American Entrepreneurship Today is pleased to present our Q&A series with key participants of the entrepreneurial ecosystem.
StartupValley is an equity-based crowdfunding portal for the technology sector allowing tech start-ups and emerging growth companies to raise capital through the power of the crowd. Non-accredited investors will be able to provide early-stage investments in these tech-based businesses in exchange for an equity share in their company. With a passion in technology and entrepreneurs for the past 10 years, the co-founders, Daryl H. Bryant and Matt Mayernik understand how difficult it is to raise the capital you need to get your idea off the ground. Both attended Montclair State University and this is where they initially met back in 2000.
StartupValley is currently in pre-launch status and is targeting entrepreneurs with revolutionary technology-based ideas. The platform provides companies with the ability to post their pitch, reach out using their social influence, gain awareness, and gauge fan feedback on their business. Once the rules are released by the SEC, StartupValley will be a fully functioning equity based crowdfunding portal.
StartupValley has been approved and received our Crowdfunding Portal accreditation by CrowdSourcing.org. StartupValley is a member and part of the portal committee within Crowdfund Intermediary Regulatory Advocates (CFIRA) and Mr. Bryant is a co-founding board member and PR Committee co-chair of Crowdfunding Professional Association (CfPA).
What is the most fundamental way for entrepreneurs to understand what a crowd funding platform will provide?
There will be a large education component involved with platforms and it’s important that the entrepreneurs and all parties involved with the issuing company educate themselves on the process of crowdfund investing. There are many guidelines set forth by the SEC that entrepreneurs must abide by to protect themselves from any fines or punishments. Legal and financial form filings will be just one part of the process that will need to adhere to strict guidelines.
Since many are starting up, is there a reason why one crowd funding platform is different or better than others? Where does Startup Valley place itself with its competition?
Great Question. There are already many different platforms with different business models, servicing a wide variety of niche markets, already on the market. StartupValley is focused on technology startups, including mobile/social apps, member based websites, cloud computing, security and IT, renewable energy, consumer-based products, and the list goes on. We are servicing technology startups and attracting investors with an interest in these same technologies. It is our focus to align these two together and provide them with a centralized platform to engage, interact, and invest with one another. StartupValley is also aligning itself with affinity groups that will help leverage their deep networks to locate deals, attract investors, and support these entrepreneurs. We have yet to disclose our partnerships at this point.
Where do regulations stand relative to this service going live?
Title II of the JOBS Act is set to have the ban on general solicitation to accredited investors lifted on Sept 23rd. Title III, the lifting of the ban to non-accredited investors is to follow thereafter; however, there is no official word as to a date for when we will see rules for Title III. Accredited investors are people who have an annual income for $200,000 for at least the last two years (or joint income of $300,000 with a spouse for the same two years) or a net worth (can be joint with a spouse) of at least $1,000,000 not including the primary residence. Non-accredited investors are everyone outside of those parameters, making less than $200,000 a year or a net worth less than $1,000,000.
How should an entrepreneur prepare for using crowd funding?
Do your homework. Read about the requirements, speak to the platform you are looking to raise money on regarding their processes and other details pertaining to the capital raising process. There is quite a bit of research on what makes a campaign successful versus what does not; granted, this is primarily for reward based Crowdfunding not equity based, but some of the pointers can still be carried over. StartupValley speaks with every approved companies and their founders. We walk them through the process and answer any questions they may have to prepare them for what’s to come.
What fees are associated with crowd funding?
There are several fee structures that platforms are currently working with. We believe we will see a wide variety of cost structures that intertwine with one another, including subscription fees, up-front and setup costs, administrative fees, transaction based compensation (paid to the broker dealer), etc.
On most platforms, there will be a transaction fee paid to the broker dealer if the raise is successful, meaning it fully funds. This fee will be paid from the raised capital. Fees unrelated to the platform but relevant to the business owner is that of the miscellaneous startup fees including legal fees, accounting costs, marketing and advertising expenses, etc.
What is the vision for StartupValley for a year to two from now?
Our future is to become the leading platform for equity crowdfund investing for technology startups. The founders of StartupValley have been running various technology ventures of their own over the years and it is our passion to help service these companies. We understand the struggles with running a technology startup and the challenges with raising capital to sustain the growth of the business. We want to give startups a fighting chance. In aligning with strategic partnerships, this will help us to reach a broader audience and offer greater support to our startups community. If anyone feels they would be a good partner for StartupValley, we welcome all inquiries.
Learn more at http://www.startupvalley.com/
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