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The Cape Fear Capital Connection News Hour: Tuesday, September 23, 2014 News and Information About Technology, Capital Markets, and Business In The Cape.

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Presentation on theme: "The Cape Fear Capital Connection News Hour: Tuesday, September 23, 2014 News and Information About Technology, Capital Markets, and Business In The Cape."— Presentation transcript:

1 The Cape Fear Capital Connection News Hour: Tuesday, September 23, 2014 News and Information About Technology, Capital Markets, and Business In The Cape Fear Valley With Thomas Vass The Private Capital News Network Presents

2 Segment One: The Week In Review: Update on Equity Crowdfunding and Regional Economic Development News From Australia: In the mid-1800’s there were six Stock exchanges, one in eachsix Stock exchanges of Australia’s state capital cities, Melbourne, Sydney, Brisbane, Adelaide, Perth and Hobart in Tasmania. These regional stock exchanges were all serving their local communities and fulfilling their original purpose as an exchange. Not to trade shares, but rather to raise money for local businesses in the most cost-efficient and effective way.

3 The Australian Idea Establish a network of Regional Funding websites across Australia for private companies that need capital and link them with local investors willing to investigate the company’s offering. Regional Funding Hubs nurture entrepreneurship, business building and local job creation without straining the public (tax payer’s) purse.

4 Would This Idea Work In The Cape Fear Region? There are about 160 small technology firms in Brunswick, New Hanover, and Pender counties. There are about 150 small technology companies in Cumberland, Bladen, Columbus, and Sampson counties. Do any of those companies need capital to grow? There are about 10,000 accredited investors in Southern Brunswick County, alone.

5 Accredited Investors in Cape Fear Can Not Fund What They Can Not Find The Cape Fear Regional Capital Exchange would provide over 300 local companies a public platform to be found by local investors. The new rules on private placements allow companies to market and promote their offerings.

6 News From the Georgia Experiment In Crowdfunding KATHLEEN FOODY, The Telegraph, Associated Press, September 20, 2014. Nearly three years after Georgia began allowing individual residents to invest in small businesses, only 35 companies have registered with the state to try it. Georgia's Secretary of State's office created the rule — known as the Invest Georgia Exemption — in December 2011. Without it, companies can only raise money from individual investors who are "accredited," with $1 million net worth or at least $200,000 income for at least two years according to federal rules.

7 The Problem in Georgia: Investors Can Not Fund What They Can Not Find Vincent Russo, the Secretary of State's general counsel when the crowdfunding exemption was created, said plenty of small companies could use it but have to find the crowd. "It has taken longer than I would have liked, or than anybody would have liked," Russo said.

8 The Same Problem Would Have Limited The Success of the Failed North Carolina Crowdfunding Effort Small private companies in the Cape Fear need a marketing platform to showcase their company and their offerings. Investors need full transparency to investigate companies. The capital market infrastructure needs to be improved in the Cape Fear.

9 Segment Two and Three: Special Guest Jim Verdonik, Securities Attorney with Ward and Smith Discusses The Issue Of Fraud. Untrue Statement vs omission: What is the difference? Do you have to intentionally tell an untruth or omit a fact? What if you just make a mistake? How do you verify you're not making a mistake?

10 How Does A CEO Avoid Making A Misrepresentation in A Private Placement What is a material fact? Can your opinion be a material fact? What if you tell investors everything, but they don't understand it?

11 Realizing The Economic Promise of the Military Technology Cluster in Fayetteville 8 Years Later. Looking back at the February 2006 economic report by Renee Elder, The North Carolina Center For Public Policy Research. The Military’s Broad Impact On Eastern North Carolina.

12 Scope of the Report The Center examined 12 areas of impact: economic impact; defense contracts; impact on ports; impact on sales taxes and property taxes; impact on taxpayer-financed services and on growth and housing; impact on the public schools; impact of military spouses and retirees on the local work force; rates of crime, domestic violence, and child abuse; race relations and the military; presence of drinking establishments, pawn shops, and tattoo parlors; environmental impact; and air space restrictions.

13 Economic Impact State Economic Impact: A study by economists at East Carolina University completed in 2004 estimates that the military generates $18.1 billion in economic impact each year, some $13 billion of which stays in Eastern North Carolina. Bragg Army Base and Pope Air Force Base, both in Cumberland County, generate $4.7 billion in economic activity for North Carolina each year.

14 North Carolina Not Capitalizing on the Economic Potential North Carolina ranks fourth among states in military presence but 23 rd in the amount of defense contracts the state receives. Of more than $200 billion in Department of Defense procurement in 2004, less than 1 percent came to North Carolina.

15 Local Spending Important For Technology Innovation North Carolina did not win the majority of the contracts for local base work. Of the $2.4 billion in contracts awarded by the state's military bases, only $460 million went to North Carolina firms.

16 Military Business Center’s Important Role A report from the Military Business Center shows a 50 percent increase in military contracts awarded to businesses in the state between 2001 and 2004, but during the same period the amount of contracts awarded nationally rose by 68 percent to $230 billion.

17 Short Term Strategy Wrong Approach The Angelou Economics, the consulting firm, recommends a stronger marketing effort by the N.C. Department of Commerce to drum up more military business. This effort would include enhancing information resources for those who would do business with the military, identifying defense as a target industry for recruitment, creating an enterprise team that recruits defense-related and tailoring incentives specifically to attract new defense companies.

18 Better Idea Is To Focus on Technology Innovation in the Military Technology Cluster Identify the small technology firms in the entire Cape Fear Valley that could benefit from technology commercialization. Allow the creation of the capital market infrastructure to fund company growth.

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