Crowdfund Investing For Dummies

The easy way to get started in crowdfund investing

Crowdfund investing (CFI) is going to be the next big thing on Wall Street.  U.S. investment banks, brokerage houses, and law firms are gearing up for the creation and regulation of new financial products that will be available to the general public starting in early 2013.  The introduction of these products will revolutionize the financing of small businesses and startups for these key reasons:

• Entrepreneurs and small business owners, who have had difficulty obtaining capital through traditional means (such as bank loans and angel investors) in recent years, will have access to investors around the world through social media.
• For the first time, investors (so-called unqualified investors) will be able to purchase an equity stake in a business or new investment vehicle.

The Securities and Exchange Commission (SEC) is overseeing the creation of online portals that will allow entrepreneurs and small investors to connect. When these portals go live in 2013, Crowdfund Investing For Dummies will be on the front line to educate business owners, other entrepreneurs, and investors alike.

 Crowdfund Investing For Dummies will walk entrepreneurs and investors, like yourself, through this new investing experience, beginning with explaining how and why CFI developed and what the 2012 JOBS says about CFI.

Entrepreneurs will find out how much funding they can realistically raise through CFI; how to plan and launch a CFI campaign; how to manage the crowd after a campaign is successful; and how to work within the SEC?s regulations at every stage. 

 Investors will discover: the benefits and risks of CFI ;how much they can invest; how a CFI investment may fit into a broader investment portfolio; how to provide value to the business or project being funded; and how to bow out of an investment when the time is right.  

Crowdfund Investing For Dummies is an indispensable resource for long time investors and novice investors alike.

Introduction 1

Part I: Tapping the Potential of Crowdfund Investing 7

Chapter 1: The Crowd’s in Your Corner: Funding or Investing in a Business 9

Chapter 2: Tracing the Origins of Crowdfund Investing 23

Chapter 3: Raising Capital for Your Startup or Small Business with Crowdfund Investing 41

Chapter 4: Becoming Part of the Crowd: Investing with Caution 67

Part II: Planning Your Crowdfund Investing Campaign 83

Chapter 5: Defining Your Goals and Financial Needs 85

Chapter 6: Focusing on Your People: Building Your Crowd and Your Team 109

Chapter 7: Picking a Powerful Crowdfund Investing Platform 127

Chapter 8: Networking Your Way to Successful Funding 141

Part III: Managing Your Crowdfund Investing Campaign 155

Chapter 9: Making Your Pitch 157

Chapter 10: Troubleshooting Campaign Problems 177

Chapter 11: Moving Forward When You Reach Your Funding Target 191

Part IV: Running Your Business with Your Investors in Mind 207

Chapter 12: Communicating with Your Investors 209

Chapter 13: Crowd Mentality: Staying Afloat in the Face of Investor Revolt 219

Chapter 14: Knowing Your Options If Your Plans Go Astray 231

Part V: Becoming a Crowdfund Investor 243

Chapter 15: Evaluating Crowdfund Investing Opportunities 245

Chapter 16: Committing Your Capital 259

Chapter 17: Adding Value: Playing the Right Role as an Investor 271

Chapter 18: Exiting a Crowdfund Investment 283

Part VI: The Part of Tens 293

Chapter 19: Ten Best Practices for a Crowdfund Investing Campaign 295

Chapter 20: Ten Reasons Every Country Should Consider Crowdfund Investing 301

Chapter 21: Ten Crowdfunding Cases 309

Chapter 22: Ten Stories That Inspire 315

Appendix: Resources 321

Index 325

Sherwood Neiss, Jason W. Best, and Zak Cassady-Dorion are the founders of Startup Exemption (developers of the crowdfund investing framework used in the 2012 JOBS Act). They deeply understand the process, rules, disclosures, and risks of capital formation from both the entrepreneur's and the investor's points of view.