simply put, the promise of crowdfunding can help small business, and small business drives the American economy.

The True Cost of Raising Capital Through Equity Crowdfunding

Written by Gene Wright. Posted in Gene Wright

As the old saying goes, “you’ve got to spend money to make money.” And although the capital journey may be changing, this old adage remains true. Small business owners must anticipate some costs – either up front or out of the funds raised – in order to fund their capital needs. If a business owner can understand this fundamental principle, he or she will be better prepared for the capital journey ahead.